The notion that companies should have a corporate purpose or mission that goes beyond financial performance has been hovering around the fields of management, organizational behavior and the economics of organizations for a long time. As Larry Fink, CEO of BlackRock, wrote in January 2019: “To prosper every company must not only deliver financial performance, but also show how it makes a positive contribution to society.” On August 22, 2019, the US Business Roundtable presented a statement on the need to focus corporate governance around multi-stakeholder perspective and the importance of corporate purpose in this process. This document was signed by 182 CEOs of large US companies. Capital markets regulators in different countries are considering the introduction of mandatory statements of purpose, as in France and the UK.
This level of concern and inquiry by business leaders is healthy. The traditional notion of companies as profit-maximization institutions is narrow and does not relate well with the needs of the 21st century society. Organizational purpose, why a company exists and how a company contributes to society, is, or can be, central to its identity and its reason for some strategic decisions. But, what do we really know about organizational purpose and how and when does purpose matter for an organization’s prosperity? What defines a good corporate purpose and how investors and board directors should distinguish one that makes sense from another that doesn’t? What drivers translate purpose into firm’s strategy and firm’s corporate culture? What is its relationship with business performance? If purpose matters, how does one infuse corporations with a greater purpose? What roles do the CEO, the board of directors, and shareholders have in designing, strengthening, and reinforcing, if needed, organizational purpose?
The IESE Center for Corporate Governance and ECGI are partnering to bring together leading scholars from the fields of strategy, organizational theory, organizational economics, finance and corporate law to address these important questions with thoughtful business executives, corporate lawyers, asset managers and board directors from a variety of sectors.
This event is fully sponsored by the IESE Center for Corporate Governance. Particpants will be from a variety of backgrounds including academics, board directors, asset managers, and additional business practitioners.
IESE Business School is inviting participants from SMS to attend the event. Registration is required in order to reserve your attendance.