Corporate Success in Law: Aligning Strategy, Purpose and Honest Profit in 2025

What does it really mean for a company to succeed? People argue about this everywhere—from boardrooms to courtrooms to business schools. The question seems simple but the answers are all over the map.

Most laws tell company directors to act in the “best interests of the company” or to “promote the success of the corporation.” But let us be honest—nobody agrees on what success actually means. Is it just making money fast? Is it about growth over decades? Winning the market? Saving the planet? Helping society? The law does not say and everyone is left guessing.

In 2025, this is not just some abstract debate. It is front and centre in real-world fights over climate change, financial crashes, inequality, political meddling and whether capitalism even deserves to stick around.

For years, one answer pretty much ruled the day. Milton Friedman said the only real job of a business is to make money for its shareholders—just follow the rules and rake in the profits. Worrying about the environment, society or politics? That was not the company’s problem. That idea shaped how companies ran for decades. But the world has changed and that old approach does not fit anymore.

Now, companies do a lot more than sell stuff or provide jobs. They sway elections, shape what we talk about, change how and where people work, redesign cities and even mess with the planet’s ecosystems. With all that power, people are watching them more closely than ever.

So new ideas like Corporate Social Responsibility (CSR) and ESG (Environmental, Social and Governance) have popped up. Companies add new reports, follow more rules and make big promises about ethics and responsibility. But despite all this, people still do not trust big companies. Markets keep failing. The environment keeps getting trashed. We keep seeing financial disasters. Lawmakers try to keep up with new regulations but they are always a step behind. Meanwhile, good companies struggle while the bad ones cut corners and find new loopholes.

Maybe the problem is not too little regulation. Maybe we have just missed the point about what profit really is—and what it means for a company to succeed.

Rethinking Profit: From Exploitation to Progress

The word profit comes from the Latin proficere and profectus, meaning to advance or to progress.

Originally, profit was not about extraction. It was about contribution.

It signified movement forward—creating something better than what existed before.

Yet modern capitalism often treats profit as detached from progress. It measures success purely through financial surplus, regardless of how that surplus is generated.

This has led to a dangerous distortion.

Many companies today generate profits not by solving problems but by shifting costs onto others:

• Onto customers through misleading practices

• Onto employees through unsafe conditions or suppressed wages

• Onto communities through pollution or infrastructure strain

• Onto governments through tax avoidance

• Onto future generations through environmental damage

These profits are technically legal. They are often reported as “successful” performance. But they are not earned through value creation—they arise from value transfer.

In essence, they represent private gain built on public or social loss.

A more honest conception of profit would recognise this difference.

True profit should emerge from creating solutions, not from exploiting vulnerabilities.

This idea can be summarised simply:

> Companies should be free to earn profits—but not by causing harm to others.

This is not radical. It is minimal.

It does not require businesses to become charities.

It does not demand that corporations solve all social problems.

It does not force directors to prioritise stakeholders over shareholders.

It asks only one thing:

Do not profit from damage.

Companies should incur the real costs of preventing harm. Where harm occurs, they should repair it. Their financial statements should reflect those true costs. Only what remains after honest accounting should be considered legitimate profit.

These are not “social” profits. They are fair profits—earned from contribution rather than extraction.

Why CSR and ESG Are Not Enough

CSR and ESG frameworks were created to address the visible shortcomings of traditional profit-centred capitalism.

They encourage companies to reduce emissions, improve labour practices, diversify boards and report sustainability metrics.

While well-intentioned, these approaches treat responsibility as something separate from profit—an additional obligation layered on top of business strategy.

This separation creates three problems:

1. Responsibility becomes optional – vulnerable to budget cuts and leadership changes.

2. Ethics becomes performative – optimised for reports and marketing rather than substance.

3. Core incentives remain unchanged – profit is still rewarded even when it is generated through harm.

In contrast, aligning profit itself with problem-solving changes the system at its foundation.

When companies can only profit by creating value without damage, responsibility is no longer an external constraint. It becomes internal to the business model.

No extra framework is required.

No moral lecture is needed.

No political ideology is imposed.

Only honest accounting.

The Myth of Markets as Moral Correctives

For years, economists argued that markets and competition naturally reward good behaviour. Companies that harm others would lose customers, employees and reputation. Ethical firms would rise. Unethical ones would fall.

Reality tells a different story.

In practice:

• Firms that cut corners often underprice ethical competitors.

• Polluters outperform responsible manufacturers.

• Exploitative platforms scale faster than fair ones.

• Regulatory compliance becomes a competitive disadvantage rather than a badge of trust.

Instead of a race to the top, competition often becomes a race to the bottom.

This dynamic mirrors Gresham’s Law in economics: bad money drives out good.

In markets, harmful business models frequently drive out ethical ones—because they operate at lower apparent cost by offloading damage onto society.

Regulation attempts to correct this imbalance but regulation is slow, complex and susceptible to capture. Bad firms innovate around it. Good firms absorb the cost.

The root problem is not insufficient regulation.

It is the false assumption that profit automatically reflects value creation.

When profit rewards harm, markets malfunction.

Corporate Purpose: The Missing Anchor

Corporate law already contains the concept needed to resolve this tension: purpose.

Every company is formed for a reason. It exists to do something—to build, provide, solve, connect, innovate or deliver.

Success, logically, should mean progress toward that purpose.

Strategy should serve that purpose.

Resources should support it.

Incentives should reinforce it.

Measurements should reflect it.

But there is a second dimension.

Success is not only about what a company achieves—it is also about what it avoids creating.

A pharmaceutical company that cures disease but hides side effects.

A bank that expands credit but fuels systemic risk.

A technology firm that connects people but destabilises democracies.

Solving one problem while creating another is not success. It is displacement.

True corporate success arises when businesses:

• Solve meaningful problems

• Avoid generating new harms

• Earn profits from genuine value creation

• Reflect true costs in their accounts

This reframes strategy itself.

Corporate strategy becomes not merely a plan to dominate markets but a system for:

• Identifying real problems

• Allocating resources to solve them

• Preventing negative spillovers

• Measuring honest outcomes

Directors’ Duties and the Ethics of Accounting

Corporate law grants directors enormous power. With that power comes fiduciary duty.

Among their most important responsibilities is approving financial statements declared to be “true and fair.”

Those words matter.

“True” does not merely mean compliant with technical standards.

“Fair” does not merely mean profitable for shareholders.

It means the accounts honestly reflect:

• The costs incurred

• The risks created

• The damages avoided or repaired

• The real economic impact of operations

If profits are generated by ignoring environmental damage, exploiting labour or shifting risks onto society, then the accounts are neither true nor fair.

They are incomplete.

They disguise transfer as creation.

Directors therefore carry a moral and legal obligation—not to pursue maximum profits but to ensure profits arise from legitimate progress.

This is not idealism. It is integrity.

Aligning Investors, Business and Society

One of the most powerful consequences of this framework is that it aligns interests that are usually portrayed as conflicting.

Under traditional capitalism:

• Investors want returns

• Businesses want growth

• Regulators want restraint

• Communities want protection

• Workers want dignity

These goals appear to compete.

Under honest-profit capitalism:

• Investors profit from real value creation

• Businesses grow by solving problems

• Communities benefit from reduced harm

• Workers gain safer, more stable employment

• Governments spend less correcting damage

Profit becomes a shared outcome of progress, not a private reward for social cost.

This creates a natural partnership between:

• The private sector, which innovates and executes

• The public sector, which safeguards collective welfare

Not through political control but through aligned incentives.

corporate success in law: What Changes in 2025?

In legal and governance terms, redefining corporate success requires transformation across several dimensions:

1. Ownership structures

Long-term orientated shareholders, mission-aligned investors and patient capital gain relevance.

2. Governance systems

Boards must oversee not only financial performance but the sources of that performance.

3. Leadership models

Executives become stewards of value creation, not merely profit extraction.

4. Measurement and reporting

Financial reporting expands to reflect true costs, risk exposure and impact.

5. Financing mechanisms

Capital flows toward enterprises whose profits are resilient because they are ethically grounded.

These changes are already emerging:

• Impact-linked bonds

• Sustainability-adjusted accounting models

• Integrated reporting standards

• Benefit corporations and purpose-driven charters

• Long-term incentive redesign

But the unifying principle must be embedded in corporate law itself:

> Success equals progress toward purpose without harm.

A New Definition of Corporate Success

In 2025, corporate success can no longer be measured only in earnings per share.

It must be defined as:

• Advancement toward a meaningful purpose

• Creation of value rather than transfer of cost

• Profit earned without exploitation

• Growth without damage

• Strategy without deception

• Accounting without omission

This is not anti-capitalist.

It is capitalism made honest.

Profit remains central—the engine of innovation, investment and risk-taking. But it becomes a reward for contribution, not for concealment.

Conclusion: From Legal Fiction to Economic Integrity

For too long, corporate law has relied on vague language about “success” while allowing profit to define itself.

That ambiguity has enabled extraordinary innovation—but also extraordinary harm.

As businesses become more powerful than many governments, clarity is no longer optional.

Corporate success must be grounded in:

• Purpose

• Strategy

• Integrity

• And fair profit

Only then can capitalism retain its legitimacy in a world facing climate uncertainty, social fragmentation, technological disruption and political volatility.

The future of business does not lie in choosing between profit and responsibility.

It lies in recognising that true profit is responsibility—measured, accounted for and earned through progress rather than pain.

If corporate law embraces this definition, then success will finally mean what it should have meant all along:

Not getting richer by leaving others poorer.

But moving forward together.

Our Directors’ Institute - World Council of Directors can help you accelerate your board journey by training you on your roles and responsibilities to be carried out efficiently, helping you make a significant contribution to the board and raise corporate governance standards within the organisation.