The Growing Role of Boards in Purpose Oversight
In recent years, more companies have articulated a social purpose — a clear reason for being that seeks to create positive societal impact. Yet simply declaring a purpose is not enough. For purpose to meaningfully influence strategy, culture, and long-term performance, it must be actively overseen at the highest level: the board of directors.
A recent review of Canada’s top 60 public companies (the TSX 60 provides a snapshot of how boards are embedding purpose into their governance practices. The study examined public disclosures — including annual reports, ESG reports, and corporate websites — to determine which companies had a social purpose and how boards were formally involved in overseeing it.
Key Findings
Among the 24 TSX 60 companies with a declared social purpose, one-third explicitly assign the board of directors a role in overseeing purpose. All banks with a declared social purpose, along with Canadian Tire, Metro Inc., Pembina Pipeline, TELUS, and WSP, include some form of board oversight in their governance mandates.
The study highlights a spectrum of approaches, reflecting that purpose governance is still an emerging practice and not yet applied consistently across Canadian boards. Some companies have no formal board oversight of purpose at all, while others are beginning to embed it into their governance structures.
Stronger practices include:
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Purpose as central: Some boards, such as WSP and TELUS, position purpose at the heart of strategic planning and organizational culture, explicitly linking board responsibilities to achieving and reinforcing the company’s purpose.
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Purpose as an oversight priority: BMO and Scotiabank place purpose oversight at the top of their board mandates, delegating detailed monitoring and reporting to specific committees.
More limited approaches include:
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Purpose as a consideration: Some companies treat purpose primarily as a factor in decision-making rather than a core guiding principle, which may limit its influence.
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Purpose tied to ESG or branding: In other cases, purpose is closely associated with ESG initiatives or brand positioning, suggesting it is viewed more as an ESG or marketing strategy than as a company’s foundational reason for being.
Four companies — WSP, TELUS, BMO, and Scotiabank — stand out for the degree to which purpose is formally embedded in board oversight. In these cases, purpose is not simply a statement but an explicit governance responsibility tied to strategic oversight.
Overall, while approaches vary, the fact that boards are beginning to update governance practices to formally oversee purpose reflects a shift in how corporate leadership is interpreting its role.
Challenges and Risks
For the majority of TSX 60 companies that publish a social purpose, purpose governance remains nascent. Companies whose boards do not actively oversee purpose face several potential risks:
Perceptions of “purpose-washing,” which can undermine credibility.
Misalignment between stated purpose and corporate behavior, potentially weakening organizational culture and stakeholder trust.
Missed opportunities for long-term value creation and innovation driven by purpose.
Moreover, the 30 TSX 60 companies without a declared purpose may be operating without a clearly articulated reason for being. This absence could limit boards’ ability to align decision-making with long-term value creation, a core element of fiduciary responsibility under Canadian corporate governance norms.
As Ed Waitzer, an influential Canadian lawyer, notes in his foreword to the report, “The findings of the report are grounds for optimism. It identifies a significant number of leading Canadian corporations that have been proactive in addressing the tensions inherent in shareholder primacy and acknowledging, as did the Supreme Court, the limitations of doing so. Their relatively nascent focus on ‘purpose’ is likely to prove a constructive pathway to a more nuanced and effective vision of corporate governance.”
The Canadian Purpose Economy Project has also published Purpose Governance Guidelines to help boards and their advisors translate purpose into concrete governance practices. A recorded webinar, Purpose in the Boardroom: Lessons from Canada’s Top Companies and Governance Leaders, further explores how some Canadian companies are embedding purpose into board oversight and decision-making.
The Future Role of Boards
Purpose governance among Canada’s largest companies is still evolving. While a third of companies with a declared social purpose have formal board oversight, most continue to treat purpose as a secondary consideration rather than a central compass guiding strategy and culture.
Without a clear and effective board mandate for overseeing purpose, purpose statements risk becoming little more than window dressing. Boards that actively monitor purpose execution illustrate how embedding purpose into governance can align strategy and culture, strengthen stakeholder trust, and support long-term value creation.
As expectations rise for companies to translate purpose into meaningful action, boards have a critical role to play. Formal board oversight can turn purpose from a statement into an operational force shaping both societal impact and business performance.
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Coro Strandberg is President of Strandberg Consulting, which provides strategy advice to companies and industry associations that seek to integrate social and environmental considerations into their purpose, governance, operations and supply chains to create business value and societal benefit.
Published Jan 20, 2026 4am EST / 1am PST / 9am GMT / 10am CET