Ingalill Holmberg & Pernilla Karlberg Petrelius Center for Advanced Studies in Leadership, Stockholm School of Economics Ingalill.Holmberg@hhs.se, Pernilla.Petrelius@hhs.se Paper to be presented at the 13 th ISLC, CBS, December 2014 Work-in-progress Responsible leadership in global business – Wishful thinking or evolving leadership practices? Introduction For almost a century, Swedish companies and organizations have laid the foundation for the Swedish welfare state. By combining technological innovation with innovation in organization and leadership, Swedish companies have built strong market positions across a range of industries and in a variety of markets. Operating in an international context is an experience that many Swedish companies and organizations acquire at an early stage (Henreksen & Jacobson, 2007). This includes the ability to build and accumulate trust among customers, markets, investors, owners, public opinion, and markets (Engwall & Sahlin, 2007). Similar to other strategic resources, these particular resources need to be renewed continuously and to evolve in step with changes and challenges in the outside world. These resources can also erode quickly if not properly maintained and developed (Nonaka, 1994).) The increasingly intensive debate on ethical and socially responsible business initiatives and the quest for globally responsible leadership (see for instance The Globally Responsible Leadership Initiative) most certainly put these kinds of issues at the top of the leadership agenda. For international business success, trust, through ethically acceptable or even role-modeling behavior, is becoming a vital strategic resource (Morsing & Schultz, 2006). Unlike some other types of firm capital, business models and cutting-edge leadership practices are volatile. Over the past decade, we have seen numerous examples of deteriorating leadership and failing business models, in Sweden and elsewhere. The speed of globalization generates strong and constant pressure for innovation and change at companies. Incentive systems that support risk- taking rather than prudent business practices have become commonplace in all kinds of organizations, no matter their stated purpose or their claimed importance in society. An inability to understand in real time how the outside world perceives oneǯs own organization is still common among private as well as public companies, government authorities, and non-profit organizations. The internal idea of ethical behavior and sustainable business seems to be out of synch with the voice of the media and public opinion (Gilpin 2010, Rindova et al. 2006, Hayward et al. 2004). In a complex world, where organizations are constantly spotlighted in social media, the lack of alignment is becoming increasingly problematic for businesspeople in general and for top management in global organizations in particular. However, the business climate is changing as a result of increased transparency, political demands for sustainable development, and higher expectations regarding top managementǯs readiness and willingness to embrace corporate social responsibility (Power et al. 2009, Boli 2006, Einwiller et al. 2010, Freedman & Stagliano 2010). Thus, contemporary models of leadership and current leadership practices are drawing criticism and are widely accused of being obsolete (Sinclair, 2007, Uhl-Bien et al, 2007). Put differently, the call for responsible and sustainable leadership is growing