Organisational purpose discussions

Organisational purpose has become a critical area of debate and discussion within business and between business and its different stakeholders. Purpose articulates why an organisation exists. In this respect, it differs from mission (what an organisation chooses to do) and values (how an organisation acts). Properly constructed, purpose discussions at the board should be anchored on long term strategies and planning horizons, acting as a directional ‘north star’ for as well as a ‘guide rail’ to help board directors make choices on where to invest corporate resources. Correctly devised and executed, organisations with a clear purpose can use this to better allocate scarce resources, unite different publics, and drive efficiencies and performance over the longer term.

As purpose has become elevated within organisational discourse, so too have questions about how organisations can align all its assets and resources behind its stated purpose, how it confers organisational value, whether pursuit of purpose comes at the expense of financial performance, and how it can be measured. In addition to this lie foundational questions on how organisational purpose should engage with the most important intersectional challenges that affect us all – racial injustice, deepening economic inequality, migration and poverty, and the destruction of the natural environment. This broader frame opens up questions about the role of business in society, capturing what stakeholders now expect organisations to contribute towards or solve.

The Evolving Role of the Company Board

“Creating shareholder value” has been a dominant mantra, almost a religion – for the best part of the last 40 years within UK and US corporate governance practice.  Laid out in detail in a book of the same title by the American economist Alfred Rappaport, this...