Which of the following best describes a mission statement?

A mission statement is fundamentally a philosophy outlining what an organization aims to do and its guiding principles. It serves as a foundational element that defines the organization's purpose, direction, and values. By articulating the core purpose of the organization, the mission statement communicates to stakeholders—including employees, customers, and investors—what the organization stands for and its overarching goals.

This is essential for aligning the efforts of all members of the organization towards a common vision and ensuring that decision-making is coherent with the organization's core values. A strong mission statement helps to inspire and motivate employees, guiding their actions and decisions within the context of the organization's purpose.

In contrast, the other options do not capture the essence of a mission statement. An annual plan of action focuses on specific objectives and timelines rather than the overarching purpose of the organization. A summary of financial performance pertains to the financial health of the organization, while a statement of organizational policies outlines rules and guidelines rather than expressing the mission or main objectives of the organization. Thus, the descriptor that aligns best with the purpose and function of a mission statement is indeed the one highlighting its role in articulating an organization's philosophy and guiding principles.