ISO 37011: When Purpose Becomes Governance

For years, organisations have been encouraged to define their purpose. ISO 37011 is the first international standard designed to explain exactly what being purpose-driven actually means, and how purpose can move from words into governance, decisions and performance. For businesses in New Zealand and around the world, its emergence creates a considerable opportunity.

Purpose has spent much of the past decade suffering from an excess of enthusiasm and a shortage of discipline. Thousands of organisations have adopted purpose statements. Consultants have developed purpose propositions. Advertising agencies have turned purpose into campaigns. Annual reports have filled with increasingly expansive explanations of why companies exist and the difference they intend to make. Some of this has undoubtedly been worthwhile. But it has also created a fundamental problem. Having a purpose and being driven by one are not the same thing.

That distinction sits at the heart of ISO 37011, Purpose-driven organizations — Guidance, the emerging international standard that has now reached an important stage in its development. In September, the draft entered ISO’s formal enquiry phase, giving national standards bodies and other stakeholders around the world an opportunity to examine and comment on it before it progresses towards publication.

I have had the privilege of contributing to the international expert group involved in its development. For me, its importance lies not simply in the arrival of another ISO document, but in what it represents. Purpose is moving from the language of aspiration towards the discipline of governance. And that matters enormously.

Where ISO 37011 comes from

The story did not begin with ISO 37011. In 2021, ISO published ISO 37000, Governance of organizations — Guidance, the first international benchmark covering the governance of organisations of every type and size. Significantly, purpose sits at the heart of that standard. ISO 37000 defines organisational purpose as an organisation’s meaningful reason to exist and places it at the centre of the responsibilities of those governing an organisation.

That was an important development in itself. It shifted purpose away from marketing and communications and placed it where I have long believed it belongs; inside governance.

The next important step came in Britain with PAS 808:2022, developed by the British Standards Institute (BSI). PAS 808 provided more detailed guidance on purpose-driven organisations, including how purpose should influence decisions and behaviour, and how organisations might assess whether they genuinely operate in accordance with their stated intent. PAS 808 is now evolving onto the international stage through ISO 37011.

The new standard is being developed through ISO/TC 309, the technical committee responsible for governance of organisations. The current draft follows more than 60 international meetings over two years, three working drafts and two committee drafts, involving experts working through the painstaking consensus-building process that sits behind international standards.

That process matters because purpose has desperately needed a common language. Ask ten executives what organisational purpose means and you may still receive ten different answers. For some it is a mission. For others it is a brand promise, a values statement, a social impact programme or simply a more inspiring description of the business strategy. The consequence is predictable. If we cannot agree what purpose means, it becomes almost impossible to agree what being purpose-driven requires. ISO 37011 address that issue.

What the standard actually does

The draft provides guidance on organisational purpose and on the governance of purpose-driven organisations. It is intended for organisations of every type and size, including businesses, public-sector organisations, regulators, voluntary organisations, social enterprises, government bodies and professional associations.

Importantly, it is guidance, not a certification standard. There are no requirements against which an organisation can simply tick boxes and declare itself ISO 37011 compliant. There is no verification framework and no certificate to hang in reception. Its recommendations are expressed as things an organisation should do rather than things it must do. That is important because becoming purpose-driven is not fundamentally a compliance exercise. It is an organisational one.

The standard builds on the three central governance functions established by ISO 37000 — direction, oversight and accountability. It asks governing bodies to consider the purpose their organisation exists to fulfil, ensure that decisions and actions are aligned with it, and hold the organisation accountable for doing so.

At its core is an important proposition. A purpose-driven organisation seeks to align its decisions and actions with the long-term wellbeing of people and the planet.

For some business leaders, that language may initially sound as though commercial performance is being displaced by social ambition, but that interpretation misses the point, and here’s why:

A business that continually loses money will eventually cease to exist. Profitability, productivity, investment, innovation and growth remain essential. Capital still needs to earn an appropriate return. Employees still need to be paid. Customers still need to choose what the organisation sells. Purpose does not remove commercial reality. It simply provides a better way of organising the enterprise within it.

The performance argument

This is where my own interest in ISO 37011 becomes particularly strong. For more than 25 years, my work on Single Organizing Idea (SOI®) has been built around a relatively simple proposition — that organisations perform better when they know clearly what they exist to achieve and organise themselves around delivering it.

Not when purpose sits alongside strategy. Not when it appears as a paragraph on the website. And certainly not when it becomes the responsibility of the communications, sustainability or people team. Purpose has to drive the organisation.

When that happens, it provides a common reference point for decisions. It helps leaders determine where to invest and where not to invest. It guides innovation. It informs the products and services an organisation develops, the customers it serves, the people it recruits, the behaviours it rewards and the measures by which performance is judged.

Importantly it creates alignment. And alignment matters because organisations waste an extraordinary amount of energy through competing priorities, disconnected functions, contradictory incentives and strategies that pull different parts of the enterprise in different directions.

A clear purpose cannot magically remove those tensions. But when it becomes the organising principle around which the organisation is governed and managed, it provides a way of resolving them. Strategy becomes the means through which purpose is pursued. Culture reinforces it. Operations deliver it. Measures tell leaders whether it is being achieved.

Commercial performance and purpose therefore need not sit at opposite ends of a philosophical argument. They are actually mutually reinforcing.

A successful purpose-driven business creates the financial strength necessary to continue investing, employing people, innovating and fulfilling its purpose. In turn, clarity of purpose can create the focus, engagement, trust and strategic coherence from which stronger performance emerges. That creates enduring value for shareholders, employees, customers, suppliers, communities and the wider systems upon which the business ultimately depends.

This is where ISO 37011 makes an important contribution. It gives the international business community a common governance framework around something that has until now been interpreted far too loosely. That makes purpose harder to casually claim, but it also makes it considerably more useful.

Why Aotearoa New Zealand should pay attention

We are unlikely to compete with the largest economies through scale alone. Our advantages have always depended more heavily on ingenuity, relationships, reputation, trust and our ability to create distinctive forms of value.

Purpose-driven governance can strengthen those advantages. For an export business, clarity of purpose can help maintain coherence as the organisation enters different markets and encounters different pressures. For a fast-growing company, it can provide continuity as new people, investors and capabilities arrive. For an established organisation, it can expose areas where legacy practices no longer support what the business is trying to achieve. For boards, it introduces a more searching question than whether the organisation has a purpose statement.

Is the organisation actually being governed by its purpose?

Does purpose influence capital allocation? Strategy? Risk? Executive incentives? Innovation? Measures of success? Decisions about which opportunities to pursue and which to reject?

If the answer is no, the organisation may have declared a purpose, but it is difficult to argue that it is being driven by one. And that distinction could become increasingly important internationally as ISO 37011 creates a shared reference point against which purpose-driven claims can be understood.

For New Zealand, getting ahead of that development represents an opportunity to lead now rather than follow an obligation later. In other words, we can wait until international expectations evolve around us. Or alternatively, we can participate in shaping them and begin applying the thinking now.

From Cambridge to Auckland

Next week, Dr Victoria Hurth will be visiting New Zealand to promote ISO 37011 and discuss what the emerging standard could mean for organisations here. Her visit has a particular personal significance for me, as Victoria and I go back quite a long way.

I first met Dr Victoria Hurth around a decade ago through a purpose-focused think tank convened by Ben Kellard at the University of Cambridge Institute for Sustainability Leadership. Victoria and I were both active, and occasionally rather vocal, participants. We have been discussing, arguing about and advocating for the role of organisational purpose ever since.

Victoria went on to play a leading role in ISO 37000 and PAS 808 and done a truly amazing job as Project Leader for ISO 37011.

Next Tuesday, 27 October, she will be in Auckland for a special British New Zealand Business Association event at AUT, From purpose statements to real decisions: building a wellbeing economy. Victoria will deliver the keynote before joining me and Andrew Baker of Tika Learning for a panel discussion moderated by BNZBA Vice President Dr Victoria Hatton.

The timing could hardly be better. ISO 37011 is currently in its international enquiry period, which runs from 24 September until 17 December, although national consultation deadlines may be earlier. New Zealand participates in ISO through the New Zealand Standards Organisation, giving this country a route into the international standards process rather than simply leaving others to define the framework for us. That makes the conversation next week much more than another discussion about the merits of purpose. It’s an opportunity to consider what purpose looks like when it becomes part of the actual machinery of governance.

Beyond the statement

I have spent much of my career arguing that purpose should not be treated as an addition to the organisation. It should sit at the heart of it and that is ultimately why I believe ISO 37011 matters.

The standard will not tell leaders precisely what their organisation’s purpose should be. Nor will it remove the difficult choices, compromises and tensions involved in running a successful organisation. What it can do is establish a much clearer international understanding of what leaders mean when they claim their organisation is purpose-driven.

That raises the bar. But it also creates an opportunity. Because once purpose moves beyond the statement and begins genuinely influencing governance, strategy, investment, culture, operations and performance, it stops being another piece of corporate language. It becomes useful. And when an organisation is coherently organised around a meaningful purpose, delivering value through everything it does, I believe it becomes capable not only of contributing more to the people and systems around it, but of performing better itself. That is good for business and that is good for all stakeholders too.

The Best Places to Work Have a Purpose

Why organisational purpose matters to employee experience, and how a shared sense of direction helps create better workplaces, stronger cultures and greater performance.

Pay matters. So do good managers, flexibility, trust and the everyday experience of work. But the strongest workplaces also offer something fundamental: A clear sense of what the organisation is trying to achieve, why it matters and how each person contributes to making it happen.

So what makes somewhere a genuinely good place to work? For an employee, the answer is unlikely to begin with a corporate purpose statement. It will be much more immediate. Am I treated fairly? Do I trust my manager? Is the workload reasonable? Am I listened to? Can I do good work without fighting the organisation around me? Does the organisation keep its promises?

All of these things matter enormously. New Zealand’s Best Places to Work™ 2026 Employee Experience Survey reinforces the point. When employees were asked what mattered most to them at work, 74.6 per cent included people and culture among their three most important factors, compared with 35.4 per cent who selected compensation. Supportive managers, flexibility and being able to be themselves at work also featured strongly.

But buried within that everyday experience is another question that is easy to overlook — do I understand what this organisation is trying to achieve, and can I see how my work contributes to it? That is the meeting point where organisational purpose enters the employee experience.

Not purpose as a slogan. Not an assertion that the organisation exists to make the world a better place. And certainly not another piece of employer branding designed to persuade people that their job is more meaningful than it really is.

Purpose, properly understood, is an organisation’s meaningful reason to exist, grounded in the enduring value it creates through its performance and its contribution to the long-term wellbeing of people and the planet. In a purpose-driven organisation, that understanding becomes the organising principle for strategy, decisions, priorities, behaviour and performance.

From an employee’s perspective, this matters because work rarely happens in isolation. Every day people are asked to make choices, resolve competing priorities, collaborate with others, respond to customers and decide where to put their limited time and attention. The clearer the organising logic of the business, the easier it becomes to understand not simply what needs to be done, but why. That distinction has consequences.

A sizeable body of research has found a strong relationship between experiencing work as meaningful and outcomes including engagement, commitment and job satisfaction. A meta-analysis published in the Journal of Management Studies, covering 44 studies and more than 23,000 people, found particularly strong associations between meaningful work and all three. It also found a relationship with lower intentions to withdraw from an organisation.

Organisational purpose and meaningful work are not the same thing, and we should be wary of pretending that a carefully articulated purpose can somehow make every task inspirational. Few people arrive at work each morning requiring transcendence before opening their inbox. But purpose can create the conditions in which work makes greater sense.

It can provide line of sight between an individual job and a larger organisational endeavour. It can help managers explain decisions rather than merely announce them. It can give teams a common reference point when priorities compete. And it can make autonomy more practical because people have a clearer framework within which to exercise judgement. Most importantly, perhaps, it gives employees something against which to judge the organisation itself.

This is where purpose becomes much more demanding than the purpose statement suggests. Employees experience the gap between words and actions more closely than almost anyone else. They see which behaviours are rewarded. They know whether a stated commitment survives contact with a difficult commercial decision. They experience whether leaders listen, whether customers really matter, whether values disappear when targets are under pressure and whether the organisation behaves consistently when nobody is preparing a presentation about its culture. In that sense, employee experience is one of the toughest tests of whether an organisation is genuinely purpose driven.

A business cannot credibly claim that its purpose guides how it creates enduring value while treating the people expected to deliver that purpose simply as a cost to be managed. Equally, an organisation with a friendly culture, generous benefits and an impressive employee proposition can still leave people confused about where it is going, what really matters and how their work contributes. The two dimensions need each other.

This is also why being purpose driven should not be confused with making work easy. Some of the best workplaces are highly demanding. They expect excellent performance, make difficult decisions and ask a great deal of their people. What distinguishes them is not an absence of pressure, but greater coherence around why the effort matters, what is expected and how success is achieved.

Purpose therefore sits upstream of much of what we describe as employee experience. When it genuinely shapes strategy and behaviour, it can influence how leaders lead, how managers manage, how teams collaborate, what gets measured and rewarded, and how people understand the contribution they are being asked to make.

That connection is one of the reasons Neil Gaught & Associates has entered into partnership with Best Places to Work.

We approach the organisation from different but highly complementary directions. Best Places to Work begins with the lived experience of employees. Its awards process starts with confidential employee feedback before organisations can progress to independent assessment, deliberately testing the difference between what an organisation says about itself and what its people actually experience.

At NG&A, our starting point is the organisation’s core purpose and the work required to make it an organising principle for governance, strategy, culture, operations and performance. Both approaches ultimately come together in how purpose is translated into everyday organisational practice.

That is also why NG&A is sponsoring the Purpose in Action Award at this year’s Best Places to Work Awards. The category recognises organisations working to embed purpose into strategy, decision-making and everyday action, creating outcomes for employees as well as customers, communities and the organisation itself.

Next Thursday, 22 October, the 2026 Best Places to Work Awards will bring together organisations from across Aotearoa New Zealand that are trying to create better experiences for their people.

There will be much to celebrate. But behind the awards sits a more important idea. The best places to work are not created by perks, statements or culture programmes alone. They are created when people can see a connection between what an organisation is there to achieve, the decisions its leaders make, the work they themselves do and the value that work creates. When those things align, purpose stops being something employees are told about and becomes something they experience.

Purpose Inside the Machine
Q3 2026 Summary
 


Every quarter I look back at what I have written, read and discussed on Neil Gaught On Purpose. It is partly a chance to catch up on anything you may have missed, but it also reveals themes that were not necessarily obvious when each piece was published.

This quarter, one stands out.

Artificial intelligence did not dominate everything I wrote. Far from it. The subjects ranged from Matariki and leadership to organisational change, employee experience, corporate purpose and — surreally — René Magritte. But AI increasingly changes the context in which all those subjects sit.

In The Machine Needs a North Star, I explored what happens when AI begins to change not only how work gets done, but how organisations themselves are organised. As machines become capable of researching, analysing, recommending and increasingly acting, the question of what all that intelligence is ultimately being directed towards becomes much more important. AI can make organisations faster and more capable, but it cannot determine why they exist.

Perhaps appropriately, the quarter began with Matariki and the importance of orientation before action, and ended with the prospect of organisations increasingly populated by intelligent machines. Different worlds, perhaps, but connected by a remarkably similar question: Before we accelerate, do we know where we are going and why?

Here is what I shared during Q3.

Articles

Orientation Before Action: The Wisdom of Matariki

Matariki provided the starting point for a reflection on purpose, stewardship and the value of establishing our bearings before rushing forward.

In a business culture that prizes momentum, Matariki offers a useful reminder that movement and progress are not the same thing. Purpose provides organisations with a point of orientation against which choices about the future can be made.

The Leadership Challenge Hidden in Plain Sight

Prompted by the Oxford–GlobeScan Global Corporate Affairs Survey, I looked at the extraordinary range of pressures now competing for leadership attention.

My argument was that beneath geopolitical, technological, regulatory and social complexity lies a deeper challenge, that being organisational fragmentation. The more complicated the environment becomes, the greater the need for a common organising principle that helps leaders distinguish what matters from what merely demands attention.

This is Not a Purpose
René Magritte’s famous The Treachery of Images provided a surreal way into one of my recurring frustrations with corporate purpose.

A picture of a pipe is not a pipe. And a purpose statement is not a purpose.

Statements matter, but purpose only becomes real when it influences governance, strategy, culture, investment, innovation, behaviour and performance. The challenge is not declaring a purpose. It is becoming organised by one.

The Machine Needs a North Star
The final article of the quarter considered what organisational purpose might mean in an increasingly AI-native world.

AI can optimise against an objective but humans still have to determine which objectives matter. Which is why I firmly believe purpose will become increasingly more important in the age of AI, not less.

Book Reviews

Two very different books featured in my Beyond Rhetoric series this quarter, both concerned, in their own way, with the gap between aspiration and implementation.

Our Iceberg is Melting by John Kotter and Holger Rathgeber

I returned to Kotter and Rathgeber’s deceptively simple fable about a colony of penguins confronting enormous change.

Nearly twenty years after publication, its lessons about urgency, leadership, resistance and collective action remain remarkably relevant. Knowing that change is necessary is one thing. Getting an organisation to move together is quite another.

Higher Ground by Alison Taylor

Alison Taylor offers an intelligent and refreshingly sceptical examination of corporate purpose, ethics, values and responsibility.
I agreed with much of her diagnosis. Where I wanted more was in the how. Understanding why purpose matters, and even defining what it should mean, is only the beginning. The harder task is turning it into the way an organisation actually operates.

Conversations

I also continued my Neil Gaught On Purpose: In Conversation series with two New Zealand leaders approaching purpose and performance from very different perspectives.

In Conversation with Gavin Findlay

As Chief Executive of the New Zealand Food Network, Gavin Findlay works in an organisation with an unmistakably social purpose.

What made our conversation particularly interesting was his emphasis on performance and commercial discipline. Having a worthwhile purpose does not reduce the need to run an organisation well. It makes clarity about what good performance is ultimately for even more important.

In Conversation with Julie Gill
My conversation with Best Places to Work™ Founder and CEO Julie Gill explored employee experience, culture, leadership and the connection between better workplaces and better organisational performance.

One theme stood out: People experience purpose through what an organisation actually does. They notice whether decisions, behaviours and priorities match the words. Purpose becomes credible when it is lived rather than simply communicated.

Into Q4

The final quarter of 2026 promises to be unusually rich territory for purpose.

New Zealand’s general election will dominate the public conversation, bringing questions of leadership, trust, priorities and long-term direction sharply into focus. For NG&A, the opportunity is not to enter party politics, but to examine what organisational purpose can teach us about making choices, maintaining direction and creating value when competing pressures intensify.

October will also put purpose into practice in two very different settings. NG&A is sponsoring the Purpose In Action Spotlight Award at Best Places to Work™, providing an opportunity to recognise organisations demonstrating that purpose can influence culture and performance, rather than simply sit in corporate language.

And the British New Zealand Business Association will host From Purpose Statements to Real Decisions: Building a Wellbeing Economy an event that brings together ISO37011 leading expert Victoria Hurth, Andrew Baker and my good-self for a panel discussion, hosted by Victoria Hatton. With the international standard inching towards publication, this should provide a timely platform for discussing what purpose actually means and what governing an organisation by purpose requires in practice.

It’s going to be a busy Q4!