This book is the product of an extensive research programme undertaken between Mars Catalyst, which is the internal think-tank of the Mars company, and the Saïd Business School at the University of Oxford. Professor Colin Mayer is a leading voice in the debates around business purpose and has written and spoken extensively in the field. His previous writing in this area includes Firm Commitment (OUP, 2013), and Prosperity (OUP, 2018). He is insightful and measured and this comes through in this volume. Bruno Roche was formerly the chief economist of Mars, Inc. and the head of Mars Catalyst. He brings both practical business experience and a commitment to thinking about and developing both the ideas and practices around business purpose. He developed the idea of the ‘economics of mutuality’ a surprisingly confusing concept, but one with a lengthy history in Mars. A fascinating and interesting project.

The book has four parts. The first deals with consists of an introduction and overview by the editors. Part II consists of seventeen contributions designed to deal with the core components of the ‘economics of mutuality’ including reflections on purpose, various aspects of non-financial capital (human capital, natural capital, social capital), accounting and measurement issues and the role of micro-equity, investment funds, partnerships, NGO activism and other matters. Part III includes 14 case studies and then Part IV is a conclusion.

The book contains some significant insights, offering areas for further research and useful debates on important topics, all of which build on current knowledge and research in this increasingly important area. However, the book seeks to achieve far too much and consequently ends up with disconnects between the debates in Part II and the subsequently case studies.

The book’s premise is that the classic Chicago economic model of profit/shareholder value maximization was misconceived in its very nature but that business is in a position to be a profitable force for good that transcends self-interest ‘for the benefit of people, planet and profit’ (page 4) which is labelled mutuality. There are merits, as well as flaws, in the Chicago model but few would argue with the second part of that statement.

The history of the idea of mutuality as it relates to Mars is set out by Jay Jakub in chapter 4. Forrest Mars Snr wrote, in a 1947 letter, that the aim of the company (page 57) ‘is the manufacture and distribution of food products in such manner as to promote a mutuality of service and benefits,’ listing consumers, suppliers, competitors, government, suppliers, employees and shareholders as all sharing in this mutuality.

The economics of mutuality takes specific account of a wider range of impacts on people and planet, not least through embracing human, social and natural capital (chapters 10-13). The term ‘economics of mutuality’ though is confusing. The ideas extend beyond the ideas of mutual ownership (see chapter 17) but that is what most people will immediately think of and hence might be distracted from the wider argument. The terminology cannot be readily grasped.  There remains a distinct vagueness when discussing the range and measurement of alternative forms of capital. The editors define mutuality as involving trust, a wider and more pragmatic view of the firm, measuring non-financial performance and developing simple metrics and reporting. The book would have carried more coherence if this definition had more clearly formed the shape of the book and then developed in the case studies. This would have given both a sharper and yet more in-depth analysis.

At the heart of the argument is the idea that the effective boundaries of the firm should be extended beyond the contractual definitions of the traditional corporation which then enables the establishment and pursuit of wider purposes. This argument merits much more discussion as it is a genuinely innovative and creative idea. Colin Mayer and Bruno Roche argue, ‘companies are part of larger business ecosystems and as such, have responsibilities to individuals, communities, and resources that contribute to business performance’ (page 14).  Few would disagree with that and yet extending the boundaries of the firm poses challenges for the structure and nature of the corporation and there remain several conundrums. What is the legal structure which will shape the future corporation? How will the various contractual relationships be reflected in that structure? Are there different possibilities for public, private and family companies?

Another area of significance identified and certainly in need of further research is the development of metrics of measurement for the wider range of capitals identified leading to the idea of a mutual profit and loss account. Chapters 13, 14 and 15 dealing with accounting for natural capital (Richard Barker), implementing a mutual profit and loss account (Robert Eccles and Francois Laurent) and the impact of mutual profit on business behaviour (Robert Eccles and Judith C. Stroehle) were all excellent chapters pushing at the boundaries. Yet, it remained theoretical. One was left wondering whether anyone had actually implemented this sort of accounting approach. As Eccles and Laurent note, to be ‘meaningful and effective, the mutual P&L relies on the selection of material issues and initiatives, the right metrics, and a certain degree of stability over time’ (page 197). This is essentially a rather vague and highly subjective set of criteria; accounting and measurement, however, depends on objective criteria. No concrete examples were actually given and the idea was not explored in the case study section.

The case studies are all examples of businesses which pursue wider purposes and objectives for the good of society, for people, for planet and also for profit. The examples range from supply change management, micro-equity initiatives, fair trade, alleviation of poverty and specific examples of business eco-systems designed for the good of society. Some are well-known. All are good, even inspiring examples of profitable business for good. What was much more difficult was to see the specific (rather than general) link between the earlier chapters and the case studies.

Overall this book is a helpful contribution to the wider debates and draws on a number of important areas for further development and future research. The question remains of how business, mainstream commercial business, can be refocussed in positive ways for the benefit of the various mutually inter-dependent players, rather than simply some good examples of business for good. This requires a more focused approach, reflection on legal structures, their limits and boundaries, and how to reflect new structures as well as the issues of measurement and reporting across a wider range of metrics.

Putting Purpose into Practice: The Economics of Mutuality, edited by Colin Mayer and Bruno Roche was published in 2021 by Oxford University Press (ISBN: 978-0-19-887070-8). 404pp.