Colin Mayer is a professor at Oxford’s Said Business School and a financial economist by training, which is the part of the discipline most committed to the view he now argues against. He dates his own change of mind to the financial crisis and to the conclusion that the system could not be patched.
His definition of corporate purpose is a single sentence with a condition attached, and the condition is what distinguishes it from a mission statement.
Key findings
- Mayer’s history of the corporation starts under Roman law, with a legal form created to perform a public function. On his reading, the pursuit of profit alone is the recent development rather than the original one.
- He is dismissive of the philanthropic model that preceded the current one, and unusually blunt about the pattern it repeats.
- The argument that purpose is a luxury in a crisis is one he has heard before, in the financial crisis, and he inverts it. Purpose is precisely the thing that tells a company what to do when conditions change.
- The mechanism he describes is not consolation but opportunity. A crisis manufactures problems, and an organization that exists to solve problems profitably has just been handed more of them.
Not every brand needs its own purpose
The question put to Mayer, from an Oxford colleague, is whether every brand in a portfolio needs its own social position. His answer is that purpose is defined once, at the corporate level, and endorsed by the board.
What follows is translation rather than replication. Each part of the business works out what the corporate purpose means for it, so that it owns a share of the delivery rather than inventing a parallel purpose.
The consequence for marketing is a relief. A brand must live by the corporate purpose. It does not have to demonstrate it on the packaging.
Andrew Stephen gives the concrete version, using the questioner’s own example. A carton of orange juice does not owe anyone a moral lesson. If it improves a morning, that is the customer-facing part, and the sourcing and supply chain behind it are where the rest of the purpose is delivered.
The evidence that it shows up in the numbers
Stephen reports work at Oxford using roughly fifteen years of brand valuation data. Responsibility and purpose have been measured within it for about five or six years, split into social and environmental dimensions.
The finding is about relative weight rather than absolute score. Those drivers have moved from contributing almost nothing to brand value to competing with differentiation, and the effect reaches the stock market.
Mayer adds the corporate-level counterpart and identifies the route that gets least attention. Companies with an authentic purpose perform better and prove more resilient, and one of the largest channels is what their own employees think.
Family firms, and the stakeholders they had not counted
Mayer’s illustration that stakeholder commitment is not general comes from research on family-owned businesses. They are trusted more than other firms and are better places to work.
The same firms score badly on wider social and environmental measures, which is why he treats the idea of a general embrace of stakeholders as unsupported.
What he thinks marketing can supply is the missing map: whose interests actually bear on the firm, beyond the people it can already see.
The trade-offs the crisis forced
Mayer lists the choices that stopped being rhetorical, and each pair sets one legitimate claim against another.
This is his objection to how the American declaration was understood. It rested on the assumption that looking after everyone is always also best for shareholders, and the crisis produced cases where somebody has to lose.
The detail that gives the whole thing away
Mayer’s most quotable observation is a piece of procedure. Almost none of the chief executives who signed the declaration asked their own boards to approve it.
His explanation is not cynicism. Each signatory believed the statement described what their company already did, so nothing appeared to require a decision.
Stephen offers the more forgiving reading alongside it. There is an unavoidable lag between an intention and any action that bears fruit, and a transformation is not a switch.
Measurement is what would make it real
Mayer’s answer to what would give the declaration substance is not a stronger statement. It is counting what companies actually deliver, next to the financial performance that is already counted.
He points to the accounting standards body then announcing a sustainability standards board, and treats mandatory reporting as the thing that forces implementation.
Stephen’s contribution from the marketing side is that measurement culture is one of the discipline’s genuine assets, with a caveat about what is measured.
Ownership, and where governance failed
Mayer’s structural point is that the dispersed-shareholder company familiar in Britain and the United States is not the world’s normal form. Most countries have block holders who keep large stakes for long periods.
That stability is hard to manufacture where it does not exist, and its absence is why the governance question falls back on the institutions holding shares for everyone else.
His formulation of what ownership means here is worth keeping. It is not only the internal ownership of the purpose by each unit. It is the owners themselves supporting it.
The goals are useful, but start with what you can actually solve
Asked whether companies should anchor their purpose to the United Nations goals, Mayer accepts them as a global frame and then redirects the question inward.
The test he prefers is a question about position rather than ambition, and he notes that it is how people already relate to one another outside work.
He grounds it in his own record as a founder. What has produced success, in each case, is finding something unsolved that he could contribute to distinctively.
Two answers to what a leader should hold onto
Mayer’s is trustworthiness, and he frames it as an asset rather than a virtue: the extent to which everyone dealing with the company believes it will do what it says.
Stephen’s is a phrase he keeps written above his desk, and his reason for needing it is specific to his own field. In technology work the tools are exciting enough that the person the problem belongs to quietly leaves the room.
Scope and limitations
This is a conversation recorded in November 2020, not a paper. The brand valuation findings are summarised by one of its authors rather than presented, and the account of what the declaration’s signatories believed is Mayer’s characterisation of them.
Source
This page summarises HGS #14 Colin Mayer talks about the role of the CMO in defining and delivering purpose, by Marc de Swaan Arons, Andrew Stephen, 2022-02-14.