Purpose matters for Australians, report reveals
The Enacting Purpose in Australia Report highlights an increasing number of Australians expect businesses to lead on social and environmental issues.
The report was released by Melbourne Business School in partnership with the Enacting Purpose Initiative (EPI) and examines how purpose is utilised by Australian businesses.
The Enacting Purpose in Australia report was unveiled at an event at Melbourne Business School last night. The senior executive panel discussion, chaired by the Dean, Professor Jenny George, included:
- Leah Weckert, CEO of Coles Group
- Caroline Cox, Chief Legal, Governance and External Affairs Officer, BHP
- Paul Conroy, CEO of the Ian Potter Foundation
- Will Hetherton, Chief Corporate Affairs Officer, Future Fund
The report, written by Will Harvey, Alex Roberts and Dirk Visser, explores the strategic opportunities for business executives to shape organisational purpose for sustainable value creation, delivering long-term shareholder value and enabling sustainability transitions.
Will Harvey, Professor of Leadership at Melbourne Business School and International Research Fellow at the Oxford University Centre for Corporate Reputation said there had been an increase in demand for organisational purpose over recent years in response to ethical failures of businesses and the perceived negative impacts on communities and the environment.
“An explicit commitment to and enactment of organisational purpose can counter the negative views towards business and build legitimacy and reputation among external stakeholders,” Professor Harvey said.
“Most people still trust Australian business to help solve social and societal issues, which has increased since 2013.”
He said a clear organisational purpose can help leaders to guide strategic decisions, risk management and operations, with climate change, nature and community considerations being several levers that leaders can draw on to inform and sustain their business strategies.
"Australian data from the Edelman Trust Institute show 80% of Australians expect businesses to change aspects of their operations which negatively impact the environment,” Professor Harvey said.
Australians believed business had the potential to be a positive driving force with 83% of the public believing that business could have a positive impact on key economic, environmental and social issues.
“This is an opportunity as most Australians feel business has not gone far enough in addressing climate change, with this sentiment increasing between 2022 and 2025.”
Professor Harvey said Australian businesses were uniquely placed to use purpose for greater business and societal impact due to the long lineage of top ASX companies such as Westpac, BHP and Coles, and their long-standing relationships with different stakeholders, from employees to customers and investors.
The report showed the history of Australia’s most valuable companies was much longer than the most valuable US companies, suggesting that Australian stakeholders may take a longer-term approach than their American counterparts.
“But all stakeholders do not suffer fools gladly, so a superficial response or inaction is likely to be highly costly for businesses through media and regulatory challenge and be detrimental for Australians and society in the long term,” he said.
Find out how leading Australian businesses are using organisational purpose to shape business strategy in the full report available for download here.
Will Harvey is a Professor of Leadership at Melbourne Business School. He is an International Research Fellow at the Oxford University Centre for Corporate Reputation.
