Institutional change in the corporation: the new social charter

Abstract

Purpose

To analyze the extent of, and the reasons for, institutional change in the private corporation.

Design/methodology/approach

The paper identifies seven “new rules of corporate conduct” which, in total, represent a radical change in the social contract between society and the corporation. It then speculates about future changes in corporate purpose and governance.

Findings

A central feature of the new corporate charter is that it is likely to entail a redefinition of the relationship between profit and corporate purpose. The purpose is service to society (i.e. serving social needs), while profit provides the means, motive and measure.

Originality/value

This paper provides the basis and rationale for moving the corporation from “profit‐as‐purpose” to “service‐as‐purpose” as the organizing principle for its strategies, values and actions.

Citation

Wilson, I. (2005), "Institutional change in the corporation: the new social charter", On the Horizon, Vol. 13 No. 1, pp. 20-23. https://doi.org/10.1108/10748120510601626