PVH’s Manny Chirico Discusses ‘The CEO
Balancing Act’ at WWD CEO Summit
October 30, 2019
How should CEOs prioritize stakeholder groups while balancing their corporate purpose with driving profits?
This was the theme of PVH Chairman & CEO Manny Chirico’s presentation at the 2019 WWD Apparel & Retail CEO Summit. Kicking off the 23rd annual conference of industry leaders, Manny led a timely conversation about the dilemmas CEOs are facing, including when to publicly take a stand on issues and how to serve all stakeholder groups – shareholders, customers, associates, suppliers and communities.
Given today’s global macro-economic backdrop, Chirico said that society is increasingly looking to companies to address social and economic issues, leading to increased conversations about what the purpose of a corporation should be.
How did we get here? Chirico pointed to a polarized public, a focus on short-term financial performance and the failure of government to provide solutions.
“Without a clear-cut roadmap or guidelines, what is the path forward for CEOs?” Chirico asked. “It’s important for CEOs and Boards to choose a path or it will be chosen for us.”
One path is Elizabeth Warren’s proposed Accountable Capitalism Act, which advocates that stakeholder groups have to be considered in all business decisions. This approach would legally mandate the purpose of a corporation and move away from the Shareholder primacy model that is legally in place today. A CEO’s fiduciary duty and compensation are still tied directly to shareholders, stock price and quarterly earnings, and for this model to work, that needs to change, he said.
According to Chirico, CEOs and brands need to land somewhere in the middle - taking all stakeholder groups into account while maintaining a focus on long-term shareholder value.
“I’m motivated to be financially successful because I want to deliver for my shareholders while also doing the right thing and doing good.”
His advice to the audience:
Embrace the new balancing act.
“I agree that leaders and companies should be judged by more than just the bottom line. It’s important to remember, however, if you’re not delivering long-term shareholder value, you will not be able to invest and do good for any of your other important stakeholders.”
Define your unique corporate purpose.
Use your unique corporate purpose as your compass to maintain your authenticity in an increasingly polarized world.
Capture the hearts of your consumers.
Consumers want to buy brands that support and align with their personal values. Connect with your consumers by being true to your corporate purpose.
A sustainable & responsible future for all.
Recognize your role in supporting a sustainable and responsible future for all of your stakeholders and understand that your business has a direct impact on the environment and society at large.
“Just like we have clear financial targets, this year PVH formalized our Forward Fashion CR Strategy to set a new level of ambition and transparency for sustainable business. We have three focus areas that aim to reduce our negative impacts to zero, increase positive impacts to 100% and improve over one million lives throughout our value chain.”
Invest in and foster an inclusive workforce.
Invest in your workforce and create an environment where every individual is valued.
“Collectively, this is how we at PVH are fulfilling our corporate purpose to power brands that drive fashion forward – for good,” Chirico concluded.