We’re supporting the Better Business Act, will you?

3rd May by Karen Smart

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Wednesday the 20thApril was Better Business Day and I was delighted to be representing the AoEC at what was an important date for organisations seeking positive change.

Led by the ethical business entity B Lab - the brand behind the much coveted B Corp status - the event at Parliament was a pivotal campaigning moment for the Better Business Act ahead of the Queen’s Speech on 10th May this year. I was one of nearly two hundred supporters in Westminster who were there to meet their MP and call for a change to the existing Companies Act so that every company in the UK helps to create a cleaner, greener, fairer future for everyone.

The Better Business Act is seeking to replace Section 172 of the Companies Act 2006 which  sets out that the purpose of organisations is to benefit their shareholders. The hope is to change this to have purpose that gives parity to climate, environment and social impact alongside the requirement to make profits for shareholders.

The future of business must look different and that is why the AoEC has joined the 1,000 plus businesses who are supporting the appeal for people, planet and purpose to be of equal weight to profit.

Change will not just come about as a result of corporate scandals playing out in the news. Reports of corporate bullying, greenwashing and errors of judgement rewarded with golden goodbyes are damaging and eroding the public’s trust in institutions. Reform has to be proactive and it has to come from an appetite for change as well as, in government speak, the need to build back better as we emerge from Covid.

Organisations, large and small, share the responsibility to be good corporate citizens. The proposed legislative changes contained within the Better Business Act will go some distance in enabling corporates to be more a attractive proposition for employees, customers and investors, whilst helping the country’s economy recover too.

It is not just leadership that is changing, it is the way we conduct business that has to move with the times too. That tough alpha male, aggressive and competitive style of leadership is widely accepted to be redundant and the same needs to be said for the way we approach business with a move away from capitalism which is designed to deliver fat cat profits and monopolising growth.

We have seen with the Covid pandemic that how we work is on a new footing and this is a powerful opportunity for businesses of all shapes and sizes to get involved and make a real difference to the communities they serve. By aligning our long-term interests of people, planet and profit, we can flourish in ways that will ensure prosperity is shared with the wider pool of stakeholders who really do matter when it comes to ensuring the ongoing success and growth of any organisation.

The Better Business Act gives us firepower to make meaningful and significant change in how business is done within the UK economy and the global market. Investors, employees and customers alike are already demanding higher ethical and environmental standards from the companies they engage with. Organisations have an impact on every facet of life and the obligation is now to balance responsibility and accountability for the needs of our planet, people and society together with those which are commercial.

If you want to operate at the highest levels and achieve the best for your people, then act now and join us in driving change by pledging your support here.