HEC Paris and Oxford University Publish Landmark Study on Governing Corporate Purpose in Europe
From vision to implementation: corporate purpose as a compass for decision-making, innovation, and governance.
In an era of growing complexity and uncertainty, a new report released by the HEC Paris Purpose Center in collaboration with the University of Oxford sheds fresh light on the strategic value of corporate purpose. Titled “Governing Purpose in European Companies,” the study draws on insights from senior board members and executives across 21 leading European firms, and offers practical frameworks for boards to orchestrate purpose as a source of alignment, innovation, and resilience.
Purpose Beyond Words: A Strategic and Governance Tool
While the concept of “purpose” has often been dismissed as trendy or vague, this report shows that for a growing number of European companies, purpose is no longer just a declaration — it's a driver of decision-making, innovation, and long-term value creation. “Stating a corporate purpose is not enough; it must be implemented to guide decisions and foster innovation,” stresses Hubert Joly, former CEO of Best Buy and now professor at Harvard Business School.
As regulatory frameworks evolve and stakeholder expectations rise, purpose is being rediscovered as a strategic compass that offers clarity amidst ambiguity. “Purpose is no longer just a trend — it’s as indispensable to companies today as management techniques themselves. It is a powerful driver of engagement and a vital compass for action in uncertain times,” adds Joly.
Four Governance Models: One Shared Goal — Alignment
The HEC–Oxford study identifies four board-level modes of orchestrating corporate purpose, each offering a distinct way to structure governance, depending on culture, ownership, and sector:
- MOTTO – Agile, empowering local innovation, but at risk of fragmentation
- GUIDE – Inspires coherence and engagement, yet can drift toward symbolism
- STYLE – Built on trust and autonomy, but prone to ambiguity
- COMPASS – Highly integrated and aligned, but demanding in terms of accountability and clarity
“Among European companies, we observe four distinct board-level approaches to purpose — from the implicit ‘slogan’ to the guiding ‘compass’. Each has benefits and limitations, and the key lies in the alignment between governance and management,” explains Rodolphe Durand, co-author of the report, Academic Director of the Purpose Center at HEC Paris and holder of the Joly Family Chair in Purposeful Leadership.
One of the report’s central conclusions is that misalignment between purpose governance and operational practices is a root cause of underperformance. When companies adopt one orchestration model but implement practices from another, confusion and inefficiency follow.
Bridging Strategy and Culture: The Virtuous Cycle of Purpose
The report highlights the strategic potential of linking purpose with both organizational culture and business objectives.
“In difficult times, companies tend to focus on operational efficiency. But when strategy is built with purpose in mind, its impact is amplified — because everyone knows exactly what they are working toward,” explains Hubert Joly.
“Purpose allows companies to analyze their portfolio not only through financial lenses but also in terms of alignment.” adds Rodolphe Durand.
“Combining the why (purpose), the what (strategy), and the how (culture and behaviors) creates a virtuous cycle,” concludes Joly.
A European Approach Rooted in History, Focused on the Future
The report frames European corporate purpose not as a reaction to ESG pressures or communication trends, but as a deeply rooted and evolving governance model. It reflects a longer historical arc — shaped by post-WWII reconstruction and a longer history where institutions’ and states’ roles interplay — that positions purpose as a foundational pillar of economic activity and each firm’s strategy and identity.
“One of the things that has really come out quite strongly from this is that European companies have a different history which has led to them adopting purpose in a different way,” observes Rupert Younger, co-author of the report, Director of the Oxford University Centre for Corporate Reputation and Chair of the Enacting Purpose Initiative.
“The post-war reconstruction of Europe demanded that companies do more for society at a much more fundamental level. So the deep DNA of companies in Europe has been to address social issues and the role of business in society in a way that you haven't seen so much in the UK and certainly very little of in the US in terms of its history.”
With over 30 million companies employing more than 150 million people, Europe’s future competitiveness may well rest on how its firms govern and implement purpose — not just on whether or how they state their purpose.
Read More
The Central Role of Culture in Purpose-Based Business, Oxford University and HEC Paris, 2024
Rodolphe Durand and Ioannis Ioannou, How Leaders Can Create a Purpose-Driven Culture, Harvard Business Review, November 07, 2023
HAVE A LOOK THE PURPOSE LIBRARY
Learn more about the HEC Paris Purpose Center
Learn more about the Oxford University Centre for Corporate Reputation
Contact: so-institute@hec.fr
Published by: HEC Paris and Oxford University