DISCUSSION Nine Propositions: The relationship between purpose and values, and business prosperity

by Yolanda Villafuerte _______16th June 2015

This morning, Mark Goyder spoke at the launch event of the Good Governance Index at the Institute of Directors. Making reference to a previous keynote he gave at the Institute of Directors on the role of business in society, he emphasised the nine common-sense propositions which say most of what needs to be said about the relationship between purpose and values, and the prosperity of business.

The nine propositions have been offered as a logical statement of the importance of purpose and values to business:

1) Business is subordinate to society.(Licence to operate)

2) Every business is different (Uniqueness)

3) Businesses are started by individuals (Entrepreneurs)

4) Motives vary but profit or dividend for entrepreneur /shareholder is rarely dominant (The fallacy of Homo economicus )

5) Sustainable shareholder value creation depends more than ever on inspiring loyalty, creativity and trust in and learning and feedback from all key relationships. (Business is about leadership through relationships) .

6) Companies cannot inspire these responses without generating a clear, pervasive, and enduring sense of the purpose and values of the whole organisation (Purpose and values are the basis of leadership) CONCLUSIONS – the case for the inclusive approach

7)Each business will make its own choices, but a business which fails to include all key relationships in its definition and measurement of success (its success model) misses opportunities incurs undue risk and thereby puts itself at a competitive disadvantage

8) Alongside business skills and strategy, purpose and values are central to the creation of shareholder value.

9) This holds for individual companies and for the business community as a whole whose freedom of action depends on the level of public confidence (Licence to operate)

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