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The Canadian Centre for the Purpose of the Corporation conducted a survey with 510 business leaders and more than 3,000 members of the general public.Nathan Denette/The Canadian Press

Businesses need to contribute to the solution of society’s problems, many Canadian company executives say in a new survey – though their support is less enthusiastic when presented with tangible ways of accomplishing that.

The views reflect the results of a questionnaire released Monday by the Canadian Centre for the Purpose of the Corporation, an affiliate of public-relations company Navigator Ltd. The centre says it wants to guide Canadian businesses to be “purpose-driven” and strengthen the contributions they make to society.

The CCPC survey, conducted in May with 510 business leaders and more than 3,000 members of the general public – some who own stock, and some who do not – also found the leaders are more likely to support the idea of a purpose-driven corporation than other Canadians.

To the centre, an authentic corporate purpose “leads the executive team to aim not only at increasing earnings to the benefit of shareholders, but to consider the needs of their other stakeholders – employees, customers, the environment and the communities in which they operate.”

To evaluate the attitudes of business leaders and the public, the CCPC crafted 20 statements that support that overarching thesis. Then they asked the survey respondents to agree with the statements on a scale of zero to 10; responses from eight to 10 were characterized as “strong agreement.” The average percentage of respondents strongly agreeing across the 20 questions makes up what the centre calls a “Purpose Index.”

All told, the Purpose Index came in at 48.1 per cent for business leaders, but just 45.7 per cent for members of the public who are shareholders of publicly traded companies, and 42.0 per cent for members of the public who do not own stock.

For the first statement, “the purpose of a corporation should be to benefit all its stakeholders, including shareholders, employees, suppliers, the communities where it operates, and the environment,” 63 per cent of business leaders expressed strong agreement, as did 63 per cent of shareholders. Just 56 per cent of non-shareholders offered strong agreement.

The statement, “a company’s commitment to all its stakeholders should be at the core of its strategy and its operations,” met with strong agreement from 52 per cent of business leaders and 63 per cent of shareholders, but just 39 per cent of non-shareholders.

“Business leaders are certainly more aware of those issues,” André Pratte, the CCPC executive chair, said in an e-mail. “Discussions regarding the purpose of corporations and [environmental, social and governance] has been pretty well limited to business and academic circles.

“The data shows a clear progression related to purposeful corporations: the public, shareholders, and [then] business leaders, who are both more familiar with the topic and more supportive.”

The support waned and the gaps narrowed, however, when the CCPC’s statements offered up explicit examples of how a corporation might accomplish the aims and be held accountable for them.

The statement, “a company’s report on its ESG performance should be independently audited,” got just 48 per cent support from business leaders, 51 per cent of shareholders and 45 per cent of non-shareholders.

Another, “ESG performance should be a part of executives’ remuneration package,” received just 41 per cent strong support from the business leaders, compared with 40 per cent of shareholders and 31 per cent of non-shareholders.

“Our data shows that Canadian company executives adhere, at least in theory, to the idea that businesses need to contribute to the solution of society’s problems,” Mr. Pratte said. “However, they are skeptical, even opposed to some of the measures suggested to implement this change.”

The survey also revealed regional disparities that may run counter to conventional wisdom: Alberta business-leader respondents generated the second-highest Purpose Index of 53.4 per cent, behind only Atlantic Canada’s 56.2 per cent. British Columbia had the lowest at 45.4 per cent.

A full 73 per cent of Alberta business leaders strongly agreed with the first statement that the purpose of a corporation should be to benefit all its stakeholders, 10 percentage points ahead of the overall number.

Further, 58 per cent of Alberta business leaders strongly agreed with the statement that a company’s report on its ESG performance should be independently audited – eight percentage points above the average and 18 points above the Quebec number.

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