The Past, Present and Future of Corporate Purpose

Corporate purpose is currently hotly debated amidst much speculation that American public companies are forsaking shareholder centrality in favor of a wider set of priorities. Despite this speculation, systematic analysis of the future of corporate purpose is lacking. This paper correspondingly offers predictions on the trajectory of corporate purpose, drawing on past developments and present trends in so doing. A key reference point is a potential cyclical pattern, which implies public company executives will soon be prioritizing corporate “stakeholders” collectively rather than focusing primarily on shareholders. The history of corporate purpose can indeed be characterized quite plausibly in cyclical terms, with the most recent shareholder-friendly swing of the pendulum occurring in the 1980s due to a wave of hostile takeovers. The future, however, looks different. The 1980s takeover wave probably was a “critical juncture” that altered corporate purpose in a shareholder-oriented manner that is unlikely to change for the foreseeable future.