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Amelia Watts

Purpose for plcs – time for Boards to focus

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Charles Wookey

Download our new paper HERE

Together with a group of Chairs, NEDs and advisors, Blueprint has produced this short paper which aims to move Board’s understanding and ownership of purpose beyond the framing of the FRC Guidance. We argue that plc Boards must step up now to meet the challenge of societal expectations in the post covid recovery and to do this they need to commit seriously to becoming “purpose-led”

The paper sets out in simple practical terms what this implies in terms of profit, ESG, behaviour and measures, and ends with 6 questions for Boards and Board members individually to ask themselves.

What is the challenge and why is purpose important

The challenge for business is meeting the rising expectations of society in the aftermath of the pandemic. Many people want to see businesses recover but in a way that actively contributes to addressing endemic problems of societal inequality and climate change, bringing not only jobs and income but also a better society.

The best way for businesses to meet this challenge  – and in the process to become better businesses – is by becoming “purpose-led”. This orients a business to focus on the benefit to society that arises from its success – what it does, and how it does it. It is a transition which the FRC corporate governance code already encourages, but which many large companies have still to make in practice. The time to do it is now.

Why the Board

Without board ownership and collective commitment, work on purpose risks being a transient project rather than a fundamental orientation which outlasts the tenure of existing leadership.

A purpose-led company needs a Board that “owns” the purpose, and sees its role as the collective trustees of the purpose, ensuring that it is a constant North Star which guides decision taking and behaviour, and thereby ensures long-term sustainable perfomance.

The Board is there to guide and govern the business. Purpose brings discipline to strategy. And being purpose-led also brings a powerful and consistent way of thinking about the wider challenges and opportunities the business needs to address, not least its social and enviornmental impact.

Who is the document for?

The document is designed to stimulate discussion and reflection by plc Boards. They need to challenge themselves about thet extent to which the company is already purpose-led, and, if not, if this is something they want.

The document briefly explores why Boards should bother with purpose, what it means in practice, what behaviour is implied, and how to assess progress. It ends with 6 questions for Boards to ask themselves.

Our suggestion is that if Boards have an initial conversation using this document as a provocation, they also commit to a follow up in 6 or 12 months to review what progress they have made as a Board.

Click here to download – Purpose for plcs – time for Boards to focus

5 insights about purpose-led employers and how to apply them to your workplace

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Following Blueprint’s ‘Becoming a Purpose-led Employer’ panel on June 11th, we wanted to share five of the themes that emerged during the event.

Chaired by Andrew Hill, Management Editor of the FT, panelists include Kate Glazebrook, CEO and co-founder of Applied, the Behavioural Insights Team’s first tech venture, Maaike de Bie, General Counsel of Royal Mail, and Jason Stockwood, Simply Business Group CEO, previously MD of The discussion focused on how businesses, from start-ups to large established companies, can best address the varying challenges of being a responsible & responsive employer.

This is just the first in our first in our ‘Principles of Purpose’ event series – our next will explore what it means to be honest and fair with customers. If you’re interested in attending future Blueprint events, please sign up to our mailing list.

In case you missed it, here’s Blueprint’s perspective on what it means to be a responsible and responsive employer and why it matters.

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The role of business in promoting inclusive growth

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‘There is strong evidence that the current level of inequality is unsustainable from a political, social and economic perspective. We have changed the inclusive growth narrative, but now action must follow.’

Gabriela Ramos, OECD Chief of Staff and Sherpa to the G20, speaking to the OECD Global Parliamentary Network, London, 5 April 2018

Governments cannot act alone if we are to achieve the aims of the Sustainable Development Goals (Global Goals) and support inclusive growth, businesses must play their part. As employers, investors and product or service providers it is critical for companies to recognise their role in meeting the needs of marginalised groups, reducing inequalities and shaping policy and regulation. In fact, it is in their interests to do so, because a more equal economy will benefit them. A recent report has estimated that achieving the Global Goals would open up more than $12 trillion in business savings and revenue and create 380 million new jobs by 2030. This would deliver financial returns, better-educated employees, and higher consumer purchasing power.

Looking forward how can businesses change their practices to achieve inclusive social outcomes? And what does the purpose-led business of the 21st century look like?

Business leaders associated with Blueprint, including Sir Mike Rake, Chair of Advisory Council; Sue Garrard, Blueprint Trustee and Executive Vice President, Sustainable Business & Communications, Unilever; and Sacha Romanovitch, Chief Executive, Grant Thornton joined the conversation with the OECD and representatives from 70 parliaments. Here we share their perspectives and experiences on what it means to be purpose-led and how businesses can support growth that delivers for society.

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Finance has a purpose, done well it has a huge role to play in society

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Over the last year, the discussion around how financial services, in particular investors, are responsible for the management of companies has grown. Activist investors, once seen as “corporate raiders” intending to radically change a company to increase stock value for short-term gains, are now viewed as possible stewards of increased diversity and better corporate governance. Mainstream investors have turned activist in areas such as weapons manufacture, climate change, excessive pay, diversity, and inappropriate behaviour by senior management.

Speaking to the OECD Global Parliamentary Network, hosted by the UK All Parliamentary Party Group (APPG) on Inclusive Growth at Parliament last month, Dr Hari Mann, Hult Business School and Visiting Fellow at Cass Business School, argued that the purpose of finance in society goes far beyond the role of investors and always has. Finance has a purpose, he said, and done well it has a huge impact and a significant role to play in society.  He highlighted four defining areas where finance impacts inclusive growth.

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What does it mean to be a responsible and responsive employer”?

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Ahead of Blueprint’s ‘Becoming a Purpose-led Employer’ panel event on June 11th, here’s our take on what it means to be a responsible and responsive employer and why it matters. We welcome your views and invite you to share any questions or topics you would like to see discussed at the event. You can download the full paper ‘What does it mean to be a responsible and responsive employer?’ here. 

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How can investors tell if a company is genuinely purpose-led?

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Written by Michael Hilton and Charles Wookey

What questions should I ask to get under the skin about whether a company is serious about purpose?

In March 2018, Blueprint and Quintin Price (former global head of active strategies at BlackRock) convened a group of 10 leading stewardship investors. Together they drafted a short list of questions which they believe will help investors respond to this challenge. You can download the full paper ‘How can investors identify purpose-led companies?’ here.

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How can the financial services industry work with policymakers to support inclusive growth?

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‘At a time when technology is rewriting international financial services, we need to ask how policy is best placed to manage this process and ensure it reduces inequality and creates inclusive growth’

Greg Medcraft, Director of the OECD Directorate for Financial and Enterprise Affairs addressing the OECD Global Parliamentary Network, hosted by the UK All Parliamentary Party Group (APPG) on Inclusive Growth at Parliament, London, 5 April 2018

Inclusive growth requires long-term investment in people, places and industries. Across the world by 2020, $111 trillion will be under management by financial institutions. This places the Financial Services (FS) industry in an amazing position to impact positive social and economic outcomes. It also means it can no longer be just about diversifying risk, FS organisations must also play a role in managing systematic risk.

As is increasingly acknowledged, the rising risks of inequality are one of the critical motivating factors driving FS companies to play a greater part in supporting inclusive growth. Speaking on behalf of the OECD, Greg Medcraft explored three key shifts – trust, digitalisation and globalisation – that are hugely affecting FS businesses and how they might work together with policymakers.

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Inclusive growth: from analysis to action

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Earlier this month we were honoured to be invited to join the All Parliamentary Party Group (APPG) on Inclusive Growth at the OECD Global Parliamentary Network meeting in Parliament which was held to discuss inclusive growth. The organisers invited a number of business leaders associated with Blueprint, including Sir Mike Rake, Chair of Advisory Council; Sue Garrard, Blueprint Trustee and Executive Vice President, Sustainable Business & Communications, Unilever; and Sacha Romanovitch, Chief Executive, Grant Thornton to join the conversation. Over the next few weeks, we will be sharing the perspectives shared by attendees from Parliamentarians, to NGOs and business leaders.

Liam Byrne, UK MP and Co-chair of the APPG Inclusive Growth, set the tone for the discussion in his welcoming address. He explored the very different challenges and opportunities 21st-century economies face including technological transformation, rapidly growing inequality and systemic challenges such as climate change. He underlined that current policy was not created to address this, built as it is on an economic consensus which took slowly hold in the 20 years between Milton Friedman’s Capitalism and Freedom and the election of Ronald Reagan and Margaret Thatcher in ’79/80. In conclusion, he suggested that while we may have mastered how to globalise, we failed to develop good ways of ensuring that globalisation worked for the many, not just the few.

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Impact investing isn’t just about social entrepreneurs

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Written by Michael Hilton

The recent Good Deals & Beyond Good Business conference showcased a range of exciting companies, with purpose at their core.

One was a well-established business which turns tonnes of old leather fire hoses destined for landfill into luxury handbags, giving 50% of its profits to a Fire Fighters’ Charity in the process. Another, at the start of its journey, was seeking new investment to expand its ‘aid through trade’ shoe business, with all products manufactured in Africa and all profits reinvested in the company. Two great businesses, both addressing the Sustainable Development Goals (SDGs) head on.

However, as the debate returned to more familiar concerns over how social investment was failing to find its way to social entrepreneurs such as these, my mind wandered back to a less glamorous pensions sustainability summit I had attended the week before.

A comment made by Lewis Grant from Hermes Investment Management had stuck with me. Companies that are improving, he said, rather than those performing well on ESG criteria but at a steady level, are the place to look to unlock shareholder value.

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