Measuring Purpose: An Integrated Framework

9 Pages Posted: 2 Feb 2021

See all articles by Clara Barby

Clara Barby

Impact Management Project

Richard Barker

University of Oxford - Said Business School

Ronald Cohen

Global Steering Group for Impact Investment

Robert G. Eccles

University of Oxford - Said Business School

Christian Heller

Value Balancing Alliance

Colin Mayer

University of Oxford - Said Business School; Centre for Economic Policy Research (CEPR); European Corporate Governance Institute (ECGI)

Bruno Roche

Economics of Mutuality

George Serafeim

Harvard Business School

Judith C. Stroehle

University of St Gallen

Rupert Younger

Centre for Corporate Reputation - Said Business School, University of Oxford

Thaddeus Zochowski

Impact Investing and Sustainability Special Projects

Date Written: January 23, 2021

Abstract

This paper sets out a logical and inclusive approach to measuring purpose. We advocate a three-stage process, the first of which anchors the purpose, mission and vision of the organisation in its governance. The second stage identifies the business metrics that derive from purpose in relation to inputs, outputs, outcomes and impacts. In the final stage, these reporting metrics are converted into monetary values through enterprise cost-based accounting and societal valuation.

This three-step approach provides a coherent reporting framework against which critical decisions can be made. These decisions may be internal – enabling management to allocate scarce resources appropriately – or external, allowing investors and other critical stakeholders to assess the performance of a company against its stated purpose. We conclude by categorising existing measurement initiatives in relation to the three stages.

Keywords: Measurement, Purpose, Metrics, Accounting, Valuation

JEL Classification: G32, M41

Suggested Citation

Barby, Clara and Barker, Richard and Cohen, Ronald and Eccles, Robert G. and Heller, Christian and Mayer, Colin and Roche, Bruno and Serafeim, George and Stroehle, Judith and Younger, Rupert and Zochowski, Thaddeus, Measuring Purpose: An Integrated Framework (January 23, 2021). Available at SSRN: https://ssrn.com/abstract=3771892 or http://dx.doi.org/10.2139/ssrn.3771892

Clara Barby

Impact Management Project ( email )

Richard Barker

University of Oxford - Said Business School ( email )

Park End Street
Oxford, OX1 1HP
Great Britain

Ronald Cohen

Global Steering Group for Impact Investment ( email )

Robert G. Eccles

University of Oxford - Said Business School ( email )

Park End Street
Oxford, OX1 1HP
Great Britain

Christian Heller

Value Balancing Alliance ( email )

Colin Mayer (Contact Author)

University of Oxford - Said Business School ( email )

Park End Street
Oxford, OX1 1HP
Great Britain
+44 1865 288112 (Phone)
+44 1865 288805 (Fax)

Centre for Economic Policy Research (CEPR)

London
United Kingdom

European Corporate Governance Institute (ECGI)

c/o the Royal Academies of Belgium
Rue Ducale 1 Hertogsstraat
1000 Brussels
Belgium

HOME PAGE: http://www.ecgi.org

Bruno Roche

Economics of Mutuality ( email )

Maison de la Paix
Ch Eugène-Rigot 2
Geneva, 1202
Switzerland

HOME PAGE: http://www.eom.org

George Serafeim

Harvard Business School ( email )

Boston, MA 02163
United States

HOME PAGE: http://www.hbs.edu/faculty/Pages/profile.aspx?facId=15705

Judith Stroehle

University of St Gallen ( email )

Müller-Friedberg-Strasse 6/8
St. Gallen, 9000
Switzerland

Rupert Younger

Centre for Corporate Reputation - Said Business School, University of Oxford ( email )

Park End Street
Oxford OX1 1HP
United Kingdom

Thaddeus Zochowski

Impact Investing and Sustainability Special Projects ( email )

Boston, MA 02163
United States

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