Purpose is now a comms must-have, but it’s got to ring true to label
When it comes to publicising purpose, corporate organisations need to tread carefully in order to appear authentic, writes Paul Cheal, managing director of financial and corporate comms agency Honner.
Larry Fink’s annual New Year letter to CEOs received much media attention and emphasised the need for brands to not only generate profit but have a higher social purpose. The note kicked off a debate that has now well and truly hit Australian shores.
According to Fink, the CEO of the world’s largest asset management firm BlackRock: “To prosper over time, every company must not only deliver financial performance, but also show how it makes a positive contribution to society.”
For organisations, and in particular financial organisations, this poses many questions around proactively supporting and advocating for societal issues.
Ken Henry, chair of National Australia Bank, picked up this theme in recent weeks saying that businesses must demonstrate a social purpose that drives the way the firm operates. Organisations, he said, need to demonstrate that they are more than just profit.
Paul, it’s an interesting topic. What is a social purpose in the first place? If a business – particularly a small business – serves its customers well, creates jobs which didn’t exist before, and pays taxes, isn’t that enough? When is it realistic to expect more?
I get why you might want a “why”; ie an organising purpose which guides decisions and motivates employees. But social purpose can also over-reach; brands claiming a purpose of changing the world in some way might be true-to-label (or not) but they can also be grandiose and not credible.
I’ve always thought a good test was how many investors are prepared to sacrifice returns for principles (eg ESG, but social purpose would fit too); the evidence suggests not that big a percentage.
Thanks for the comment Andrew. Agree it is important a brand does not “over-reach”. I think your point on shareholders though is apt. I believe social purpose can deliver (long term) shareholder returns – through increased brand awareness, customer loyalty and staff retention among many other benefits.