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What we mean by purpose-led governance

It is possible for many different types of organisations to be purpose-led, whether they are companies incorporated under the Companies Acts, or partnerships, mutuals, social enterprises, NGOs or indeed government departments.

The type of governance appropriate for any organisation depends on its size and legal form, its constitution and the legal and regulatory context in which it operates. In some cases, the purpose of the organisation is explicitly set out in its constitution or charter. For most businesses, it is not, and the articulation and ownership of the company purpose will be a matter for the company, and especially the Board, to determine and pursue.

In Blueprint’s view, for any organisation that seeks to be purpose-led there are generally two common features of its governance:

  1. The governing body or Board of Directors sees itself as the collective trustees of the purpose and exercises its oversight and stewardship role to ensure that the purpose is effectively pursued through what the organisation says, what it does, and how it does it.

  2. Respecting the legal accountabilities and formal reporting requirements, the governance framework is one of seeking to create and sustain relationships based on dignity and respect for people, inviting scrutiny and dialogue with all who can contribute and ensuring the voices of those affected by the business are heard and taken account of when major decisions are made. Alongside formal reporting, this includes ensuring appropriate accountability to all the key constituencies and relationships (as the quadrants in the Blueprint Principles set out) on which the successful pursuit of that purpose depends.