Victoria Hurth works globally at the intersect of academia and hands-on business to help companies transition to be drivers of long-term wellbeing for all (sustainability). This includes advising executives across a wide range of sectors on the intersect between purpose, sustainability, ESG and reporting and how to lead the transformative change needed.
Her forthcoming book is BeyondProfit: Purpose-Driven Leadership for a Wellbeing Economy, co-authored with Ben Renshaw and Lorenzo Fioramonti.
You’ve worked extensively with the British Standards Institution (BSI) and the International Organisation for Standardisation (ISO) on defining organizational purpose. What does ‘purpose’ truly mean in a business context—and how is it misused today?
To talk of purpose is to talk of a meaningful reason to exist, and hence to act. Meaningfulness and purposefulness have the same foundation – as philosophers, spiritual leaders and more recent academics like Victor Frankl clearly outlined – we derive meaning and purpose from being in service to the good of another.
While it has always been generally understood that ‘good’ is anchored to supporting wellbeing and bad is about destroying wellbeing, in the past’ the idea was usually based on a narrow line of sight –serving your neighbour, your community, your nation etc. These days we know that our wellbeing, and the wellbeing of all life on earth, is intricately intertwined. Hence, ultimately, we cannot logically ‘do good’ if it isn’t aligned with the long-term wellbeing of all people and the planet.
Once we clarify this – we start to see that this ultimate shared purpose of long-term collective wellbeing is encoded all around us – in the very definition of sustainability (Brundtland), in the assumed goal of an economy, in the mandate of governments etc. Therefore, the definition of purpose for business, or indeed any organisation, project – or even an individual, has been defined in the British Standard in Purpose-Driven Organizations and in the drafting of the International Standard, as ‘a reason to exist that is an optimal strategic contribution to the long-term wellbeing of all people and the planet’ – this, therefore, also logically anchors to protecting the basis of this collective wellbeing for current and future generations of life in the process.
The standards are critical for giving the world a co-creative space that is conceptually free from the bind of the current assumptions and governance system that is locking us into decisions that harm, and don’t drive long-term wellbeing for all. In this space we can see more clearly the future we want to build and then work out how to adjust the current context of business (and all organizations – including government) so that we can make this reality.
The ’super power’ of purpose as a concept is to tackle the profit motive head on. This is what makes this concept so powerful in business, but what has also made it, naturally, subject to distortion and co-option by the very system purpose is there to change.
I have spent a couple of decades trying to figure out what the concept of ‘sustainability’ meant and how we could achieve it – before I came across the concept of purpose about 13 years ago and asked the same questions.
My practice and research always led me back to the flawed assumption of the benefit of the self-interested profit motive being central to our problems, but all the sustainability concepts I came across either took profit maximization as a given, or critiqued it but without any useful suggestions about what needed to change in actual practice.
When I came across purpose, it was clear that this was the concept, grounded in the real world as a response to unsustainability, that could address the ultimate problem at multiple levels – and that was precious. But for it to be able to achieve this role, and not be yet another concept made a tool of what I call Logic 1 (business-as-usual short-term financial self-interest thinking) it would need support and protection from washing.
In a morbid way, it has been fascinating to watch a quite straight forward concept be inevitably twisted. Purpose puts in the centre of the room the true-ism that that money is symbolic and can never be an end in itself – but always in service of a meaningful end. Our current economic system has just absorbed a set of strange assumptions that leads to the idea that if we serve ourselves financially then our collective wellbeing will be maximised. The consequence is a blind faith that more money equals more wellbeing and that money = good. This in turn stops us questioning the bizarre idea that business should be about profit maximisation and that investors should only care about money. This is the accepted ‘truesim’ that we are afraid to question – even when it is literally driving decisions that are destroying us.
Purpose is the first concept that begs the question – to what end? If that end is long-tern wellbeing for all (and almost none question this), then shouldn’t we be governing whether or not this is being maximized? Isn’t an efficient and effective economy one where organizations are focused and governed directly to this goal rather than in a vague hope that by going via profit maximization we will get there more efficiently and effectively – particularly where the science is now screaming at us that the very opposite is resulting?
Furthermore, businesses are of the most vital types of organizations for driving innovation for our wellbeing. It is also bizarre that we are happy to rely on their financial (but not wellbeing success as cause for celebration. It is also strange that, in ESG terms, we are happy to say that companies can use shared resources to capture financial value for themselves from these resources – as long as they don’t further harm those resources. That can never be an innovation agenda. It certainly can’t be one when we are facing the starkest need for innovation ever. How can it be possible to address our crises and protect and improve our wellbeing unless all organisations are governed to do their best, most innovative and ground breaking work.
However, despite this quite logical foundation, what weexpectedly get is purpose being ‘sold’ as a way to maximise profits, or ‘balance’ profit maximization with something meaningful. This distortion is a natural result of actually questioning profit maximization feeling like a step too far. It is not that business leaders don’t get the logic that purpose is THE meaningful reason to exist, profits a vital means to that end, and shareholders a vital influential stakeholder. It is just that unless as a leader have spent enough time remembering that we designed the system this way and ‘owning’ the imaginative idea that an alternative reality CAN exist – then the power of the status quo is very hard to counter. Our confidence in another way fails.
This is why the book we are writing matters – because it lays out the logical shared ground and how we are stuck in a distorted reality. This way leaders everywhere can build deep confidence and be empowered to move forward boldly, together.
But having this vision and foundation of purpose isn’t enough. Without mass literacy in governance we will continue to have a vision – but no tools to dismantle our current decision-making shackles and create the new.
At the end of the day, if we want a sustainable world then we will need to govern to make our decisions aligned with it, and it is purpose that will energise this change and operationalise this.
If we are happy to destroy wellbeing – then let’s be clear about why and under what circumstances. Let’s use proper governance to make a shared decision that company or industry x can continue to use innovative potential to drive harm. And if we can’t face such questions, or consciously decide to contradict the science – then let’s stop wasting time at conferences and writing reports talking about sustainability when we don’t really mean it – and let’s just party instead.
To move forward we need to focus on two key things – mass literacy in purpose and governance. Without these I believe we will continue to go nowhere useful.
How can boards govern for long-term value creation aligned with people, planet, and prosperity?
As implied above when I mention we need to focus on purpose and governance – there are two core questions we need to answer urgently as humanity. The first is (as Bill Gates posed in his Netflix series on AI): What is the purpose of humanity? As above, I believe we already have this answer and it is long-term wellbeing for all people and planet. We will need to continue to debate all these issues as the central social discussion (especially what is wellbeing which has been so distorted by marketing in a postmodern and Logic 1 world), but in the meantime let’s get on with this as the answer.
The second core question is then is – how can we govern decision-making, so that we maximise the probability that those decisions advance, and don’t harm, the long-term wellbeing of all people and the planet? While pretty much everyone in an organization normally wears both a governance and executive hat, and governance is relevant (and the foundations the same) at the global, national, organizational, community, household and even individual level, governing bodies are ultimately accountable for whole organizations.
Given we have organizations the size and power over our future that was unimaginable in the 1920s, boards (organizational governing bodies and the various governing groups they delegate to) are absolutely key.
In order to be able to answer this second, ultimate, question requires that we are first clear what governance is.
Before ISO 37000 in governance, the only place we could turn to, to understand governance, were codes and guidance that were developed in the context of Logic 1. Hence, that governance was framed to protect financial investment and normally over very short -time horizons. ISO 37000 (a 5-year process I led with my colleague Axel Kravatzky) resolved this and gave us a common language and definition. Governance has three key functions:
Direction (what you exist to achieve and the parameters (boundaries) within which you want to keep in the process);
Oversight (of the direction) and
Accountability (for the direction – without direction there is no possibility of accountability).
Strategy (including governance strategy) is about choosing the best way that the organizational direction can be achieved. This strategy necessarily needs to be freed to be as adaptive and responsive to the fast-moving and increasingly chaotic reality. When we are really clear what the direction is, and we align this deliberately with driving and not harming a sustainable future (i.e. it is purpose-driven), then the rest becomes about the dynamic of how and unhelpful rules can be replaced by a much clearer outer frame. This is where we break free of binds and dictats and enable stakeholder driven deliberations and participation to drive the best approach in context.We can stop taking debates about strategy so ideologically personally – or assume we agree to much or disagree to much (which is what happens when there is no basis to judge one strategy over another). Instead, we can safely know we have a shared frame that unites us and can serve as a neutral ‘judge’ and then go all out debating alternative routes.
However, boards, and especially a governing body, are perpetual decision-making groups and people join them and take their norms as their starting point. The dominant norm is Logic 1 (short-term financial self-interest) and so boards are constrained. They view their role what the organization exists for and the time and skills required based on legacy of Logic 1 that is becoming fast redundant. It isn’t that many boards are not well functioning in context and their skills aren’t vital – it is just that we need to some deep ‘blank page ‘thinking to see what is useful and what needs to change.
At a minimum, we need a collective reimagining of what well-functioning boards look like in the context of ISO37000 and its 11 principles – purpose being the central one. This would get us a long way towards boards aligned with a sustainable future and questioning why their organization exists beyond money – or even if they are focused on profit maximization – thinking about how they can move from Logic 1 (short-term self-intertest) to Logic 2 (long-term self-interest) so at least they are not destroying their goal in the process of trying to achieve it.
While ISO 37000 sets the foundation, the world is on the cusp of a big leap forwards towards a sustainable future, with the development of ISO 37011 in Purpose-driven Organizations in progress and publication due end of 2026. This is will provide detailed specifications for how to govern an organization that generates and protects value in a way that supports the long-term wellbeing of all people and the planet. This will be critical material for boards, everyone in an organization,stakeholders and all citizens to support and hold them to account.
What practical steps can organizations take to move from purpose-washing to purpose-led strategy?
- Diagnose what logic they, and their stakeholders, are currently dominated by (Logic 1 (short-term self-interest), Logic 2 (long-term self-interest) or Logic 3 (long-term other serving)– and they can only really do this by examining their worldviews and their governance system which shapes how routine decisions are made (and their real values, identity and culture)
- Authentically ask themselves how aligned with a sustainable future (long-term wellbeing for all) they want to be and by when – for this they need to understand what is in PAS808 / ISO37011 when published because these are the only holistic full-organizational specifications for what governance behaviours will be required for this to be true throughout an organization.
- Plan the journey and make it happen – and this will require governing it at the level of self (micro), organisation (meso) and the economy/ political/ citizen (macro) levels.
How do current corporate governance structures hinder a transition to purpose-driven organizations? What kind of shifts are needed for leaders and boards to operate regeneratively? You’ve worked on ISO 37000 (Governance of organizations) and ISO37011 (Purpose-Driven Organizations) —how can these help organizations transition from extractive to regenerative models?
I don’t think we can ask the question about governance structure until we ask the question about governance of an organization.
As outlined above, the core functions of organizational governance are direction, oversight and accountability. Unless we know the organizational direction (the ultimate value goal the organization exists to generate) and the value the organization seeks to protect in the process) then we cannot ask questions about governance structure – which is essentially a governance strategy question. In other words – HOW do we best go about governance so that we achieve the direction?
This is where I think we have gone wrong in thinking about governance. Because with a Logic 1 hat we just assume we know the direction – make as much money as possible while protecting the stocks and flows of financial capital that enables this profit maximization in the process – we then end up with fairly stable governance structures that serve Logic 1 governance direction.
So, whilst I think the jury is therefore out on what are the best governance structures that can best generate and protect value for Logic 3 (long-term wellbeing of all people and the planet) , depending on the organizational context – we can be fairly sure, given Logic 1, that they are probably need to change.
For example, the dominance of the normally legally mandated audit committee and its almost singular focus on finance, the focus of oversight and accountability on finance, and with IFRS and its ISSB standards – even the focus on governance of sustainability being constrained to governing the financial bottom line.
We can make a starting guess that having a CSO, which reports to the board, having external scrutiny through a sustainability advisory committee to the board, and including diverse stakeholder insights direct to the board may work (for large companies that are not fully purpose driven), but I just don’t think we should use these as the starting point to get the governance we need. We need to start from the foundations and work outwards to strategy – including governance strategy.
This is what the ISO in Purpose-Driven Organizations is there to address. ISO 37011 sets out what governance behaviours you would expect to if an organization was purpose-driven. ISO is merely the world’s facility for building and encoding consensus on any topic. It is a highly refined consensus-building process. It is also perhaps the most participatory forum we have – with 174 countries having national standards bodies that are part of it (plus eligible liaision organisations) This makes ISO, and ISO37011 particularly, the world’s ‘venue’ to answer (and keep refining) humanity’s second core question – what is the governance we need for a future we want? Without a clear, shared view of this ‘destination’ how can we possibly judge what governance structures are best – or even be able to judge whether we or others are ‘washing’ or ‘hushing’ or anything else in relation to a sustainable future. ISO 37011 could only really happen, because ISO 37000 gave us the credible and confident foundation to talk about governance.
Many people are unaware of these significant developments, but when I reflect on the mechanics of the world coming together to take the leaps needed, I can’t think of any other forum or process that is as useful and participatory as ISO.
So much of the great efforts happening now are hampered by needing to ‘pragmatically’ anchor to an unrealistic Logic 1 starting point. ISO 37011 is about envisioning the future we need – not about trying to tweak the unsustainable one we have. So, for me it is just a matter of time before ISO37011 becomes the basis on which the world participated together to build the basis of a new economy that all organizations and individuals make happen.
Regenerative, for me, is a recognition that we are living organisms – living systems within and in relationship with other living systems. This is one of the core worldviews that sits at the heart of being purpose-driven. Logic 3 (purpose) is about generating and protecting real value in the real world – and so requires engagement with all its realities.
I can’t see how we can maximize long-term wellbeing for all people and planet, while protecting the basis of it in the process, unless we embrace a regenerative mindset. When I think about regenerative, I think about it as a utterly necessary approach (strategy) to achieve the long-term wellbeing of all people and the planet (sustainability). In other words, a regenerative approach is vital to achieve sustainability – for me, counter to what some have said, it is not something different to sustainability. That line of argument only works if you take a degraded and co-opted view of sustainability to be about sustaining the harmful system we have created. Sustainability was always about countering that system.
Regeneration is also about repairing our degraded social and environmental systems so that they can self-regenerate as they naturally do. ESG is ultimately trying to get there – but in a very unhelpful way. This is very much where ISO 37011 comes in as one key aspect (currently sitting in Principle 3 of the standard – as it was in the British Standard on Purpose-Driven Organizations) – whereby it is recognised that no matter what your purpose is, you need to contribute a fair and adequate contribution to the healthy functioning of the social and environmental systems that underpin the long-term wellbeing of all people and the planet. So, these are the two ways that ISO 37011 incorporates and necessarily entwines with a regenerative approach.
Are academic institutions evolving quickly enough to prepare leaders for the challenges we face? What needs to happen?
No they are not at all! Universities are subject to the very same Logic 1 problems as all organizations. We unpicked how and why (and what next) in depth in a paper and special issue on ‘Re-purposing Universities: The Path to Purpose. Worse still, they use flawed starting points as the unquestioned basis for pursuing knowledge, taking us further from the real wisdom we need. This was a point very clearly pointed out by Nicholas Maxwell in a paper in our special issue. However, why we would expect universities or any other organization to be on the right journey when we have only very recently arrived at a global view on what organisational governance iswhich is freed from Logic 1. Only in 2022 did we have the first national standard in purpose-driven organizations. And only with ISO37011 will we have a real basis on which to drive the change we need through governance for long-term wellbeing for all.
Hence, I believe that we are only just moving into the moment where we can consolidate the understanding we have and unite our energy in useful change – i.e. purpose-driven governance. Universities, as the presumed holders of our collective wisdom, will need to be first movers in this – using their insights to educate others. This will not be easy – but utterly vital.
What gives you hope amid the intersecting crises we’re facing—ecological, social, democratic? Your upcoming book – tell us about it – what are you aiming for?
The positive, purpose-driven energy I see everywhere. This, combined with the almost complete agreement of the foundational problems and way forward I have seen in my decade of presenting and testing this material – week after week. In other words, I don’t think we are lacking the energy needed to make the changes needed, or an intuitive understanding of what the problem is that we need to fix – it’s just that we have a confidence, coordination and clarity problem.
That is much easier to resolve than the idea we are all selfish and stupid. The book we are publishing, along with the ISO as the world’s co-creative practical specification will go a long way to addressing these 3 Cs I believe. And after all – we just need to real a social tipping- point for action to snowball.
So, in summary, I think that the decades of work from people globally to build awareness and concern hasn’t gone to waste. These acts in every corner of the world have planted seeds – they just need to be watered.
The final source of hope is, sadly, in the horror. We can’t wish our self-destruction away, and the more we try to, the more we will just accelerate the harm and pressure on ourselves and systems to change. For me, this isn’t a question of if, but when. It is a question of whether we want a functioning and dynamic market economy to support us or we want to trust our future to a group of command-and control decision makers. I feel very few want the later. But if we want a market economy that serves our collective long-term wellbeing then we had better get on with governing it so it does..
This is where the book comes in. It is a strategy – a means to helping the average leader globally to far better see the governance problem we are in, and how it can be changed. This should increase their confidence as well as the global coordination of energy for useful action. Most importantly it will help people understand the role of the ISO and, I hope, get involved in ongoing co-creation, experimentation and refinement over time. We need all 174 countries to be fully engaged! So, it really is a book for everyone so that we can begin the process of mass literacy in purpose and governance. Without this I just can’t see how we can move forward well but with it we have everything to live for.
If not this, what? If there isn’t anything better on the table – let’s get on with it!
Thanks so much for your time. And good luck with the book!
Readers can join Dr. Hurth’s book community here >>
INTERVIEW by Christian Sarkar