Redefining Communications has recently signed up to support the Better Business Act, which calls for every company in the UK to align the interest of their shareholders with those of wider society and environment.
It was launched in Westminster in April 2021, with business leaders, coalition supporters, MPs and peers campaigning to change the law. If successful, it will result in an amendment of Section 172 of the Companies Act:
“In situations where a director has to choose between the company’s intention to create positive social or environmental impacts and the interests of shareholders, the directors would no longer be compelled to default to prioritising shareholders.”
Better Business Act
The campaign has been brought about by a failure to align company or shareholder interests with employees, customers, communities and the environment. Three-quarters of the UK public believe businesses have a responsibility to protect the environment and the majority favour brands that do good in the world. The Better Business Act campaign calls for all businesses to be legally responsible for their impact. Over 600 companies have signed up, including John Lewis, Oliver Bonas, Iceland, the Institute of Directors and Redefining Communications!
The part of the campaign that struck a chord with me is around giving equal weight to stakeholders and removing the focus to solely to serve shareholders. In fact, I believe that until shareholders care about employee engagement, we will continue to struggle to build trust:
“I still think that until shareholders and the city hold CEOs to account on how they engage with the workforce and appreciate the impact it has on the bottom line, we are still climbing a very steep hill.”
I believe everybody responsible for running a business – big or small – should consider their impact. I’m sure many companies are already operating in this way; however, the Better Business Act would make it a legal obligation to transform the way all companies do business. It’s an approach that’s already been implemented in 40 US states as well as Italy, Colombia and Canada.
In my book, I talk about purpose-led and purposeful companies and share the example of Patagonia and TOMS. Both these companies have a clear purpose that flows through their culture and communication; it isn’t necessarily all about profit. I think it’s vital we take specific actions to improve our world for all stakeholders, rebalance the focus so it’s not all about shareholders, and acknowledge the role business plays.
If you’d like to support, you can find out more on the Better Business Act website. The campaign concept and strategy were initiated by B Lab UK, a non-profit established in 2015 to serve a community of 500 UK-based companies — Certified B Corporations — using business as a force for good.
