Purpose Companies stand for full Responsibility
Purpose-Companies serve their employees and customers. Profits are primarily reinvested and serve the purpose of the company. Responsibility lies with the people and inside the organisation. Purpose-Companies work for purpose maximisation rather than shareholder-value maximisation.
Purpose-Companies commit to the principles of
1st Principle: profits = means to an end, not end in itself
We often see profit-maximisation replacing the mission of companies thus preventing them from achieving their purpose. The Purpose approach: profits serve the mission of the company and are re-invested, Purpose Companies cannot be treated as speculative goods and cannot be sold to the highest bidder
2nd Principle: Ownership = Entrepreneurship
We often see company decisions being influenced or taken by distant investors or other people, who have no active role in the company. This separation of decision-making and execution creates a structural lack of responsibility. The Purpose approach: Decisions are taken within the company. Thus responsibility and accountability remain within the company.
The charitable Purpose Foundation ensures in collaboration with Purpose companies, that the Purpose principles cannot be changed and thus become a binding commitment to customers and employees. This is a promise that Purpose companies stand for purpose maximisation rather than profit maximisation.
How does this work exactly? → www.purpose-economy.org/ownership