Grow the Pie
How Great Companies Deliver Both Purpose and Profit

Companies can both serve society and generate profit. This book shows how - based on rigorous evidence and an actionable framework.

Alex Edmans (Author)

9781108494854, Cambridge University Press

Hardback, published 26 March 2020

382 pages, 19 b/w illus. 1 table
23.5 x 15.8 x 2.7 cm, 0.66 kg

'An important, thoughtful, and timely book. The conflicts surrounding business, and its effects on society, are the subject of a heated debate. With clarity and insight, Alex Edmans makes a valuable contribution to this key debate. Anyone interested in this important subject would find much to learn from, or wrestle with, in this book.' Lucian Bebchuk, Harvard University, Massachusetts

A Financial Times Book of the Year 2020! What is a responsible business? Common wisdom is that it's one that sacrifices profit for social outcomes. But while it's crucial for companies to serve society, they also have a duty to generate profit for investors - savers, retirees, and pension funds. Based on the highest-quality evidence and real-life examples spanning industries and countries, Alex Edmans shows that it's not an either-or choice - companies can create both profit and social value. The most successful companies don't target profit directly, but are driven by purpose - the desire to serve a societal need and contribute to human betterment. The book explains how to embed purpose into practice so that it's more than just a mission statement, and discusses the critical role of working collaboratively with a company's investors, employees, and customers. Rigorous research also uncovers surprising results on how executive pay, shareholder activism, and share buybacks can be used for the common good.

Introduction
How to read this book
Part I. Why grow the pie? Introducing the idea: 1. The pie-growing mentality: a new approach to business that works for both investors and society
2. Growing the pie doesn't aim to maximise profits – but often does: freeing a company to take more investments, ultimately driving its success: 3. Growing the pie doesn't mean growing the enterprise: three principles to guide trade-offs and which projects to turn down
4. Does pieconomics work?: data – not wishful thinking – shows that companies can both do good and do well
Part II. What grows the pie? Exploring the evidence: 5. Incentives: rewarding long-term value creation while deterring short-term gaming
6. Stewardship: the value of engaged investors that both support and challenge management
7. Repurchases: investing with restraint, releasing resources to create value elsewhere in society
Part III. How to grow the pie? Putting it into practice: 8. Enterprises: the power of purpose and how to make it real
9. Investors: turning stewardship from a policy into a practice
10. Citizens: how individuals can act and shape business, rather than be acted upon
Part IV. The bigger picture: 11. Growing the pie more widely: win-win thinking at the national and personal levels
Conclusion
Action items
Appendix
Acknowledgements
Endnotes
Index.

Subject Areas: Corporate governance [KJR], Business ethics & social responsibility [KJG], Business & management [KJ], Investment & securities [KFFM], Finance [KFF]