As more companies adopt a “social purpose”, a new category of risk is emerging—purpose risk. Senior leaders need to understand that purpose isn’t just a communications tool; it’s a strategic asset that carries both risks and opportunities. Ignoring it could expose your organization to reputational, operational, and stakeholder trust issues. Integrating purpose into enterprise risk management is becoming a boardroom imperative. In this article, Coro Strandberg- one of Canada’s leading authorities on social purpose- briefly explains the linkage between purpose and the related risks which boards and executive teams should consider.
In 2024, I was honoured that Coro Strandberg invited me to contribute to a ground breaking paper which she authored entitled “Enhancing risk management practices: A how-to guide for social purpose companies”. To our knowledge, this was a first of its kind- a short guide for risk managers, chief risk officers and others responsible for Enterprise Risk Management (ERM) at social purpose companies that are enhancing their risk management practices to include their social purpose (purpose) in their overall risk profile. Coro’s innovative paper dissected the processes needed to identify, assess, control, monitor, and report on social purpose risks. Our hope is that this template is now widely used to assist in the management of (by executives) and oversight of (by boards) social purpose risks. A link to Coro’s paper is included at the bottom of this paper.
The following information was composed by Coro Strandberg specifically for board members and executives who read risk research mailings from Directors Global Risk Consulting Inc. (Directors Global). Coro and Steve Mallory are both instructors for the Governance Professionals of Canada. Directors Global thanks Coro for providing this overview to assist our constituents in understanding this important subject.
Why Purpose Belongs in Your Risk Strategy, by Coro Strandberg
Boards are increasingly accountable for how their organizations deliver on their stated purpose. But while many companies have adopted purpose statements, far fewer are managing the risks to their purpose—or the risks arising from it. These include:
- Stakeholder skepticism or disengagement
- Reputational damage from perceived “purpose-washing”
- Misalignment between purpose and strategy
- Gaps in leadership, employee understanding, or governance readiness
If left unmanaged, these risks can undermine not just trust—but performance.
That’s why purpose should now be considered a core risk domain, alongside financial, operational, and ESG risks. It influences employee engagement, stakeholder relations, customer trust, and innovation. At the same time, purpose can mitigate other risks—such as talent shortages, cultural resistance to change, and declining customer loyalty.
Boards and executive teams are starting to act. For example, Coast Capital Savings now reports publicly on both the risks to achieving its purpose and risks from its purpose. It also discloses how purpose informs its risk frameworks, decision-making, and performance reporting. Their approach is based on emerging guidance from the Canadian Purpose Economy Project.
To help boards and risk leaders build these practices, the Canadian Purpose Economy Project and Directors Global Risk Consulting developed a practical guide outlining how to incorporate purpose into risk management systems, policies, and oversight. It provides a five-step approach and includes sample risk factors and mitigation strategies for boards and risk committees to consider.
Purpose, when managed well, becomes a strategic advantage. It helps companies build trust, stay relevant, and future-proof their business.
To learn more about Social Purpose, Coro can be contacted at: coro@corostrandberg.com
Further Reading
Enhancing Risk Management Practices: A How-to Guide for Social Purpose Companies (CPEP, 2024)
Social Purpose Strategy: From Why to How (CPEP, 2024)
Purpose Disclosure Guidelines (CPEP, 2024), see pp. 19–20
Coast Capital 2024 Purpose Impact Report
Canadian Purpose Economy Project
