The bosses of 14 big organisations, including Capita, Unilever and PricewaterhouseCoopers (PwC), have pledged to put the wellbeing of staff, local communities and broader society higher on the boardroom agenda, after concluding it will enhance the long-term profitability of their businesses.
The Purposeful Company, a not-for-profit organisation, said it had brought together business leaders from leading FTSE 100 companies and large accountancy firms, whose businesses employ 2 million people and manage £1tn of investment assets, to show that having a purpose beyond a simple profit motive “brings strategic clarity, operational discipline around what’s material to stakeholders and more meaningful work for employees”.
Capita has been accused in recent years of having poor working conditions, Unilever of causing environmental damage and PwC of facilitating tax avoidance, but The Purposeful Company said its latest report showed the current crop of leaders understood that consumers, workers and local communities were increasingly concerned that businesses met high standards of conduct.
Proposals in the report include introducing a “say on purpose”, which would mimic consultations with shareholders on directors’ remuneration and on climate policies, which itThe Purposeful Company said should be based on agreed criteria “by which their performance can be assessed and incentivised”. A medium-term aim should be to create an asset class of purposeful companies, the report added.
Clare Chapman, who became head of the conciliation service Acas last year and is co-chair of the Purposeful Company, said the pandemic had accelerated the need for businesses to have a bedrock of support based on the contribution they bring to society.
“This is a moment to be seized. The more purposeful companies, the greater the chance of success in building a stronger and fairer economy post the pandemic and addressing the climate crisis,” she said.
The report said that having an explicit purpose “orients companies away from sole focus on shareholder value maximisation”, because it compels companies to acknowledge the interests and views of all their stakeholders.
The 14 company bosses include Mohit Joshi, president of Infosys; John Pettigrew, chief executive of National Grid; Sir Simon Stevens, chief executive of NHS England; Alison Rose, chief executive of NatWest; Kevin Ellis, senior partner at PwC; Liv Garfield, chief executive of Severn Trent; and Alan Jope, chief executive of Unilever.
They are joined by Barclays chief executive Jes Staley; Jon Lewis, chief executive of Capita; Hywel Ball, chair of EY; Saker Nusseibeh, chief executive of Federated Hermes; Anne Richards, chief executive of Fidelity International; Susan Bright, managing partner at Hogan Lovells; and David Neal, the chief executive at IFM.
Several not-for-profit groups have emerged to encourage minimum standards of corporate behaviour towards staff, including the US-based B Corporation certification scheme, which focuses on small and medium-sized businesses and includes the Guardian Media Group as a signatory.
Unilever has acquired several firms that have B Corp status, but is not a corporate member itself.
The Purposeful Company’s co-chair Will Hutton, also an Observer columnist, said: “This has been an engrossing and inspiring undertaking. These leaders, from a wide range of companies and organisations, all insist on the primacy of purpose. Capitalism can best secure its future and win public support, the more its leaders are committed to purpose.”
