Personal and Organizational Higher Purpose, Corporate Governance and Shareholder Value: Survey Results

31 Pages Posted: 27 Jul 2020 Last revised: 29 Jul 2020

See all articles by Stuart Bunderson

Stuart Bunderson

Washington University in St. Louis

Anjan V. Thakor

Washington University, Saint Louis - John M. Olin School of Business; European Corporate Governance Institute (ECGI)

Date Written: July 24, 2020

Abstract

This paper reports the findings of a recent survey of 1019 individuals to learn about their commitment to and perceived value from personal and organizational higher purpose, and examines the implications of the findings for corporate governance and the stated corporate goal of shareholder value maximization. We found that personal higher purpose promotes personal well-being, including greater happiness and lower stress from COVID-19, and this effect was stronger when the purpose statement was written down. This notwithstanding, while many individuals stated that they have a personal higher purpose, very few had a written statement of purpose. The incidence of written higher purpose statements is higher among organizations than among individuals. Employees of organizations with higher purpose statements were happier and prouder of their organizations. Two of the findings have potentially important implications for corporate governance: (i) The effects we documented were stronger when the purpose statement was written down and tied to society, employees, and customers, rather than shareholders; and (ii) employees trusted their leaders to make better business decisions when they endorsed the social value of the corporate higher purpose.

Keywords: higher purpose, corporate governance, shareholder value, personal well being.

JEL Classification: D1, G3, G4, Z1

Suggested Citation

Bunderson, Stuart and Thakor, Anjan V., Personal and Organizational Higher Purpose, Corporate Governance and Shareholder Value: Survey Results (July 24, 2020). European Corporate Governance Institute – Finance Working Paper No. 692/2020, Available at SSRN: https://ssrn.com/abstract=3659749 or http://dx.doi.org/10.2139/ssrn.3659749

Stuart Bunderson

Washington University in St. Louis

One Brookings Drive
Campus Box 1208
Saint Louis, MO MO 63130-4899
United States

Anjan V. Thakor (Contact Author)

Washington University, Saint Louis - John M. Olin School of Business ( email )

One Brookings Drive
Campus Box 1133
St. Louis, MO 63130-4899
United States

European Corporate Governance Institute (ECGI) ( email )

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Rue Ducale 1 Hertogsstraat
1000 Brussels
Belgium

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