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November 15, 2021

In Camera Session with Isabelle Courville: Articulating corporate purpose

By Prasanthi Vasanthakumar, Institute of Corporate Directors

Today, money isn’t everything and the shareholder alone doesn’t reign supreme. Corporate purpose is taking over the world, but does everyone understand what it means?

In the third video of the ICD’s In Camera Sessions, 2021 ICD Fellow Isabelle Courville joins Rahul Bhardwaj, ICD President and CEO, to discuss the meaning of corporate purpose, its evolving importance, and the key role it plays in strategy.

An engineer and lawyer, Courville is the first female Chair of the Board of Canadian Pacific, and in fact, the first woman to chair the board of a Class 1 railway in North America. As a champion of corporate purpose, Courville uses her extensive governance experience in Canada and overseas to discuss the impact of a clear purpose on corporate strategy, and how it leads to sustainable and successful organizations.

Following Courville’s conversation, a distinguished panel of leaders delves into the idea of corporate purpose, including why it should be evergreen and the board’s role in articulating it.

Here are some highlights from the video.

Isabelle Courville: Purpose is at the heart of the board’s role
Courville opens the conversation by explaining how corporate purpose answers fundamental questions about a company: How is the organization useful to society? What is its mission? How does it differentiate itself from others? And how does it share the wealth it generates?

“A purpose statement is not a slogan or a commercial,” she says. “It’s a recognition that the performance of a company is multi-dimensional.”

These multi-dimensional factors go beyond financial and economic performance to include issues such as customer satisfaction, innovation, human resources, diversity and environmental performance. Using her boards as examples, Courville explains the director’s role in discussing purpose and evaluating company performance against that purpose.

“One of the most important things a chair can do is to structure the board agenda to be able to discuss these types of issues,” she says.

In already packed agendas, directors can often spend most of their time discussing regulation and compliance. But Courville makes a case for exploring purpose as a board, especially when new directors join the board or a new CEO takes the helm.

“The important thing for all boards is to have the tools, whatever they are, to evaluate the whole performance of the company,” she says. “You need to get to that as a board.”

Demystifying corporate purpose
But can corporate purpose become nebulous, asks Marty Cej, Partner at Longview Communications and Public Affairs. In the video’s concluding panel, he is joined by Cathy Benko, Director, Nike Inc., and Tahira Hassan, Director, CPPIB, to further explore the different facets of corporate purpose.

The panel discussion underscores that corporate purpose is a company’s reason to exist. A purpose statement is intended for everyone connected with the brand, from investors and shareholders to employees and community members. It helps organizations determine how to allocate resources, and it informs what they do and don’t do.

“From a boardroom perspective, the first thing you do if you're looking at M&A, or going into a certain business or geography, is asking if it’s consistent with your purpose,” says Benko.
Corporate purpose should also stand the test of time and place. Like Courville, Benko and Hassan believe that corporate purpose doesn’t change, but how it is delivered evolves. Corporate purpose is translatable across geographies, but has to be communicated in a way that is locally relevant, adds Hassan.

Indeed, directors have an important role to play in this communication.

Benko notes that the board, in its governance role, can ensure consistency and continuity in corporate purpose as it cascades through an organization. Hassan concurs, adding that the board’s role is to ensure a mechanism exists to achieve this uniformity.

“The board and management need to get aligned to demystify the corporate purpose in a way that each individual in the company can relate to it, and see how they can add value to it,” says Hassan.

What’s next?
Organizations don’t always get corporate purpose right, but soon, they may not have a choice. Courville notes that France has legislated all companies to create a corporate purpose. Europe, in general, has implemented more legislation with respect to ESG, while in North America, a common language to compare action on this front is missing.

“What’s going on in Europe is very interesting, and it’s coming here for sure,” says Courville.

Does your corporate purpose measure up? For more context and insights, view the full video.
 
Thank you to our sponsors for enabling us to deliver this In Camera Session with Isabelle Courville:
Series Sponsors
  • LEAD: Canadian Pacific, KPMG, Longview
  • PREMIUM: Deloitte, Torys
Session Sponsor
  • Isabelle Courville: Canadian Pacific
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