TOMS: A Model of Conscious Capitalism
Introduction
The traditional shareholder model centers on maximizing financial returns for owners and
investors, often prioritizing short-term profits over the broader impacts on society and the
environment (Freeman, 1984). Companies operating under this model may neglect the interests
of other groups affected by business decisions, such as employees, customers, communities, and
suppliers.
Conversely, the stakeholder model recognizes that businesses operate within an interconnected
ecosystem of multiple stakeholders, each with legitimate interests that contribute to sustainable
success (Freeman, 1984). This approach emphasizes ethical responsibility and long-term value
creation for all parties impacted by the company’s operations.
Conscious capitalism is a stakeholder model that emphasizes operating with a higher purpose
beyond profit, aiming to create value for all stakeholders, including employees, customers,
communities, suppliers, and shareholders. TOMS, a footwear company, is a pioneer of conscious
capitalism, scoring 76.7 points over the requirement for B Corp Certification, recognizing
organizations around the world for their social impact. TOMS has increased its score each year,
demonstrating its commitment to conscious capitalism. The authors (Sisodia, Henry, &
Eckschmidt, 2018) define conscious capitalism through four foundational pillars: higher purpose,
stakeholder orientation, conscious leadership, and conscious culture. TOMS embodies all these
pillars in its operations.
Higher Purpose
Higher Purpose: From its inception, TOMS’ purpose has been to improve lives globally through
business. TOMS' purpose was established by the story of Founder Blake Mycoskie. While
traveling to Argentina, he observed that many children lacked access to necessities, including
shoes. In response, he created TOMS as a socially responsible footwear company built on the
One-for-One model: for every pair of shoes purchased, the company would donate a pair to
someone in need. This approach integrated philanthropy directly into the business model, making
social impact a core element of TOMS’ identity. Over time, TOMS expanded its mission to
address additional social causes such as clean water and mental health awareness, embedding
social good at the core of its brand identity.
Stakeholders
TOMS values its relationships with a broad range of stakeholders, including suppliers,
employees, customers, and the environment. The company maintains ethical sourcing practices,
ensuring that suppliers uphold fair labor conditions and environmentally sustainable standards
(TOMS, 2024). For example, 50% of the materials for its shoes and packaging are sourced from
partners holding recognized social or environmental certifications.
TOMS also invests significantly in its workforce by promoting diversity, equity, and inclusion,
while offering competitive benefits and opportunities for career growth. TOMS' impact statement
reported 90% of employees expressing satisfaction with their work environment, an indicator of
a strong, mission-aligned culture.
While the fashion industry is often criticized for its environmental impact, TOMS aims to be a
responsible steward for the planet. Approximately 75% of the materials used in its footwear
come from recycled or repurposed sources. This commitment to sustainability helps minimize
the company’s ecological footprint.
In addition to its ethical and environmental focus, TOMS remains attentive to consumer
preferences by offering stylish, trend-conscious products. Customers not only purchase shoes
that reflect their style but also take pride in supporting a brand with a higher social purpose. This
holistic commitment to all stakeholders reinforces TOMS’ identity as a socially responsible and
purpose-driven business.
Conscious Culture
The culture at TOMS is a reflection of conscious capitalism values, emphasizing transparency,
social responsibility, and employee well-being. Team members are encouraged to connect with
the company’s higher purpose in and out of work. An astonishing 75% of employees utilized
paid time off to participate in volunteer opportunities, demonstrating the company’s strong
commitment to service.
TOMS also fosters an inclusive and supportive workplace that promotes work-life balance and
personal growth. Employees have access to a variety of wellness resources, including classes on
exercise, mental health, parenting, and nutrition, reinforcing the company’s holistic approach to
well-being.
Transparency is a core aspect of TOMS’ culture. The company publishes an annual impact report
detailing its progress and performance metrics tied to social impact. By publicly sharing this
data, TOMS holds itself accountable to its stakeholders and reinforces its commitment to
purpose-driven business practices.
Conscious Leadership
Blake Mycoskie, the founder of TOMS, started and led TOMS to help those in need, prioritizing
purpose over profit. This approach reflects the stewardship mindset emphasized in The
Conscious Capitalism Field Guide (Sisodia, Henry, & Eckschmidt, 2018), where leaders view
their role as serving the organization’s higher purpose rather than seeking personal gain.
TOMS’ leadership further embodies conscious leadership by fostering authenticity and empathy
throughout the company’s culture. Leaders have been transparent about their business and
adaptive in their social impact strategy. For example, in addition to the one-for-one model,
TOMS donates funds to grassroots efforts in mental health, access to opportunity, and ending
gun violence. This evolution shows systems thinking and a willingness to adapt for the greater
good.
Conclusion
TOMS is an example of how a business can thrive through conscious capitalism. By centering its
operations around a higher purpose, respecting and investing in all stakeholders, cultivating a
purpose-driven and transparent culture, and demonstrating conscious leadership, TOMS proves
that profitability and social responsibility can go hand in hand.
References
Freeman, R. E. (1984). Strategic management: A stakeholder approach. Pitman.
Sisodia, R., Henry, T., & Eckschmidt, T. (2018). The conscious capitalism field guide: Tools for
transforming your organization. Harvard Business Review Press.
TOMS. (2024). About us. https://www.toms.com/about-us