#11 Delivering Purpose and Profit
Businesses are under increasing pressure to seek their profits in a responsible way. The common view is that aiming for positive social outcomes requires financial sacrifice for investors; or, the opposite direction, that the pursuit of profit is always at the cost of social and environmental health.
In this episode, Professor Alex Edmans join us for a fascinating conversation on this worldview, and a different route that leads to increased profits and greater wellbeing for all stakeholders. This slot highlights Professor Alex Edman’s views on questions like:
- Why those at both extremes of the debate about responsible capitalism have more in common than they think?
- How leaders and organisations can find a genuinely sustainable way forward that serves society and investors?
- What do leaders need in order to create the businesses of the future?
Alex Edmans
Alex Edmans is Professor of Finance at London Business School and Academic Director of the Centre for Corporate Governance.
He is Managing Editor of the Review of Finance, Associate Editor of the Journal of Financial Economics, a Research Fellow of the Centre for Economic Policy Research, and a Fellow of the European Corporate Governance Institute. He also serves on the Steering Group of The Purposeful Company, on Royal London Asset Management’s Responsible Investment Advisory Committee, and as an Advisor to Research Affiliates.
Acknowledged for his thought-leadership in corporate governance, responsible business, and behavioral finance, Professor Alex talks and keynotes have entertained and inspired millions around the world and earned him multiple appearances among TED’s illustrious influencers with talks such as “The social responsibility of business” and What to trust in a “post-truth” world – an eloquent and insightful presentation that has reached 1.8 million by itself.
He has been named a Rising Star of Corporate Governance by Yale University, and a Rising Star of Finance by NYU/Fordham/RPI. His work has won multiple prizes including the Moskowitz Prize for Socially Responsible Investing, the FIR-PRI prize for Finance and Sustainability, the Investor Responsibility Research Centre prize, and the WRDS Award for Best Empirical Finance Paper at the WFA.
Professor Alex Edmans is also the author of Grow the Pie: How Great Companies Deliver Both Purpose and Profit, an acclaimed book named to the Financial Times Best Business Books of 2020, and his contribution to the field can be found in numerous honorable publications such as the American Economic Review, Journal of Finance, Journal of Financial Economics, Review of Financial Studies, and Journal of Economic Literature.
Learn more about Alex EdmansIn this Episode
What is a purposeful business? Often people think about purpose as being about altruism, so a purposeful business is an altruistic one. But actually, that's not what that word means - the word purposeful means targeted and focus. A purposeful meeting, is a meeting with an objective. For a company, a purpose is “how is the world a better place with the company being here?” And the answer for this must be focus. (…) it helps to know what do to, but also what not to do.
How do you create a more purpose-driven organization and approach? Everybody should come up with a personal mission statement (…) something that just describes what you want to achieve in life. And, once you've come up with that mission statement, which should be short and focused, then you can think about, well, what are the things that I'm doing, which are not actually helping me on that statement? And what are the other things that I need to be doing more in order to make sure that I am fulfilled this?