Investors now expect firms to have a purpose that meets the needs of all stakeholders and delivers returns. It is a difficult equation to balance.
Over the past few years, we have seen considerable changes in behaviour from a large portion of the providers of capital. An increase in responsible investing coupled with more forceful stewardship practices has resulted in companies and boards adapting to a reimagined idea of business purpose that looks further than economic returns for shareholders, but on a societal commitment to a range of additional stakeholders.
In fact, in 2019, the Business Roundtable, which is made up of CEOs from approximately 200 major US companies, issued a statement redefining the purpose of a corporation. It moved away from the notion of a company’s purpose
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