Northeastern experts emphasize transparent communication, stakeholder engagement and social responsibility to rebuild trust in contentious industries.
The killing of UnitedHealthcare CEO Brian Thompson has sparked widespread frustration with the health insurance industry, highlighting the challenges CEOs face balancing public accountability with corporate responsibilities.
Northeastern University experts emphasize the importance of transparent communication, stakeholder engagement and a commitment to social responsibility in navigating such tensions and rebuilding trust.
CEOs in industries such as health care, utilities and finance face daily public scrutiny, says Paula Caligiuri, a distinguished professor of international business and strategy at Northeastern.
“Every time there is tension between stakeholders and a decision needs to be made, the expectation is that there will be criticism from the stakeholders sensing a frustration, because they feel the perception of loss, that they were wronged or treated unfairly,” Caligiuri says. “It becomes exacerbated in situations like health care, of course, because these can be life-or-death situations.”
To navigate these challenges, CEOs must be aware of such frustrations and understand how to communicate transparently, she says.
“When you don’t communicate in a transparent way, people might not assume your positive intent and bad things can happen,” Caligiuri says. “The worst thing to do is be cold to the situation or lack empathy.”
Demonstrating empathy and explaining the context in which corporate decisions are made, she says, can soften some of the backlash. Proactively engaging stakeholders allows employees, for example, to advocate for themselves and customers and clients to provide feedback that must be subsequently addressed by the company.
“Even if they make the best, most thoughtful decisions to maximize [the benefits of] all the different stakeholders, they need to ultimately live with these [decisions], so to some extent, they have to build up resilience,” Caligiuri says.
A lot of CEOs talk to each other about difficult decisions, she says, and some benefit from having peer support groups.
However, CEOs have to understand that not everyone will react to their communication in the same way. That is why, Caligiuri says, a CEO needs to work with a crisis management team and a security team in sensitive situations.
“In some cases, CEOs are given security training,” she says. “They work very closely with their security teams on enhanced protocols.”
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Public frustration often stems from the perception that CEOs symbolize power and decision-making within a corporation, says Curtis Odom, professor of management and organizational development at Northeastern.
“While CEOs are ultimately accountable for their organization’s actions, it’s important to recognize that frustrations may stem from systemic problems such as regulatory complexities or cost structures beyond a CEO’s direct control in insurance-related industries,” he says.
Other executives, boards of directors and policymakers also influence decisions in the industry, Odom says, so blaming a single person can oversimplify the issue.
“That said, CEOs are responsible for shaping the company’s values and actions,” he says. “How they respond to public criticism can either rebuild trust or worsen dissatisfaction.”
Some part of the blame falls on institutional investors, says Ruth Aguilera, a distinguished Darla and Frederick Brodsky trustee professor in global business at Northeastern.
“The Big Three” — BlackRock Inc., State Street Global Advisors, a division of State Street Corp., and the Vanguard Group — own an increasingly large proportion of American public companies.
They have the power to design strategies that are profitable, Aguilera says, but more “societally oriented.”
In the case of UnitedHealthcare Group, institutional investors own over 50% of the company, including 9.23% of common shares owned by Vanguard, 8% owned by BlackRock and 4.95% by State Street Corp.
“Together they can probably strongly influence the board’s decisions,” Aguilera says.
Still, a CEO needs to lead by example, Odom says, demonstrating ethical behavior and prioritizing long-term societal impact over short-term gains. CEOs are critical in embedding social responsibility into companies’ core strategy, he says.
“The CEO must allocate resources to environmental, social and governance efforts and ensure they align with the company’s goals,” Odom says.
The whole leadership team needs to articulate how the company’s operations contribute positively to society and update stakeholders on the challenges and progress in social responsibility.
“A socially responsible CEO balances profitability with a commitment to creating value for all stakeholders,” Odom says.
Demonstrating a renewed commitment to social responsibility through community investment or sustainability efforts, he says, helps shift focus toward positive contributions and rebuilds the company’s reputation over time.
Some companies go further by becoming B-Corporations, Caligiuri says, referring to a commitment to things like social, environmental and legal accountability.
“Many companies are sensitive to wanting to be on the right side of these issues,” she says. “They want to do the right thing for their stakeholders and society as a whole.”
However, some companies and industries resort to greenwashing, or putting out PR campaigns that lack substantive impact, rather than actually making a difference, she says.