Bills for a Business‑Friendly Future: Directors Must Now Think About the Planet, People and Their Profits
In a move that could reshape how UK companies decide what matters, the Company Directors (Duties) Bill was unveiled in the House of Commons this morning. The bill wants to tinker with Section 172 of the Companies Act 2006 so that boardrooms no longer behave like a one‑dimensional share‑holder havens.
What the Current Law Says… and Why It’s Failing
Right now, Section 172 tells directors to act in ways that “most likely” promote the company’s success “for the benefit of its members as a whole.” In effect, shareholders get the top seat on the table while employees, customers, local communities and the planet are just background scenery.
Recent corporate scandals—think water‑handling firms blowing the whistle on environmental mishaps—highlight the gap between quick cash wins and long‑term sustainability.
What the Bill Proposes (and Why It Matters)
- Balance‑sheet re‑balance: Directors will now be required to weigh shareholders against employees, customers, communities and the environment.
- Annual transparency: Companies must publish how they’re meeting these extended duties, bringing the “green” and “good‑people” metrics into mainstream reporting.
- Safeguards for the planet and society: New legal checks will help protect ecological and social interests as part of company governance.
Short of “profit-only” boards, this could be the turning point that turns UK companies into real champions of the planet and their people.
The Evidence That This Works (and It Even Boosts the Bottom Line)
Think that sticking to the old model might still carry you forward? Think again. Studies by B Lab UK show:
- UK B‑Corps outperformed ordinary firms in 2023‑24, with a 23.2% turnover rise versus the national average of 16.8%.
- B‑Corp companies also saw a 9.6% jump in employee headcount, while the national trend dipped by 0.5%.
- The Purpose Dividend report (Demos, Good Business Act) estimates a purpose‑driven economy could lift UK GDP by £149 billion a year.
In short, when companies genuinely balance profit with purpose, everybody wins.
Who’s Championing This?
Lawmakers, businesses and the public have a standing ovation for the movement, led by:
- Martin Wrigley (Liberal Democrat MP, Newton Abbott) – “We need a framework that lets profit thrive while ensuring sustainability is embedded in every decision.”
- Chris Turner (CEO, B Lab UK) – “B Corps already prove the business case for stakeholder‑centric leadership. This Bill will elevate that from the exception to the norm.”
And it’s not just a handful of companies. Over 3,000 businesses—from tech giants like Virgin Group to chocolate champion Tony’s Chocolonely—are fighting for a business worth backing, together with NGOs like the RSPB and the Institute of Directors.
In Summary: A Bill That Could Put the UK on the Map as the World’s Most Forward‑Looking Business Community
With cross‑party support and dozens of MPs in the House, the bill has a real shot at becoming law next Friday, 4 July. Whether you’re a seasoned boardroom veteran or a startup hopeful, it’s time to realise that today’s business risk is not just financial—it’s ecological and social. Let’s commit to a future where companies thrive on purpose, people and planet alike.
