2. The purpose of business is not to maximize profits for shareholders but to steward our resources to serve the world in an economically sustainable way.
Every organization operates based on certain assumptions. Once I interviewed a bank vice-president for a feasibility study for a capital campaign. He said corporations should not make donations since they exist to maximize profits for shareholders. Individual shareholders can decide whether to donate to charities from their personal funds but companies should not make the decision to donate shareholders money, he thought. Fortunately for the nonprofit I consulted for, the bank made a generous donation despite the V-P’s opinion.
Organizational assumptions taken to the extreme can have devastating consequences. The practice of maximizing profit for shareholders has led to global warming.
In the second of "Bakke’s Joy at Work Top Ten," he balances profit for the shareholder with the needs the world and the need of the company to be sustained economically.
How does this translate from the business world to the nonprofit world?
As part of my work for Evergreen Leaders I recently I’ve begun writing the introduction to 7 Paths of Thriving Organizations, a book on the issues that nonprofits need to pay attention to in order to thrive. As I was writing I began to ponder the assumptions that Evergreen Leaders is built on. I came up with three that balance the interests of everyone affected by the organization:
- Evergreen Leaders shares power justly between board, staff, clients, suppliers, genders, ethnics, neighbors and strangers.
- Evergreen Leaders shows mercy when people screw up.
- Evergreen Leaders faithfully carries out its word.
What are the assumptions about who benefits from your work place?