1.

Purpose
► What is the company's purpose? Does it explain why the company exists?
► Is the purpose bespoke or could it be for any company?
► How did purpose influence any principal decisions the board has made?
► Are there tangible examples of purpose in action?
► Does the company's purpose clearly inform its strategy?
► Is it clear to a reader how strategy delivery helps with realising purpose?
The requirement for boards to establish the At the same time, the extent of the alignment between purpose and strategy.
company’s purpose and ensure it is aligned to accompanying narrative has reduced Achieving this alignment is generally easier
the values, strategy and culture was substantially over time. This reduction is when, like Spire Healthcare (2022 ARA, p18),
introduced by Principle B of the 2018 Code. starker this year compared to 2020 — the first a company evolves its purpose and refreshes
year of reporting during the COVID-19 its strategy, thus providing a natural
Well established pandemic, when many companies had opportunity to explain the development to the
prominent disclosures on their response and reader.
Four reporting cycles later, the concept of
actions in the context of realising their
purpose is well established. Majority of How to bring purpose to life
purpose.
companies state their purpose upfront, and
many include summary visuals that bring Avoiding a reporting “gap” To help bring purpose to life against a
purpose, strategic objectives, values and business-as-usual backdrop, we recommend
stakeholders together. NatWest (ARA 2022, This year’s reduction is a natural evolution that companies give tangible examples of
pp12-13) does this as part of its ‘Purpose given that on one hand purpose is now well purpose in action, for example by
framework,’ Anglo American (Figure 1.1) as embedded and, on the other, the pandemic is demonstrating how purpose influenced
part of its ‘Purpose to value’ disclosure. Some behind us. It can, however, create a reporting principal decisions, as done by Mondi
companies like Howden Joinery (ARA 2022, gap. This is often the case if the purpose (Figure 1.2).
pp8-9) and Rio Tinto (ARA 2022, pp10-11) statement reads like a marketing slogan or is
also reference their approach to sustainability not sufficiently bespoke, most notably
within these summaries. impeding a meaningful articulation of
EY  4