Expectations are growing that businesses serve society by adopting a social purpose and developing strategies to enhance stakeholder – beyond shareholder – value creation. However, there is a dearth of guidance on the role of corporate boards in governing this transition from profit purpose to social purpose and from shareholder value creation to stakeholder (including shareholder) value creation.
This “Purpose and Stakeholder Governance Playbook “addresses this governance gap. “Purpose and Stakeholder Governance Playbook” offers a set of guidelines that directors, boards and governance professionals can use to equip their boards to have effective governance of the company’s purpose – its reason to exist – and the stakeholder relationships the company needs to be successful.
“Purpose and Stakeholder Governance Playbook” is based on a comprehensive literature review conducted by the author in 2022-2023. It was further informed by a review of purpose and stakeholder governance practices at four organizations and input from their governance leaders.
Directors, boards and governance professionals are encouraged to use “Purpose and Stakeholder Governance Playbook” to develop a Purpose and Stakeholder Governance Roadmap to improve your board’s oversight of these important and fundamental governance practices.
“Purpose and Stakeholder Governance Playbook” is organized in four sections:
Create Your Purpose Governance Roadmap
- Strategy and Culture
- Performance Management
- Monitoring and Reporting
- Governance Protocols
Create Your Stakeholder Governance Roadmap
- Purpose and Strategy
- Stakeholder Engagement
- Culture and Decisions
- Governance Protocols
- Monitoring and Reporting
- Board Education
Embed Purpose and Stakeholder Oversight in Committee Mandates
- Governance Committee
- Risk Committee
- Audit Committee
- People Committee
Learn About Board Approaches to Purpose and Stakeholder Governance
- BC Lottery Corporation, Canada
- Maple Leaf Foods Inc., Canada
- Rio Tinto plc, UK
- Unilever plc, UK
Future boards will be expected to have good practices in purpose and stakeholder governance, driven by investors, regulators, and other stakeholders. Fiduciary responsibility is now being redefined to include board oversight of organizational purpose and stakeholder value creation. Boards that update their governance models to include purpose and stakeholder oversight will increase the future-fitness of their organization and enhance its long-term success.
Boards and their advisors now have a comprehensive set of guidelines they can use to enhance the board’s purpose and stakeholder oversight. The practices in this Purpose and Stakeholder Governance Playbook can be used to identify strengths and gaps to create a Purpose and Stakeholder Governance Roadmap to put organizations, their stakeholders, and society on a sustainable course.
