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Disney employees protest against Florida's "Don't Say Gay" bill, in Glendale, California in March.RINGO CHIU/Reuters

Wanda Costen is dean of the Smith School of Business at Queen’s University.

As 2022 draws to a close, we can look back on another year of far-reaching existential crises, from climate change to political instability, racial injustice to income inequity. These issues, and others like them, will no doubt dominate the World Economic Forum next month in Davos, Switzerland, where the world’s power brokers will call for collective action.

Historically, the Canadian view has been that these challenges are best solved by the government, but there’s growing expectation that business can, and should, bring to bear both human and financial resources to address the social issues in the communities in which they operate. Earlier this year, Smith School of Business surveyed Canadians about their expectations of business, and the results show that those expectations are extraordinarily high.

Canadians now rank charities and businesses as equally responsible for solving societal problems, and, on average, suggest that 20 per cent of a company’s profits should be dedicated to solutions. For perspective, consider that the charity and non-profit support organization Imagine Canada bestows its Caring Company designation to organizations that donate just 1 per cent of their profits or more.

When it comes to leaders, almost one-third of Canadians now strongly expect chief executive officers to take firm positions on important societal issues and see the CEO’s views as a proxy for the company itself.

This shift is not one for which many CEOs are prepared, and the consequences of miscalculating stakeholder reactions can be catastrophic. When Disney CEO Bob Chapek spoke out against Florida’s “Don’t Say Gay” bill, Governor Ron DeSantis introduced another bill to revoke Disney World’s designation as a special tax district.

Staying silent or neutral on social issues, however, is hardly a safe harbour. Over 40 per cent of Canadians we surveyed told us they would reduce or stop spending on brands or buying from companies that were silent or neutral on matters of great importance to them personally. At the same time, two-thirds of them told us they would reduce or stop spending on a company or brand if it took an opposing position from their own on an issue.

Wait, there’s more. When it comes to corporate activism, Canadians view authenticity as crucial – even more important than the amount of financial and non-financial support a company provides. But the perception of authenticity is often in the eye of the beholder. Today, the degree to which a company or CEO is perceived as authentic is quite precarious, often influenced by the way it responds to the various social issues that arise daily. Canadians cite a long list of behaviours that signal inauthenticity: from lack of action and transparency; to virtue signalling; to the offence of simply making a profit.

So, what should business leaders do? The answer is: Adapt or fail.

To dismiss today’s expectations as a passing fad or sign of some sudden, misguided “woke” culture ignores decades of change. The world has become more interconnected and interdependent. Climate change has become a balance-sheet issue, and a new, socially conscious generation is voicing its contempt for maintaining the status quo.

The calculus that consumers, employees and investors use to make decisions has changed, and social impact has not only entered the equation, but also transformed it. A business that tries to swim against this current, or a leader who is not socially engaged is not in tune with what’s happening in society and will not succeed. Today’s business leaders need to demonstrate courage, and be brave.