In recent years, more companies have articulated a social purpose—a clear reason for being that seeks to create positive societal impact. Yet simply declaring a purpose is not enough. For purpose to meaningfully influence strategy, culture, and long-term performance, it must be actively overseen at the highest level: the board of directors.
A recent review of Canada’s top 60 public companies (the TSX 60) provides a snapshot of how boards are embedding purpose into their governance practices. The study examined public disclosures—including annual reports, ESG reports, and corporate websites—to determine which companies had a social purpose and how boards were formally involved in overseeing it.
Key Findings
Among the 24 TSX 60 companies with a declared social purpose, one-third explicitly assign the board of directors a role in overseeing purpose. All banks with a declared social purpose, along with Canadian Tire, Metro Inc., Pembina Pipeline, TELUS, and WSP, include some form of board oversight in their governance mandates.
The study highlights a spectrum of approaches, reflecting that purpose governance is still an emerging practice and not yet consistently applied across Canadian boards. Some companies have no formal board oversight of purpose at all, while others are beginning to embed it into their governance.
Strong practices:
- Purpose as central: Some boards, such as WSP and TELUS, position purpose at the heart of strategic planning and organizational culture, explicitly linking board responsibilities to achieving and fostering the company’s purpose.
- Purpose as oversight priority: BMO and Scotiabank place purpose oversight at the top of their board mandates, delegating detailed monitoring and reporting to specific committees.
Limited approaches:
- Purpose as consideration: Others treat purpose primarily as a factor in decision-making rather than a core guiding principle, which may limit its influence.
- Purpose tied to ESG or branding: In some cases, purpose is closely associated with ESG initiatives or brand positioning, suggesting the company views it more as an ESG or marketing strategy than a true reason for being.
Four companies—WSP, TELUS, BMO, and Scotiabank—stand out as models for purpose governance. In these cases, purpose is not simply a statement but a formal responsibility for the board, embedded in strategic oversight.
Overall, while the approaches vary, the fact that boards are beginning to update governance practices to formally oversee purpose is a step in the right direction.
