In the midst of this meeting, where it was important that my boss demonstrate potent leadership, his phone rang. “Excuse me, I need to take this call. It’s my wife,” he told the gaggle of men, who all stood up and exited the room. This did not damage my boss’s reputation; indeed, it elevated him. He showed that family mattered. He acted on a value that might have been a risk but was actually a strength.

When I say this was the first time I met a corporate value, I mean it was the first time that I saw that values, unlike products and processes, come to life only in human-to-human interactions. This makes bringing corporate values to life extraordinarily difficult because they are reliant on people, not on processes, systems or automated customer service bots.

People and corporations need to align our different interests so that the marketplace is the home of whole lives and livelihoods.

– Pamela Divinsky, founder, Invisiblehand.company

Corporations face complex and treacherous conditions: competing demands for scale and sustainability, trustworthiness and profitability, quality and cost containment – and the need to play equally well the roles of employer, marketer, business and citizen. And they must do all this in a marketplace where deception has dented their believability, where customer engagement with front-line workers is increasingly unhelpful if not disrespectful, and where AI-defined actions render corporations increasingly non-human. Add to this the erosion of corporate citizenship with all its acronyms: CSR, ESG, DEI.

In this environment, how can corporate values contribute to business success? Do corporate values even matter?

Three lessons on the role of corporate values

There is competing evidence about the place of values in today’s corporate landscape. An examination of Canada’s top 100 companies on the TSX Composite Index reveals three things: first, 97 of these 100 companies have publicly stated values. At the very least, this shows that companies believe there is value in defining their values. Corporations want us to believe that how they do business matters.

Second, the stated corporate values group into three categories: those that are about being fair and honest, those that assert being innovative and inventive, and those that tell us that the company cares about people and the planet.

The corporate values of Canada’s top 100 companies are more than just similar; they are expected. Do we not assume degrees of honesty, innovation and caring from all organizations? Well, perhaps not, but without the assumption, the market narrative and its corporate players lose their legitimacy.

Which takes us to the third observation. Notwithstanding the degree to which corporate values are predictable, and may be performative, they are about one thing: earning respect. Where we may believe that corporations have power over us, their power is a function of our preference and purchase. It may be that corporate values are essential for corporate profitability.

The corporate values gap

But as we all know, there is overwhelming, almost daily, evidence of a corporate values gap. One Canadian example: price-fixing orchestrated by competing bread producers and supermarket companies inflated the price of bread between 2001 and 2015. Charges were laid, fines were paid. But let’s look at the stated values of one of the companies involved, Loblaws: “Care, respect, excellence and ownership.” Loblaws says it is committed to “building trust by following through on promises.” Values or behaviours – what are we to believe?

The values gap reflects aspirational promise, like someone who commits to running 10 kilometres every morning but actually runs only once a month. Despite the disparity, the aspiration encourages improvement. Stated but under-realized corporate values may earn our respect but equally deserve our condemnation.

A ‘virtuous circle’ has made the U.K. the world leader in sustainable business education

There are important ways that corporate values are invaluable: they can be the evaluative criteria for strategic decisions to ensure that corporations make the wisest choice between expediency, exploitation and excellence. Corporate values can be the way people inside a company cultivate connectedness and community, benefiting from the richness of different perspectives and interests. Values can also be the best protection against the dehumanization perpetrated by large language models and AI. Corporate values are the key ingredient of earned respect – and profitability.

A source of earned respect

In his 2021 book Value(s), Mark Carney artfully summarized the troubled relationship between value and values: the “value paradoxes” between what people value and what the market values is heightened by a marketplace defined more by self-interested individuals than by socially responsible citizens. This is not a new problem; it has been the essential tension of capitalism, one that Adam Smith’s invisible hand was designed to resolve.

But the narrative of how the marketplace – through the laws of supply and demand – creates the right results is broken. Today the marketplace is filled with more deception and distrust than credibility and respect. Today we simply do not know what is right or wrong.

And this is why corporate values matter more than ever. People and corporations need to align our different interests so that the marketplace is the home of whole lives and livelihoods.

If corporate values are to be the source of earned respect rather than a “tale, full of sound and fury signifying nothing,” they need to come to life through the actions of all members of a corporation. This takes courage, requires commitment and demands caring. It means focusing on the human-to-human, where values come to life. Only then can corporate values be the source of trust and profitability.

There are some hints that corporations understand this. Nomen Nescio, a Finnish clothing brand, tells us to “Wear values, not trends” – sexy branding that speaks a truth. Just like my boss all those years ago, who wore his values through his actions. What values are you wearing these days?

Pamela Divinsky is the founder of Invisiblehand.company. She wrote this with the input of Kathrin Bohr, head of strategy at Invisiblehand.company. 

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