The key question for leaders tasked with setting corporate strategy is, “What is this company’s ultimate purpose?” Fortunately, the basic approach to answering that question has been clearly articulated by the U.S. Business Roundtable. In August 2019 it issued the “Statement on the Purpose of a Corporation,” signed by 181 CEOs from Apple to Walmart. It says a corporation exists for the benefit of all “stakeholders” including “customers, employees, suppliers, communities and shareholders.” In 2021 the Roundtable re-endorsed its position.
Your Corporate Purpose Changed. Has Your Strategy Kept Up?
With the shift towards stakeholder capitalism, companies have to redefine what success looks like — and how to achieve it.
July 05, 2022
Summary.
Following statements by the U.S. Business Roundtable in 2019 and 2021, the basic purpose of the corporation has been expanded from maximizing value for shareholders to maximizing it for all stakeholders. The implications of this are that performance must now be measured along many more dimensions than before and that leaders have to help employees transition to a stakeholder mindset, broaden participation in strategy-making, and make sure that their strategies really do reflect purpose.
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New!
HBR Learning
Strategy Planning and Execution Course
Accelerate your career with Harvard ManageMentor®. HBR Learning’s online leadership training helps you hone your skills with courses like Strategy Planning and Execution. Earn badges to share on LinkedIn and your resume. Access more than 40 courses trusted by Fortune 500 companies.
How to develop a winning strategy—and put it to work.