Economist sees corporate future in purpose before profits

It is critical for the 21st century to redefine declarations of corporate purpose to produce solutions for the problems faced by both people and the planet, a distinguished British economist said.

"The future of corporate [purpose] will be based on the idea that profit should be a product of a corporation's purpose, but not the purpose of the corporation," said Colin Mayer CBE, professor at Peter Moores of Management Studies at the Said Business School at the University of Oxford.

He said the purpose of corporate purpose is an integral part of running a business, as to how a business can grapple with this presents a real opportunity for them to solve global problems.

Expanding on this, he cited the example of Microsoft, whose Indian-born CEO Satya Nadella told him at last week's 50th Davos World Economic Summit that one of Mayer's books inspired him to think differently about the role of businesses in society.

"Microsoft, the second-largest company in the world, announced [on Jan. 16] that it was going to be carbon zero" in its operations, Mayer said.

But Microsoft also decided to go even further, saying it would extend this through its supply chain to make it carbon zero by 2030, he added, lauding this "pretty ambitious target."

This is not only about avoiding problems, but also about how Microsoft technology can provide businesses and people with the know-how to improve their environmental performance.

Innovation up north

In terms of making businesses eco-friendly way, the most innovative firms are in Scandinavian countries, argued Mayer, saying those countries stress a more expansive view of business in society.

"In particular, in Denmark, there are forms of companies which are...