Why organisations fail to work for the public good

The Economist reviews For Profit by William Magnuson: 

[Mr Magnuson]draws sensible conclusions .... Corporations cannot hope to put public interest above all else for long; what the public wants is far too complicated for them to fathom. When businesses wade into politics, they play an outsize role in shaping it. Yet the belief that the pursuit of profit will always benefit society as a whole is also sadly erroneous, the author says.“For Profit” offers thrilling tales of commercial endeavour:Corporations often start out with the public good in mind. It doesn’t last, the 'Economist', 10 November

The same, in my view, applies to organisations whose mission statements explicitly say they will put aspects of the public interest first, including charities, universities, religious bodies, trade unions and government agencies. At some point their original purpose becomes subordinated to the goal of self-perpetuation. As organisations grow in size, ownership or governance becomes more diffuse, and society becomes more complex, there are fewer incentives for managers to stick to their organisation's founding remit. 

Which is why I believe that, when it comes to social and environmental policy, the way forward is to reward only the actual achievement of explicit, verifiable and meaningful social outcomes. Issuing Social Policy Bonds would do that and would be likely to lead to the creation of a new type of organisation: ones whose structure, composition and every activity would be subordinated to achieving society's targeted social goals as cost-effectively as possible.