Snap Back to Reality for CEOs on Corporate Purpose

Corporate purpose snapped back to reality for several CEOs last week. Adam Neumann of WeWork claimed his company would “elevate the world’s consciousness,” but was forced to step down after WeWork’s valuation dropped at least $30 billions following the exposure of malfeasance in the S-1 filing for their now defunct IPO. eBay’s CEO Devin Wenig stepped down as well, citing differences with his board only a month after assuring them that, together, they would “make a bigger difference around the world.” And after being charged with stock market manipulation, Volkswagen CEO Hans Dieter Pötsch faces prison charges – despite emphasizing during Climate Week that his company is accountable to “future generations to find the right answers.” 

When lofty CEO rhetoric becomes divorced from reality – or when it begins to resemble “yoga babble”, as Scott Galloway described it – it causes confusion, spooks investors, and undermines the very real attempts by business leaders to lift up the broader objectives and responsibilities of business. Purpose-driven leadership needn’t be complicated. It isn’t about making grandiose statements around a higher calling or elevated consciousness. In fact, it’s better if it doesn’t.

The truth is that having a strong sense of corporate purpose is only really meaningful if it’s clearly understandable, rooted in practical business actions, and translates into strong competitive and financial performance.

The public agrees. What we have found through five years of polling Americans on precisely these issues is that a simple, straightforward, plain-speak approach works best. For example, this year, we asked Americans what they would say to the CEOs of the country’s largest companies if they could send one message. We got thousands of responses. Here’s some of what we heard:

●  “Please invest more in your workers and in the common people of this country. They are the backbone of America.” – Male, 38, White, Democrat, Iowa

●   “Put customers first.” – Female, 48, Black, Independent, Wisconsin

●   “Be more aware of your impact on our environment.” – Female, 61, White, Republican, California

●   “Build up the communities you benefited from.” – Female, 49, Black, Democrat, Pennsylvania

●   “Be the leader that you would want to follow.” – Male, 28, Hispanic, Independent, Virginia

This is pretty simple stuff. Leadership on corporate purpose doesn’t require a degree in moral philosophy. It’s about paying workers fairly, protecting customers, looking after the environment, giving back to communities, and ensuring strong and ethical leadership. Put another way, it’s about implementing the kind of framework that the Business Roundtable and leaders like Leo Strine have recently called for; one that creates value for all business stakeholders – workers, customers, communities, the environment, and shareholders.

At JUST Capital, we are building what we believe to be the market’s most trusted, unbiased, and data-driven platform for measuring corporate performance across these new, stakeholder-based dimensions. Later this month, we’ll be releasing our 2019 survey report, sharing the latest polling results and providing a clear roadmap for what business leaders need to do to take concrete action in each area.

And on November 12, we’ll showcase which corporations are actually leading the way in the new stakeholder economy with the release of America’s Most JUST Companies – including the new Forbes JUST 100 list. Stay tuned.