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Oxford Saïd team creates new framework to govern purpose

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To help boards, senior managers and investors govern purpose, Oxford University’s Saïd Business School has established the Enacting Purpose Initiative.

The Enacting Purpose Initiative is chaired by Rupert Younger, director of the Oxford University Centre for Corporate Reputation, with Professor Colin Mayer and Professor Robert G Eccles as co-chairs.

Together with a group of core partners – including the University of California at Berkeley, strategy consulting firm Brighthouse (a Boston Consulting Group company), investment group Federated Hermes, law firm Wachtell Lipton Rosen & Katz and the British Academy’s Future of the Corporation programme – the Enacting Purpose Initiative engaged with 30 European organisations and institutions to discuss, debate and then publish a first report on how purpose can be most effectively governed. 

Central to this is SCORE, a powerful new framework that helps boards of directors, senior management and investors translate purpose intent into practice.

The framework provides a simple set of five elements that are critical for purpose to be properly governed. The five SCORE elements are set out below, each coming with its own clear governance question.

Simplify: purpose needs to be lucid and easily understood by the entire workforce, supply chains and any other stakeholders. It should establish problems that the company wishes to solve, and lay out coherent plans to tackle them. Any messaging on purpose should be distinctive to the company (try substituting a rival’s name in early drafts if in doubt) and don’t be afraid to call upon brand heritage and company origins if it makes you stand out. 

Governance question: Is our purpose simple enough to be understood and acted upon?

Connect: corporate purpose should go beyond ‘culture’ and permeate everything that a company does, including decision-making, the actions of its employees, plus also connecting with partners and customers. The easiest way to ensure a company’s values resonate externally is to ensure all messaging on purpose is authentic: stakeholders can easily spot virtue-signalling and greenwashing.

Governance question: How does our purpose connect to our mission and to the strategic choices we need to make?

Own: the board doesn’t own purpose; rather it should be owned collectively by everyone within the organisation and agreed with investors. However, the board should be responsible for putting purpose into action: enabling systems and processes that allow company values to flow seamlessly throughout the company. Consensual debate is key here: consider regular meetings, town halls and digital forums. Top-tier executives should attempt to live by its values, and they should inform any tough trade-off decisions.

Governance question: What are we doing to ensure that our purpose is embraced by everyone inside the company and supported by our investors?

Reward: employees are motivated by purpose; it makes them proud to work for a company, and it’s a major talent recruiting tool too. Therefore, boards should consider rewarding and possibly remunerating purposeful staff behaviour. Establish a company-wide performance system, with rewards including financial bonuses, flexible working, and praising inspiring stories. 

Exemplify: promoting a company’s values is tricky. Unfortunately, most storytelling surrounding purpose in business is neither competitive or interesting. For customers and staff, purpose messaging is most compelling when it emotionally resonates with them, perhaps touching upon company failures (as well as successes) or leaders articulating why they’re willing to make personal sacrifices for any missteps. There’s another exception: stories on brand purpose can work well on visual platforms such as Instagram and Snapchat.

Governance question: What stories do we use to show our purpose in action?

For purpose to mean more than words, it has to become an organising principle for organisations and their leadership teams.  Purpose should be a ‘north star’, informing the strategic choices faced by the board and its senior management team. To do this well, purpose needs a powerful and simple governance framework. SCORE offers what boards, senior management and investors need to deliver: profit with purpose, together with the wider responsible behaviours that society demands.