Will twenty-first century business be mission-led?
Mission-led company: at first, the term seems somewhat surprising. What does it mean?
A mission-led company combines economic profitability with a contribution to the common good. It views itself as a force for societal change, contributing to efforts in respect of the economic, social, environmental, and even cultural challenges of its surrounding context. It is not content with setting up a corporate foundation, making donations, or devising a corporate social responsibility (CSR) strategy— something that is far too often a discretionary policy that fails to get managers and directors truly on board, and that lacks enforceability.
A mission-led company stipulates in its by-laws—in addition to the goods produced or services provided—an extended corporate purpose covering societal issues, and involves its various stakeholders in the wealth creation and distribution processes. Without turning its back on economic performance, or the market, or indeed profitability, it defines new governance rules to revolutionize corporate democracy.
Such a company is not just a pipe dream, it already exists! From the United States to Italy, via Canada or the United Kingdom, new legal forms for mission-led companies have been multiplying over the last ten years or so, reflecting a strong trend. This trend is most evident amongst younger entrepreneurs, who no longer identify with the hard border separating the for-profit sector, too often synonymous with predatory capitalism, from the non-profit sector, with its virtuous disinterested management. They wish to use their financial performance as a tool to further a mission chosen in line with their values.
Following on from our first study on Shareholder Foundations*, Prophil now tackles the subject of mission-led business, a concept that has yet to gain widespread recognition in France, but that is nonetheless enshrined within French company law and championed by a handful of pioneers. This new study offers the first ever comparison of the legal forms available abroad to which France could look for inspiration, and hears from these forward-looking entrepreneurs. We offer them our sincere thanks for their valuable contributions.
Our path is a challenging one, as the subject raises numerous questions about corporate ownership, governance, and the enforceability of strategic decisions for the various stakeholders.
Thanks to our partners, the MINES ParisTech Chair: “Theory of the rm. Governance models and collective creation”, the Caisse des Dépôts, Sycomore Asset Management and KPMG—which by their very diversity attest to the broad interest in our work—we are delighted to have this opportunity to foster debate on these hybrid forms in favor of the common good, and thus to have a role in redefining the concept of the corporate mission at the dawn of the 21st century.
Geneviève Ferone-Creuzet and Virginie Seghers
Co-founders of Prophil
* Study published by Prophil in 2015, in collaboration with the ESSEC Philanthropy Chair and Delsol Avocats, and with the support of Mazars. A shareholder foundation is a foundation that becomes a majority shareholder of a company. To find out more: www.fondations-actionnaires.eu.