From Profit Maximisation to Purpose-Driven Leadership

From Profit Maximisation to Purpose-Driven Leadership.

Learn why companies must move beyond short-term profit maximisation and embrace purpose-driven leadership, balancing people, planet, and profit in harmony.

From Profit Maximisation to Purpose-Driven Leadership

Boardroom Briefs with Frans Versteeg

In many boardrooms today, I see companies caught in a kind of corporate hurricane, constantly busy, putting out fires, and obsessing over short-term profit. Plans change overnight, initiatives get postponed, and energy is spent reacting to the storm rather than finding the calm centre.

Remaining calm and dedicated to the purpose in this environment is not easy. Yet it is essential. Too often, profit maximisation becomes the ultimate goal. Of course, profitability is crucial, it is like the air we breathe. Without it, the business cannot survive. But just breathing is not living, and profit alone should not be the reason a company exists.

What’s needed is what I call the courage to care for people, planet, and profit. This means pushing back against the overwhelming focus on shareholder value and reclaiming a longer-term vision that connects the company to the world around it.

This idea isn’t new. The Rhineland model of stakeholder-oriented governance, for example, valued long-term relationships and connection to the environment. Similarly, the Earth Charter, now 25 years old, reminds us we are not apart from or superior to nature but part of it. Peace and sustainability come from right relationships: with ourselves, with others, with the earth.

Companies have an essential role to play in restoring this connection. Governments alone cannot carry the burden of addressing the world’s challenges. Businesses, large and small, can create value while respecting the environment, working in harmony with nature instead of against it.

This requires moving from extraction to reciprocity, taking from the earth, yes, but also giving back and allowing ecosystems to regenerate. We need to recognise that true growth happens when we dare to grow with nature, not at its expense.

So, what do I observe in corporate life today? With some notable and inspiring exceptions, many companies remain stuck in short-term profit orientation, trapped in firefighting mode. But those who find the courage to care, those who redefine their purpose beyond profit, are the ones who discover how to thrive sustainably, even in the eye of the storm.

Highlights:

00:00 Introduction: The State of Modern Companies

00:09 Short-Term Orientation and Profit Maximization

01:14 The Importance of Purpose Beyond Profit

02:13 The Courage to Care: People, Planet, and Profit

03:01 Reconnecting with Nature: The Earth Charter

04:07 The Role of Companies in Today's World

04:52 Conclusion: Moving from Extraction to Reciprocity

Links:

Website: https://www.fransversteeg.com/

LinkedIn: https://www.linkedin.com/in/fransaversteeg/

Transcript:

What's going on in a lot of companies is, uh, difficult and dangerous to make big generalizations. But what I see in my board advisory role is a lot of short-term orientation, a lot of busy activities, and also firefighting. There's a very preoccupation with profit maximization in the short term. Lots of activities get postponed, and lots of activities change overnight. It is as if a lot of companies are moved by the hurricane, but they're not in the eye of the storm to find peace, quiet, and stability when the outside world is storming and raining, and all sorts of difficult and unexpected developments are everywhere.

How do you basically remain calm and remain dedicated to purpose? Also, things that I often talk a lot about are, how can we get away from just profit maximization? Let me be clear, I appreciate the need for profitability, but I very often say profitability is like the air that we breathe. You really have to keep breathing—no misunderstanding. If you stop breathing, you are in a big problem. But just breathing can never be the purpose, it can never be the goal of the company. It really takes, I would say, the courage to care: the courage to care for people, planet, and profit.

What I see nowadays is a lot of emphasis on shareholder value, a lot of short-term orientation towards that goal. Strangely, we have had periods in which stakeholder value and long-term orientation—in the Netherlands or Europe, we would say the good old Rhineland model—was actually not old-fashioned. It was actually about staying connected to the environment.

I myself am a friend of the Earth Charter. The Earth Charter might be something a lot of people haven't even heard of, but it's a very interesting and important document that this year celebrates its 25th birthday. Basically, the Earth Charter is advocating again and reconnecting again on the notion that we are not apart from nature, we're not above or superior to nature, but we are part of it all and living in harmony.

The Earth says, "Realizing that peace is the wholeness created by the right relationships with oneself, with other persons, other cultures, other life, Earth, and the larger whole of which all are a part." Now, that may sound very lofty and idealistic and up in the air, but basically, I feel that companies have a very big role to play in today's world. Most national states only have a limited possibility to—they need to play their role. But I think that the larger companies and also the smaller companies all can play a role in reconnecting us and still making a profit, but indeed have the courage to care, to define your purpose, and dare to grow, but dare to grow with nature, not against it.

So we need to basically move from extraction to reciprocity, to giving back. And then there is no issue that you can use the resources of the Earth as long as we also give our part of the possibility to replenish itself. I think in the last, maybe so many hundreds of years, we have become so-called emancipated, but we have lost that normal natural connection. So, coming back to your first question, what do you see in companies and in corporate life today? With all the beautiful exceptions that I also see, there are many companies at the moment that I can see.