SINGAPORE (July 25): A majority 73% of business leader respondents believe in the strong value of corporate purpose and only a minority of 15% believe that their company’s main purpose is to maximise shareholder value, according to the latest report by Ernst & Young.

The report -- How can purpose reveal a path through disruption? Mapping the journey from rhetoric to reality -- also revealed that purpose means different things to different companies.

Thirty-three percent of respondents cited bringing value to customers when asked to characterise their organisation’s purpose while 15% cited boosting share price and 11% cited bringing value to employees. The other 40% of respondents cited that their organisation’s purpose is to create value for multiple stakeholders or offering an aspirational reason for being.

The survey is based on 1,470 global leaders representing companies across various industries in developed and emerging markets around the world, while the respondents include 500 businesses with annual revenues of at least US$2.5 billion ($3.4 billion).

A majority of 68% of companies that broadly define purpose and integrated it into their organisations said that the purpose gives them the agility to innovate in times of disruption.

The survey also reported that 97% of companies showed a good deal of incremental value from deeply integrating a broader sense of purpose into their DNA.

Companies that have deeply embedded an aspirational and human-centric definition of purpose said that it helps create value, such as customer loyalty (52%), preserve brand value and reputation (51%), attract and retain staff (42%) and ability to develop new and innovative products (40%).

The report identified four steps to help organisations reach their purpose goals:

  • Clearly articulate a purpose that corresponds to stakeholders and is grounded in what an organisation does.
  • Integrate the purpose into strategies and operations, and align decision-making with it.
  • Frequently evaluate the progress and check what needs to be changed.
  • Accelerate by placing the purpose at the centre of the organisation’s culture and ensuring that it is owned by the staff.
Valerie Keller, Global Lead, EY Beacon Institute and EY Global Markets, says, “75% of purposeful companies involved in our survey tell us that the integration of purpose creates value in the short-term, as well as over the long run. They also report that being purposeful gives them greater agility to innovate in the face of disruption and uncertainty.”