Mark Chong - Living the Corporate Purpose

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LIVING THE CORPORATE PURPOSE

Insights from Companies in Asia

Copyright 2021 by World Scientific Publishing Co. Pte. Ltd.

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ISBN 978-981-122-121-7 (hardcover)

ISBN 978-981-122-122-4 (ebook for institutions)

ISBN 978-981-122-123-1 (ebook for individuals)

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Ho Kwon Ping

The Covid-19 pandemic has forced most businesses to critically assess what they need to do to survive and support their employees, customers and communities. I firmly believe that businesses that want to do well in this new world need to have a single-minded focus on organizational purpose.

The most sustainable businesses are driven by a deeper purpose to create value for itself, its stakeholders and society at large. While profit is the fuel that keeps businesses going, it is purpose that provides a destination, a roadmap, and a compass.

When we founded Banyan Tree 25 years ago, we placed sustainability at the core of strategy even before it became a buzzword. Our motto embracing the environment, empowering people reflects a balanced approach that emphasizes the greater good and a work environment that brings out the best in people. This has not changed. While the hospitality industry (along with others) has been hit hard by the crisis, we are adapting to the new realities and building our resilience. Purpose has been our constant guide.

To be a truly purpose-driven company is to put purpose at the heart of every decision you make. It requires concerted investment and commitment, through both good times and hard times. In this crisis, businesses and their leaders have a choice to re-imagine and build something better, to leave a legacy that balances profit with the greater good. Purpose can be their North Star.

Mark Chongs and Flocy Josephs book is a timely one. The books 3As framework provides business leaders with a roadmap on articulating, assimilating and activating their organisational purpose. Discovering and articulating a companys purpose is the first thing a company needs to do. Once that is achieved, it needs to scale purpose from its founding days to beyond and bring it alive for thousands of people, across multiple locations. Finally, it needs to engage other stakeholders to activate its purpose beyond the company so that it achieves broader societal impact.

The book also tells the stories of 13 purpose-driven companies and the different approaches they have taken in articulating, assimilating and activating their purpose. Importantly, these stories address how the companies are responding to Covid-19. At a time when fear and uncertainty complicate efforts in speaking about purpose, these stories show how the companies have brought their people along.

Finally, the book issues a series of practical calls to action that is based on lessons distilled from the journeys of the 13 featured companies.

Anyone working in a business can take something out of the framework, case studies and calls to action contained in this book. Livingthe Corporate Purpose can inspire and guide your companys purpose-driven journey wherever you happen to be on it.

Ho Kwon Ping

Executive Chairman, Banyan Tree Holdings and

Laguna Resorts and Hotels

Executive Chairman, Thai Wah Public Company

Chairman, Board of Trustees, Singapore Management University

The principle of shareholder value maximization has dominated capitalism and corporate boardrooms for 50 years. While it has brought the world significant benefits, it has not been able to convincingly address deeply troubling issues such as climate change and income inequality (Gast et al., 2020). Furthermore, it has often come at the expense of other stakeholders and resulted in popular distrust of big business. Thus, the notion that a firms purpose is just making money attributed to the economist Milton Friedman is increasingly being discredited (Mayer, 2020). In fact, just seven percent of Fortune 500 CEOs believe their companies should mainly focus on making profits and not be distracted by social goals (Murray, 2019).

In August 2019, the Business Roundtable the largest business association in the US redefined the goal of business as one that promotes the interests of all stakeholders, such as those of employees, customers, suppliers, communities and shareholders. The act was seen as the business communitys acknowledgement of its responsibilities towards society i.e. to generate and share wealth more sustainably and evenly. It also reflects a (belated) recognition that a corporations licence to operate is given by its stake-holders (The Editorial Board, 2019).

In December 2019, the World Economic Forum issued a new manifesto spelling out The Universal Purpose of a Company in the Fourth Industrial Revolution (Schwab, 2019). The manifesto makes clear that the traditional focus on shareholder value is neither fair nor right; neither can it meet the challenges of the 21st century (Mayer, 2020; Schwab, 2019). Instead, a business should revolve around its purpose the reason it exists, what it sets out to do and what it aspires to be (Mayer, 2020). It follows that a business practices and policies should emanate from that purpose. More specifically, corporate purpose should be to produce profitable solutions to the problems of people and the planet, and not to profit from producing problems for people or the planet. It is about precise descriptions of what problems companies are solving, for whom, how, when and why they are best suited to do that (Mayer, 2020).

These discussions of corporate purpose are happening at a time when trust in institutions including business is very low. This distrust is fueled by a myriad of factors including a growing sense of inequity, pessimism about economic prospects and lack of confidence in leaders. The 2020 Edelman Trust Barometer shows that while trust is built on a combination of competence and ethics, no institution including business is currently seen by stakeholders as being both competent and ethical. Yet, ethical drivers are three times more important to trust in companies than competence. In addition, 87% of the Edelman survey respondents say that stakeholders, not shareholders, are most important to long-term company success; 73% say that a company can take actions that both increase profits and improve conditions in communities where it operates. The world has also seen the emergence of belief-driven buyers, who will choose, switch, avoid and boycott a brand based on its stand on societal issues (Edelman Trust Barometer 2020).