In recent decades, the primary focus for most CEOs has been on maximizing profitability or "shareholder value."
This singular focus has caused CEOs to lose sight of their employees, customers and the communities they serve. And societal attitudes are souring toward CEOs. They are often no longer perceived as leaders who care about their people or guide their companies.
Instead, CEOs are often seen as managers whose loyalty lies solely with shareholders and their own financial interests.
Will the common practice of shareholder supremacy continue to work in today's market? I'd argue—not for long.
Companies that prioritize short-term financial gains at the expense of long-term employee satisfaction and public trust are finding it harder to sustain growth and remain competitive. CEOs must now consider the long-term impact of their decisions on their organization's reputation, society and consumers.
A shift is underway toward a more holistic business philosophy, where success is measured not just by financial performance but also by how well a company serves its stakeholders. Sustainable business leaders who embrace this new model of leadership, called stakeholder capitalism, are better positioned to navigate the complexities of the modern business landscape.
Sustainable leadership: A holistic approach
A sustainable leader mentality requires a shift from profit-first thinking to a more balanced, people-centered approach. Sustainable leadership focuses on empowering employees, fostering collaboration, and ensuring that business operations align with social and sustainable development goals.
This approach recognizes that employee well-being and engagement are essential drivers of long-term success. Engaged employees are more committed, innovative, and productive, which strengthens overall business performance.
Sustainable leadership encourages CEOs to take a long-term view by investing in their workforce, promoting sustainable leadership principles, and building a work culture where employees feel valued and respected. A sustainable leader who adopts this model focuses on building trust and aligning business strategy with broader societal values.
Key characteristics of sustainable leadership
- Empowerment and Trust – Leaders who empower employees and trust them to make decisions that align with sustainability goals foster innovation and adaptability.
- Ethical Decision-Making – Leaders who consider the corporate social responsibility and environmental impact of their decisions build stronger brands and deeper customer loyalty.
- Long-Term Thinking – A sustainable leader focuses on sustainable growth rather than short-term gains, balancing profitability with societal value.
The sustainable company
The liberated company approach emphasizes giving employees autonomy and responsibility (treating them like adults). Leaders trust employees to make decisions that align with organizational goals, fostering creativity, problem-solving and long-term innovation.
This model challenges traditional top-down management, encouraging employees to take ownership of their work and contribute to a positive change in company culture. However, the rise of return-to-office (RTO) mandates contradicts this approach by signaling a lack of trust in employees' ability to work independently.
Companies that resist rigid work structures and enact a sustainability mindset by empowering employees to manage their own work environments are more likely to sustain engagement, innovation, and long-term success.
7 Sustainable solutions for any company
If you're interested in working for (or leading) an organization that doesn't just putter along doing the same old thing, here are some practices to consider.
1. Invest in human resources
Sustainable leadership in an organization begins at the top. CEOs who invest in human resources understand the value of creating a positive work environment and ensuring employee well-being. When employees feel valued and supported, they are more engaged, productive, and committed to the company’s success.
2. Take a competitive attitude toward compensation and benefits
Offering competitive wages and benefits helps attract and retain top talent. Companies like Costco® have demonstrated that paying employees fairly and offering benefits such as health insurance and parental leave leads to a sustainable mindset, higher productivity and reduced turnover.
Costco’s sustainable business leaders have shown that when companies invest in their employees, they foster greater employee loyalty and stronger organizational performance. Competitive compensation also signals to employees that they are valued, which increases motivation and reduces turnover.
3. Spend more time on employee development and training
Providing opportunities for career advancement and continuous learning helps employees feel valued and more invested in the company's success. Developing leadership pipelines internally also ensures that the organization is prepared for future challenges. It is also important to have advancement opportunities for individual contributors not interested in top management roles.
For more on that, check out 9 Reasons You Can’t Ignore the Importance of Training and Development in the Workplace.
Companies that invest in training and development programs create a more adaptable and resilient workforce of decision makers. For example, companies like Google® and Amazon® have implemented internal upskilling programs that allow employees to advance within the company while keeping up with industry changes.
4. Promote a climate change culture
A culture where employees feel empowered to suggest a climate change and take initiative fosters innovation. CEOs who encourage open communication and value employee input create environments where creativity thrives. Employees who feel that their contributions are valued and implement sustainability strategies are more likely to take ownership of their work and contribute to the company's long-term success.
5. Engage your employees and hire managers with leadership skills
Employee involvement is a critical component of long-term organizational viability. Engaged employees are more committed to their work, which often translates to improved productivity and better resource management.
This often comes down to the leadership abilities of your middle managers. If you hire autocratic leaders who set targets, tell those targets to employees and then spend most of their time micromanaging, you are not going to have an engaged workforce. Look instead for people who can connect with their teams, who encourage individual ideas and who are more interested in seeing each employee thrive than they are interested in receiving praise from upper management.
Sustainable business leaders that foster high levels of employee engagement see stronger customer relationships, higher employee retention rates and greater financial stability. Employee engagement is not just about compensation, it’s about creating a work environment where employees feel respected, supported and aligned with the company’s values.
6. Change your priorities to the triple bottom line
The concept of the triple bottom line redefines how business success is measured. A balanced scorecard is another approach to redefining organization and CEO success. Traditionally, success was measured solely in terms of profit.
The triple bottom line framework argues that companies should be evaluated on three key dimensions:
- People – How does the company treat its employees and the communities it serves? Fair wages, benefits and workplace conditions are at the core of this metric.
- Planet – What are the company’s environmental issues? Are they working toward reducing waste, improving energy efficiency and supporting sustainability practices?
- Profit – Is the company financially successful while balancing social and environmental system responsibilities?
There are many creative ways to pursue this. For example, Costco recently announced a pioneering project featuring a mixed-use development that combines a Costco warehouse with apartment units above it.1 This initiative addresses the housing crisis by providing affordable housing options and is expected to create thousands of jobs, showcasing Costco's innovative approach to community development.
Companies that align their business models with the triple bottom line framework are better positioned to manage risks and seize opportunities in an increasingly complex global economy.
7. Take a stand every now and then
If your company is only looking to the bottom-line of profit, it will get battered back and forth by the tides of political and economic change, and every change in public sentiment. The recent sweeping changes in initiatives companies used to support and now are revoking are a good example of this.
Today's consumer is increasingly cognizant of companies' decisions. And an individual's values can be a big factor in where they shop. Companies that demonstrate a total lack of commitment to anything other than the profits of the moment will wind up losing chunks of consumers with every turn of the tide. Many of those consumers will remember and shop elsewhere, even when the company changes its tune again.
Many companies want to create sustainable practices that last longer than a year or two. The infrastructure, training and effort involved in any initiative makes flip-flopping both expensive and ineffective.
Impacts of a poor leadership style: Mass layoffs
Shareholder supremacy is bad for people, but ultimately, it's also bad for business.
“Using someone’s livelihood to balance the books is so normal in America today… it is damaging to people and business,” writes leadership expert Simon Sinek.2 He explains how mass layoffs kill organizational morale, motivation, loyalty and trust.
It demonstrates to the remaining employees that the company does not care about you, your skill set, or contributions. So, why would you give them anything beyond what you absolutely must in your work? The damage this does to motivation is incalculable.
Sustainable CEO leadership can change the workforce
The future of leadership lies in sustainable business practices that create value for all stakeholders, not just shareholders. Companies that succeed will be those that balance profitability with employee well-being, environmental responsibility and social impact.
Simon Sinek states, "Leadership is not about being in charge; leadership is about taking care of those in your charge."2 The CEOs who succeed in this new era will be those who lead with vision, empathy, and a commitment to long-term growth for their companies, their employees, and society as a whole.
As you can see, leadership might make all the difference in which companies are still thriving ten years from now, and which companies society decides to do without.
What kind of leader are you? What kind of choices would you make if you held the reins of a company? Check out Leadership Styles vs. Leadership Theories: Definitions, Comparisons and Examples to see which describes you best.
Spotify is a registered trademark of Spotify USA Inc.
Apple is a registered trademark of Apple Inc.
Google is a registered trademark of Google Inc.
Costco is a registered trademark of Costco Wholesale Corporation.
1Thrive Living Announces Nation’s First Mixed-Use with Costco Below Breaks Ground in Los Angeles, September 26, 2024, https://yieldpro.com/2024/09/thrive-living/
2The Damaging Impact of Mass Layoffs, Simon Simek, (April 25, 2023) https://www.youtube.com/watch?v=QqbvNrrQ6ho
