The corruption of purpose in business – and how to address it

Sunday 18 January 2026

I recently saw a post on Bluesky headed ‘The 9 millionth example of how Private Equity ruins all things’ which linked to a BBC story about how veterinarian practices, which have increasingly been taken over by private equity, are prioritising revenue over common sense care by pushing unnecessary blood tests and X-rays. It sounded a lot like health care in the US. In the words of one vet: ‘it was crazy….it was all about hitting targets’.

Although I have no particular interest in the vet sector it really rang true – we have all read about, heard about, or experienced many stories about private equity prioritising financial performance above all else. The recent abysmal performance of South East Water, and the other water companies, also comes to mind. Don’t get me wrong, I am a believer in capitalism, the need for strong financial performance and proper allocation of capital – but the problem with private equity, as well as much of the corporate world is that the purpose of business has been corrupted. The pursuit of financial performance alone has become the purpose – not the provision of sensible, effective vet care, or the provision of safe and effective water services.

The purpose of business is not to make profit. In the words of the great management guru Peter Drucker, (whose work should be central to all business and management education):

“Business enterprises … are organs of society. They do not exist for their own sake, but to fulfill a specific social purpose and to satisfy a specific need of a society, a community, or individuals.”

Peter Drucker also said that profit was not the objective but rather a constraint, and an essential condition for the survival of the business. Modern, private equity driven capitalism with its focus purely on profit, however much they try to disguise it with PR, has forgotten this wisdom.

The rise of purpose driven business in different forms like B Corps and Employee Ownership Trusts is encouraging, but we still have a long way to go.

We need to radically reform business and finance. The answer is combining steward ownership, or other forms of employee ownership, with high levels of transparency and employee education in business.

Steward ownership is based on two principles:

Self-determination: The company cannot become an object of speculation but remains self-determined and independent in the long term. The steering wheel always remains in the hands of people who are connected to the company and its mission.

Purpose orientation: Profits are a means to an end, not an end in themselves. They serve the company’s mission and long-term development or can be used to fund charitable activities. The value created within the company cannot be extracted by the company owners for their personal benefit.

Steward owned businesses still give capital providers a fair return, but they keep control with the people in the business.

The best example I know of transparency and employee business education is captured in the system, ‘The Great Game of Business’, (GGOB), pioneered by Jack Stack at the Springfield ReManufacturing Corporation, which is now also employee owned.

Implementing GGOB includes sharing all financial information with all employees, teaching them the ‘rules’ of business, and involving them in decision making at every level.

One way to drive these kind of changes in companies would be specialised funds and a pioneering example is Krisos.

Krisos, established by the team behind Corporate Rebels, buys small and medium-sized businesses and turns them into self-managing organisations that are focused on making a positive impact on the world. It is still early days but the results look promising.

At this time, more than ever, it is clear that we need to change the way we own and run business. This is one of society’s primary challenges and would help address many other business and societal problems including the curse of narcissistic leaders, the need for environmental sustainability, and addressing income inequality. Indeed, we may never solve those problems unless we overcome the corruption of purpose in businesses.

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