Join the Better Business Act

Did you know that in the 2006 Companies Act, the law that governs how businesses should act, it’s only OPTIONAL for the company’s directors, owners and shareholders to consider the impact of their actions and decisions on the future.

 

The Better Business Act is a coalition of over 750 business who seek to amend Section 172 of the present 2006 act. If the act is successfully amended, businesses will be legally obligated to operate in a manner that benefits their wider stakeholders, while also seeking to deliver profits for shareholders.

Wider stakeholders include workers, customers, communities and the environment.

 

Presently, the only legal obligation is to act exclusively in the interests of the shareholders and to use their best endeavours to deliver profits. Social and environmental impacts are not even secondary, because they aren’t mandatory considerations.

 

That’s not right! 

 

The Better Business Act will transform the way we do business, so that every company in the UK takes ownership of its social and environmental impact.

 

The climate emergency and social inequality are profound and pressing problems, thrown into sharp relief by the COVID crisis. These problems can only be solved if we harness the enormous potential of entrepreneurs, innovation and enterprise.

 

The best way to do this is to change the law that governs how businesses act. It can no longer be optional for companies to consider their impact on the wider world.

 

At Asociat, our published mission is to show how business can create positive long-term societal change, while also meeting  commercial aims and shareholder obligations.

 

We believe the former does not have to be compromised by the latter.

 

At Asociat, we are working towards a goal in which businesses and communities can combine forces to-create a fairer, kinder, cleaner world.

 

Which is why we’re proud to support the Better Business Act

 

Hundreds of businesses have already signed up to create a cleaner, greener, fairer future for all. Together, we will ask for the government’s leadership to help deliver this new contract between business and society.

Join us, act now. www.betterbusinessact.org

#BetterBusinessAct

 

How will the Better Business Act change behaviour

  • Subsection 172(1) Companies Act 2006 allows directors to consider other stakeholders when making decisions. BUT...
  • This can only be in the course of pursuing the success of the company for the benefit of the shareholders; this is the default position of “shareholder primacy” for all companies.
  • The BBA would change the default position for all companies so that directors would be empowered to advance the interests of their shareholders alongside those of wider society and the environment.
  • 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.
  • This will change the nature of conversations in the boardroom, allowing for a more holistic approach to the challenges faced by the company’s directors.
  • For many businesses this will be a formalisation of current behaviour, and would support the current intentions of many businesses to take ownership of their social and environmental impacts.

Other posts you may be interested in...

Emmanuel Faber image

People are craving change. They expect large organizations like Danone to bring our scale of impact to change the world for the better.

Emmanuel Faber CEO, Danone
Excerpt from image

The high expectations of business to address and solve today’s challenges has never been more apparent. The heightened expectations of business bring CEOs new demands to focus on societal engagement with the same rigour, thoughtfulness, and energy used to deliver on profits.

Excerpt from Edelman, Trust Barometer 2021
Tanya Joseph – creator of Sport England’s This Girl Can campaign image

Purpose will be central to rebuilding brands in the society that is emerging after the pandemic. The businesses that will not just survive, but thrive, over the coming months and years will be those whose leaders embrace the notion that there is no merit in profit without purpose.

Tanya Joseph – creator of Sport England’s This Girl Can campaign Columnist, Marketing Week

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