A Higher Priority

Aug 22 2019

“The business of business is business.” For decades, that old saying has been a guiding light for organizations. But this week, some of the country’s top business leaders have declared that shareholder value no longer has a stronghold on corporations’ bottom line.

On Monday, the Business Roundtable, an association of major US-based companies, released a statement that redefines corporation’s purpose. Whereas maximizing profits was once the main objective of American businesses, that purpose should now be centered on delivering value to all constituencies, from customers to the world at large, the group asserts. The statement was signed by 181 of the group’s 188 member CEOs.

Though provocative, it’s not a terribly outrageous notion, experts say. More and more corporations are starting to lead with purpose, understanding that real value creation comes from serving multiple stakeholders. According to Korn Ferry CEO Gary Burnison, the purpose debate has even made its way into the boardroom. “The vast majority of directors are motivated by the desire to make an impact” he says.

But it’s just not enough for the Roundtable to say, publicly, that shareholder value doesn’t define a company’s purpose entirely, says Kevin Cashman, global leader of Korn Ferry’s CEO & Executive Development practice. “Purpose is not just a nice statement,” he says. “It requires developmental transformation to make it happen.”

Read More

See More Posts

Playing the Numbers

Playing the Numbers

By Jonathan Dahl; originally published by Korn Ferry in Briefings Magazine.   If you type the number 2022 into a search engine, you may discover that those who follow meaning in numbers see good things ahead—success among them. Given that we’re toward the end of the...

read more
Whiplash Leadership

Whiplash Leadership

By Russell Pearlman; originally published in Briefings magazine. For most organizations, it began in mid-March 2020.  Not just the pandemic and the slew of business lockdowns, of course, but the round after round of decision making. The first wave of decisions had...

read more