Canadian Business Leaders Support "Stakeholder Capitalism" but Implementing its Principles Remains a Significant Challenge

TORONTO, Sept. 26, 2022 /CNW/ - A majority of Canadian business leaders agree with the tenets of "stakeholder capitalism", the view that corporations do not exist only to benefit shareholders, but also have duties towards their other stakeholders – employees, customers, suppliers, the environment and the communities where they operate. This is the main finding of a groundbreaking survey released today by the Canadian Centre for the Purpose of the Corporation (CCPC), a research initiative by Navigator.

Approximately 500 senior executives and 3000 Canadians, 40% of whom hold shares in Canadian public companies, were interviewed by the polling firm Discover for this "purpose index" survey.

Amongst the business leaders, 63% agree that the purpose of a corporation should be to benefit all its stakeholders, and 59% believe that when a company takes into account the interests of all its stakeholders, it ensures its long-term profitability and sustainability. 61% think that a company should have its customers as a main priority, and 58% agree that it is important for a company to have a strong purpose, but even more important that that purpose be authentic.

However, while Canadian business leaders endorse purposeful capitalism's main principles, they are less enthusiastic regarding some of the concrete measures proposed to implement those principles. For example, only 46% of them agree that a company should report annually on its ESG performance "in as rigorous a manner as it does its financial performance", 42% think a company should have the environment as a main priority, and 37% believe that a corporation should take a stance in social and political debates if such involvement is demanded by its stakeholders.

"Canadian senior executives appear to be ambivalent regarding the social purpose of corporations, comments André Pratte, Executive Chairman of the CCPC. Many of them understand that the old, profit-only view of corporations is outdated, but they are not sure about the new model that should replace it."

Surprisingly, Canadians in general are less enthused by stakeholder capitalism than business leaders. For the first time, the CCPC and Discover computed a "Purpose Index" (PI), based on the level of agreement with 20 statements describing purposeful capitalism and companies. Business leaders achieve a relatively low PI of 48,1%, while Canadians who are shareholders get 45,7% and Canadians who hold no shares receive a score of only 42%.

"This study challenges several assumptions about the depth of commitment towards the purpose of the corporation, asserted Dr. André Turcotte, Discover's research principal. It is unique because we look at purpose from the perspective of Canadians, individual shareholders and business leaders. Moreover, we built the survey so we can replicate it over time or for any corporation interested in finding out how they are perceived."

The full report is available at https://navltd.com/insights/ccpc/purpose-index-2022/.

SOURCE Canadian Centre for the Purpose of the Corporation