Even at the beginning of the year, we found most CEOs saw the primary objective of their organization shift from purely profit to also consider their purpose in society. Less than a quarter saw their organization’s overall objective in narrow ‘managing for shareholder value’ terms; with 54% of global CEOs taking a broader, purpose-driven approach focused on multiple stakeholders. Furthermore, one in five said their organization’s primary objective is to improve society.
The Covid-19 pandemic has only served to enlarge the importance of purpose in targeting issues and finding solutions. Just as operational strategies have undergone a transformation, organizations’ purposes have required a rethink as well. Seventy-nine percent of global CEOs say they re-evaluated their purpose as a result of Covid-19. Carefully listening to different stakeholders and encouraging dialogue will be an important element of this re-evaluation, particularly if it becomes clear that the current purpose needs to be adjusted to better meet the needs of a stakeholder group.
This increasingly personal and emotional connection to purpose during the pandemic reflects that CEOs around the world face similar health and family challenges as their communities. In fact, 39% in our study have had their health, or the health of one of their family, affected by Covid-19.
Out of those personally affected by the health implications of the crisis, only 4% made no change to their approach to the pandemic. In all, 55% changed their strategic response, either completely or to some degree. Another 40%, while not changing their strategy, did pay more attention to the human aspect of the pandemic.
At the beginning of the year, we found CEOs were increasingly prepared to personally lead the way in tackling society’s major challenges: around two-thirds said the public is looking to businesses to fill the void on societal challenges. At the same time, 76% of global CEOs said they had a personal responsibility to be a ‘leader for change on societal issues’.
Companies looking to help are localizing their efforts as well. During the pandemic, there are numerous examples of companies playing a significant role in their country’s response, from developing products and services for front-line workers to financial contributions.
While the pandemic has given companies the opportunity to demonstrate how they can make a real difference to society, scrutiny of corporate actions has never been stronger.
To maintain and build on the trust of employees, customers and communities, CEOs must demonstrate their organization’s purpose is meaningful, relevant and makes a difference. The pandemic has shown the power of purpose. However, it must be both dynamic enough to reflect the moment and grounded enough to have staying power. And the CEO must lead from the front to ensure it delivers.
Unless otherwise indicated, throughout this report, “we”, “KPMG”, “us” and “our” refer to the network of independent member firms operating under the KPMG name and affiliated with KPMG International or to one or more of these firms or to KPMG International.