Through the looking glass: tying performance and materiality to corporate purpose
Journal
Journal of the British Academy
Type
journal article
Date Issued
2022
Author(s)
Abstract
<jats:p>By making use of the purpose definition set out by the British Academy�s Future of the Corporation programme we argue that performance relates to purpose in two dimensions. Firstly, purpose sets the frame of long-term success and defines materiality for an organisation both from a single and from a double materiality perspective. Secondly, performance in relation to purpose needs to measure profitability net of negative externalities. We review and discuss the current landscape of non-financial reporting and measurement frameworks on how they lend themselves to the determination of materiality on the one hand and to the accounting of externalities on the other hand, in order to achieve an approximation of performance in relation to purpose. We conclude by discussing how materiality and measurement viewed through a purpose-lens could help an advanced understanding of performance in practice for sustainable finance, corporate governance and management decision-making.</jats:p>