Facebook’s recent IPO, with its shares initially priced at $38, put the company’s total valuation at about $100 billion, a value representing about one-fifth of that of the world’s most valuable company, Apple.  At that price (which it no longer trades at), the company would also be worth about three times more than LinkedIn, Twitter, Groupon, Yelp and Zynga combined.

The high expectations for future profits that this valuation demonstrates brings up one of the most fundamental questions about Facebook as a public company, and one that founder Mark Zuckerberg chose to address in a letter to investors in Facebook’s S-1 prospectus earlier this year.

“Facebook was not originally created to be a company. It was built to accomplish a social mission — to make the world more open and connected.”

This statement, tellingly the very first sentence of the letter, is seemingly at odds with the inherent responsibility of a publicly traded company’s management, which is unambiguously and categorically to maximize value for its shareholders. An investor reading this would expect, and hope, that Zuckerberg might go on to describe how Facebook’s direction and purpose would now fundamentally change as a public company to benefit stockholders. Unsurprisingly, this is not what Zuckerberg did.

He went on to write instead:

“Simply put: we don’t build services to make money; we make money to build better services.”

The conflict between serving the greater social good and maximizing profits is anything but a new topic in business.  Many companies profess to wanting to make the world a better place while serving shareholders. Some, like Howard Schultz of Starbucks, claim that the most effective and sustainable way to profit and grow is actually by being a socially responsible and conscientious actor.

But Facebook appears to be a unique test case for this issue, both because of its size and the level of commitment and zeal that Zuckerberg has continually demonstrated for his personal agenda.

Since Zuckerberg controls 57% of the voting shares of the company, he is essentially free to pursue this agenda for as long as he wants. Nevertheless, investors will be looking at the bottom line, which may or may not please.

It is wholly possible that Zuckerberg’s way of conducting business, putting the product and mission as the end rather than the means, might actually prove to be the best way to maximize profits in the long run.  If this is the case, the conflict ceases to exist and investors need not worry.

But if this ideal proves not to be as successful in reality as promised, his vision for Facebook might have to change.

Still, there is an alternative solution, a middle ground which Zuckerberg seemed to be attempting to create in writing this letter to prospective investors.

That is, by explicitly declaring that Facebook is as much a social enterprise as a business before taking the company public, Zuckerberg has essentially gained the implicit agreement of potential shareholders.  In other words, as long as investors have fair warning and agree to the fact that they might have to sacrifice some level of potential profit in order to share a piece of an incredible company, there is no true conflict of interest.

“We think it’s important that everyone who invests in Facebook understands what this mission means to us, how we make decisions and why we do the things we do.” 

As Facebook continues to deal with the growing pains of becoming a public company, its management would be wise to continually reiterate and reinforce this message, lest investors with short memory forget the informal covenant outlined by Zuckerberg.

This strategy can and should mark a turning point for a longstanding problem: the tension between doing what serves the social good and what maximizes profits. Rather than buying the traditional (cop out) answer that what is good for society must also be good for profit, the Zuckerberg approach aims to create a new standard in business ethics.

Companies that believe they have a mission above and beyond being a company should take note.