Discovering what drives some of Australia’s largest companies, the ASX100 Purpose Matters report, provides insight about the motivations behind companies shaping the country.
The report analysed the purpose statements of Australia’s top 100 Australian Stock Exchange (ASX) companies, a list that includes household names such as JB Hi-Fi, Telstra, Qantas, Woolworths, Harvey Norman and Ampol.
The Griffith University and Brandpie collaboration set out to understand how ASX100 companies with a purpose statement performed relative to those which didn’t.
Griffith Professor Nick Barter said a good purpose statement (its why and its reason for being) was powerful and enduring, and connected what the organisation did with the problems we faced in the world.
“Seventy-two per cent of the companies analysed had a publicly available purpose statement and they statistically outperformed on Environmental, Social and Governance (ESG) metrics,” Professor Barter said.
“This indicates companies with a purpose are taking a wider stakeholder perspective and making a more positive contribution to our society and surroundings.”
Brandpie Strategy Partner and Purpose Practice Lead Ms Joanne Kerr said the study also analysed the purpose statements through different lenses such as statement length, connection to what the world needed, stakeholders and long-term orientation.
“Forty-five per cent of purpose statements don’t connect the core business to problems the world faces and 74 per cent are short-term orientated rather than being long-term oriented or enduring,” Ms Kerr said.
“When considering which stakeholders get a mention, ‘people’ in general was mentioned the most, followed by ‘customers’, then our surroundings and then shareholders.
“Looking at different industries, consumer staples companies such as supermarkets and providers of goods, were prominent in terms of their lack of focus on any stakeholders and this is concerning given how often we all interact with such companies.
Professor Barter said improvements in a company’s purpose statement would enhance clarity in decision making and help CEOs, executives and managers used their company purpose statement to drive their business forward.
“In our view, a succinct purpose statement which connects and is focussed on the long-term will enable an organisation to demonstrate it is about more than narrow self-interest and in so doing it will drive long-term value creation,” he said.
The ASX100 Review of Purpose Statements built on the work of Brandpie research on how purpose powers progress and also the recent book publication by Professors Nick Barter and Chris Fleming, Future Normal: 8 Questions to Create Businesses your Children will be Proud Of.
Ms Joanne Kerr has over 20 years’ experience in marketing, brand and communications in both client and agency environments and is Brandpie strategy partner and purpose practice lead.