Empower has officially joined the Better Business Act and are now active ‘ambassadors’ of the coalition. This means we’re now part of a very important mission: to change UK law to ensure that every company here – whether big or small – puts balancing people, profit and planet at the heart of their purpose and the responsibility of their directors.
What is the Better Business Act?
The Better Business Act is a simple legislative solution: By amending Section 172 of the Companies Act we can use existing legal principles to empower directors to consider all stakeholders. The BBA is about transforming the way we do business so that every single company in the UK takes ownership of its social and environmental impact.
Together, we’re taking a straightforward ask to government: change Section 172 of the Companies Act to ensure that company directors are responsible for advancing the interests of shareholders alongside those of wider society and the environment.
The COVID crisis, the climate emergency and social inequality are profound and pressing problems that can only be solved if we harness the enormous potential of entrepreneurs, innovation and enterprise. UK voters and consumers want business to do better: research shows that three-quarters of the public think business has a responsibility to protect the environment and the majority favour brands that do good in the world.
The BBA coalition currently consists of over 800 businesses. The campaign concept and strategy were initiated by B Lab UK, which acts as Secretariat to the coalition. B Lab UK is a non-profit established in 2015 to serve a growing community of 500 UK-based companies – Certified B Corporations – using business as a force for good. Certified B Corporations, such as Empower, are businesses that meet the highest standards of verified social and environmental performance, public transparency, and legal accountability to balance profit and purpose.
Why is the Better Business Act needed?
The Better Business Act would amend Section 172 of the Companies Act 2006 so that companies are legally obligated to operate in a manner that benefits their stakeholders, including workers, customers, communities and the environment, while seeking to deliver profits for shareholders.
For the past half-century, business has become separated from the communities it needs to serve. The relentless pursuit of profit at all costs has contributed to a set of enormous challenges that threaten peoples’ health, wealth and the natural world. The Better Business Act will transform the way we do business. This means freeing decision-makers in business to act in everyone’s long term interests – combining traditions of good stewardship and responsibility with new ideas to meet the challenges of the 21st century.
And 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 future.
How will businesses need to change to answer the duties of the Better Business Act?
The BBA would require that businesses advance the interests of shareholders alongside those of wider society and the environment. 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.
Under the changes proposed by the BBA, a board of directors would not lose their commercial rigour or interest in commercial success, otherwise they would flounder and potentially fail. A board would retain its focus on commercial success, while enriching strategy through a more holistic consideration of stakeholder issues.
Transforming the way we do business
Empower joined the Better Business Act coalition because we believe the world needs every business at its best: creating good jobs, helping to fix pressing problems and adding value to society. This aligns with our company’s stated mission and values.
We are encouraged by the fact that the Better Business Act is a business-led campaign, driven by leaders who recognise that the law has fallen behind business culture and who have proven that the BBA’s approach to business works for everyone.
We believe that the Better Business Act is a unique opportunity to demonstrate UK leadership on the global stage: creating a competitive advantage, driving innovation, accelerating progress to net zero, and aligning with the government’s ambition to build back better.
The world needs business at its best and we’re thrilled to be part of the BBA coalition’s mission to change UK law and deliver a new contract between business and society.
For more information, visit betterbusinessact.org