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 numerous real-life examples, 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 shows how to embed purpose into practice so that it’s more than just a mission statement, and discusses the critical role of collaboration 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.

Chapter Outline:

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 what 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 How to turn 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