Companies today must strike balance between profit and purpose: Panel

SINGAPORE - When economist Milton Friedman wrote in his 1970 essay that a company's sole responsibility was to shareholders, and not to the public or society, he was addressing the sociopolitical context of that time.

Panellists at Thursday's Stewardship Asia Roundtable 2022 generally agreed on this during their debate on what it means to be a socially responsible corporate leader. This theory and the resultant belief in"trickle down economics and wealth" carried a lot of weight through the 1980s and 1990s, with powerful proponents like then United States President Ronald Reagan and then British Prime Minister Margaret Thatcher.Prof De Meyer said today's world is a very different place, facing very different and complex challenges - such as climate change, wealth disparity and social disruption - which cannot be addressed by such simple theories.

"CEOs need to be incentivised, and there has to be accountability," he said."What are the best mechanisms to achieve this in today's context?"

Purpose is to Profit. Profit is the only Purpose.

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