At Contexis we love Salt magazine, and this article by Steve Fuller, summarising a new report linking corporate purpose with commercial performance, is a recent favourite.
To read the whole article click here, or there is a short summary below.
The taskforce behind the research, brought together by the Big Innovation Centre, includes FTSE CEOs, investment houses, leading business schools and consultancy firms, supported by the Bank of England. It is unequivocal about the link between purpose and economic success, concluding that if purpose is put at the heart of British business, it could increase the value of British firms to the tune of £130 billion a year..
[pullquote]the key to corporate greatness is ‘the pursuit of a clearly defined visionary corporate purpose, which sets out how the company will better peoples’ lives’.[/pullquote]
Our current British business ecosystem works against the creation of purposeful companies. Systemic barriers include fragmented, diversified shareholder base, and a legal and regulatory system that promotes short-term profit maximisation. Another blocker identified by the report is the persistent undervaluing of ‘intangibles’. It’s in the nature of purposeful companies to invest in know-how, R&D and skills, yet these assets are consistently and systematically underestimated by financial markets.
It is hoped that the report will act as a stepping stone to change, and that a new, progressive culture of business is possible. The task force is currently gathering feedback on 20 different policy options – ranging from changes to corporate law and governance, to shareholder engagement and taxation – and the results will inform their Final Report, scheduled to be released in autumn 2016.
Fingers crossed that with big players like the Bank of England and London Business School backing purposeful business visionary corporate purpose has well and truly entered the mainstream.