Seeing his name listed in Forbes’ exclusive list of the richest people made Chouinard recoil, saying “it really pissed me off.”

At the time of that California visit, I was serving as the chief operating officer of Timberland, an outdoor footwear, apparel and accessories company. Like Patagonia, it was privately controlled at the time – it has since become part of VF Corporation, a publicly traded outdoor-focused conglomerate.

Timberland’s model blended “commerce and justice” by combining the pursuit of profit with respect for global human rights, support for community service and a commitment to environmental stewardship.

Timberland was one of the first companies in the world to issue a corporate social responsibility report, paid for all employees to perform 40 hours’ community service and was one of the last companies to continue to manufacture millions of shoes and boots in its own factories.

Patagonia and Timberland have both earned acclaim and awards for their creative attempts to demonstrate that business can serve not just shareholders but also employees, local communities and other stakeholders.

Chouinard’s choice to “go purpose” seems to be a more dramatic version of a historic declaration issued by the Business Roundtable in August 2019.

The group represents close to 200 chief executives, including the leaders of JPMorgan Chase, Apple, BlackRock and Walmart. Appearing to abandon its longstanding commitment to shareholder primacy, it recast the purpose of a corporation.

“We share a fundamental commitment to all of our stakeholders,” including suppliers, employees, communities and the environment,“ the group declared in what many observers saw as a shift to a more balanced and responsible form of capitalism.

In my view, however, current systems, structures and incentives ensure that revenue and profit growth remain sacrosanct for companies. As a result, calls by well-intentioned advocates for more focus on social or environmental issues remain no match for a model governed by the pressure to deliver short-term results.

So far, business as usual remains the norm.

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