In the Caribbean, from boardrooms to executive suites and among staff and stakeholders, there is a widely held belief that a firm's primary purpose is perceived to be generating profit for the owners.
For many, this is also the primary objection for firms to seriously integrate strategies generating sustainable impacts that help to achieve the sustainable development goals (SDGs) and to contribute to sustainable development – other than in a vaguely stated vision, and more recently, corporate purpose statements.
This perspective, deeply ingrained in corporate culture, is seen as the natural order of business operations.
However, a growing number of companies are challenging this notion, striving to redefine their purpose to encompass responsible and sustainable value-generation that benefits all stakeholders, including the natural environment.
This shift towards a broader, more inclusive understanding of corporate purpose is not just a moral imperative but a strategic necessity for long-term success and resilience.
Misconception of maximising profit
The traditional belief that the ultimate goal of a company is to maximise profit is increasingly being scrutinised.
This narrow focus on short-term gains often overlooks the broader impacts of business operations on society and the environment, as well as the actual foundations on which the income of the firm rests – income from customers based on all the value generated for them.
A more enlightened approach recognises that true value-creation for customers extends beyond transactional consumption.
It encompasses a holistic view of the company's impact on the customers and all other relevant stakeholders, as well as the natural environment.
Companies can achieve sustainable profit maximisation by innovating across the entire value chain and focusing on the fundamentals of creating value.
This approach aligns with the insights from a recently published BSI PAS808 executive briefing, which emphasises the importance of redefining organisational purpose to contribute optimally to the long-term well-being of people and the planet.
Rethinking purpose of the firm
The prevailing misconception that the sole purpose of a firm is profit-generation is being challenged by a new paradigm.
Many companies are beginning to articulate a purpose that starts from the role of the firm to generate a positive impact on society and the environment in such a way that it also generates competitive and sustainable financial returns.
However, there remains a gap between the articulated commitments and actual practices. Many firms only have objectives, strategies and targets for financial results.
A review of their board papers, organisational strategies, board and executive behaviour, and published annual reports clearly demonstrates this.
This disconnect highlights the need for a fundamental shift in how companies perceive their roles in society.
The recently published BSI PAS808 executive briefing on Purpose-driven Organisations: World-Views, Principles and
