Sign up for more with a complimentary subscription to Today’s General Counsel magazine.
Matching Strategy to Corporate Purpose
July 21, 2022
For years, the primary purpose of a corporation was to serve shareholder needs. Although this was the position of the U.S. Business Roundtable, that position changed following the Roundtable’s 2019 “Statement on the Purpose of a Corporation. The statement asserts that a corporation exists for the benefit of all stakeholders including “customers, employees, suppliers, communities and shareholders” and was signed by 181 CEOs from Apple to Walmart. In 2021, the Roundtable re-endorsed this position. There are significant implications for companies transitioning to a stakeholder mindset, such as how strategic planning is conducted and how the corporation can meet its responsibility to follow through. Organizational leadership has already had to define mission and vision statements. Now they are being asked to define their corporate purpose. You will need to educate your staff about your stakeholders’ needs, broaden your corporate strategic planning process to include key stakeholders, and execute your corporate purpose using a detailed strategy. As maximizing value for shareholders has been expanded to maximizing value for all stakeholders, performance will now be measured along many more dimensions.
Share this post: