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29 Apr 2022

The Better Business Act Calls For Purpose-Led Company Directors

Pippy Stephenson

On the 20th April, a coalition of over 1000 businesses including The Body Shop, Innocent Drinks and Anglian Water, converged on Westminster for ‘Better Business Day’. They were calling for the introduction of the Better Business Act (BBA), to amend Section 172 of the Companies Act. This would put people and the planet equal to company profit. The campaign has the support of the Confederation of British Industry and the Institute of Directors.

Dr Roger Barker from the Institute of Directors, told the Evening Standard

“The Better Business Act is both reflective of what many companies are already doing and the expectations that modern society has for business.”

The group behind the BBA take the actions of P&O, who fired 800 staff with no notice and replaced them with lower paid agency employees, as a key example of the business practices they’d like to put a stop to. Although P&O have already admitted that they broke the law. 

What would the Better Business Act change? 

The BBA will change the wording of the Companies Act. Where it currently reads “a director of a company must act in the way he considers, in good faith, would be most likely to promote the success of the company” they propose it should say, “advance the purpose of a company” instead. The word “success” was thought to imply the pursuit of profit and financial success above all other priorities. Although it does not explicitly say that profit is more important than people and the environment, the absence of clarity accounts for a general disregard of their importance. 

The proposed act has been published on the campaign website. It will ask for four principles to be prioritised; aligned interests, empowered directors, default status and reporting changes. This means, the interests of shareholders will be aligned with those of wider society and the environment. Directors will be empowered to weigh up these interests. This will be enacted in all businesses; it would no longer be optional. And finally, businesses will be required to report how they balance the interests of people, the planet and profit. 

Who’s involved? 

The BBA was initiated by B Lab UK, the non-profit that established and awards B Corp Certification. They set standards of social and environmental responsibility and award companies B Corp status if they perform to those standards. Notable B Corps are Ben & Jerry’s, Ecosia and Patagonia. 

In March, Mary Portas was appointed co-chair of the BBA, she said, 

“I believe business can be a force for good in society. British entrepreneurs and businesses are the backbone of our communities up and down the country and many are responsible businesses that look after their staff, give back to the communities that support them, and reduce their environmental footprint.

These businesses deserve the certainty and support in law that would level the playing field for responsible decision-making. But as things stand, the Companies Act still allows some companies to pursue profits at the expense of people and the planet.”


One of our partners, betternotstop, a sustainability impact agency, has joined the coalition to support the Better Business Act. They help purpose-driven businesses to implement strategies, policies and frameworks like the United Nations Sustainable Development Goals, B Corp Certification and Carbon Literacy to increase their revenue, customer base and employee retention.

Their press release announcing their support of the BBA says, 

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


“We have joined this campaign because we believe the world needs every business at its best – creating good jobs, helping to fix pressing problems and adding value to society.”

While the BBA would clarify the standards to which businesses are expected to perform for wider society and the planet, there are still no specific mechanisms in place to hold businesses to account or to measure the quality of their social impact activities. B Corp certification is most similar to such a thing however it is totally voluntary. 


In light of research that found 66% of millennials and Gen Z think the clear social purpose of a company is an important factor when looking for a job, along with the general trend towards ethical investments and business practices, companies are realising that whether it’s laid out in the law or not, they need to become sustainable to survive. 

A poll by B Lab UK found that 72% of people think that business should have a legal responsibility to the environment and people. The BBA would be a step in this direction. 

But is it going far enough? It is an exciting development to see a large coalition of companies coming together to call for purpose-led business. It is exciting that if this legislation passes it will be more difficult for bosses to behave as those at P&O did, but in a way, isn’t it the bare minimum we should expect? 

In fact the BBA have said that themselves. Executive Director of B Lab UK, Chris Turner told Forbes

“what we need now is for stakeholder governance — our aligned interest — to not be an option anymore. It needs to be the default; it needs to be the minimum expectation that we have of business.”

Reset Connect London, 28-29 June, will bring together industry leaders, investors and innovative start ups to speed the transition to net zero. The cooperation of business and the establishment of a green economy is an essential part of a sustainable future. Get a ticket to be part of this change.