Home Business News Survey highlights appetite for new definition of corporate purpose among UK businesses

Survey highlights appetite for new definition of corporate purpose among UK businesses

by LLB staff reporter
15th Oct 20 8:12 am

A new survey carried out by YouGov for the British Academy’s Future of the Corporation programme reveals that many business leaders support steps to promote purpose in business.

Of those surveyed, 44% agreed with the British Academy’s definition that the purpose of business was to “find profitable solutions to the problems of people and planet, not to profit from creating problems for either”. The same proportion, 44%, believe that the purpose of business is to maximise returns for shareholders within the confines of the law.

Just 15% of the senior decision makers in business agreed that the current legal and regulatory environment business served society’s – rather than shareholders’ – interests.

Almost two-thirds (63%) of those surveyed reported taking steps to make their own businesses more purposeful, including reviewing culture and values (32%), improving non-financial reporting on impacts of the business on people and planet (23%) and working with Boards to revise purpose statements (20%).

Asked which methods they thought were the most important in helping to develop ‘purposeful businesses’ in the UK:

  • 55% supported the Government creating incentives to encourage change (such as lowering company tax on those who pursue a social purpose)
  • Two in five (40%) said the UK Government changing company law and regulations
  • A similar proportion (38%) said leadership from business itself, to develop new ways of operating (e.g. new board structures, purpose statements, culture change)

The Future of the Corporation programme proposed a new definition for corporate purpose and a framework for implementing it in Principles for Purposeful Business in 2019. In the year since, the British Academy has heard from influential organisations, experts and business leaders – including the World Economic Forum, former Bank of England Governor Mark Carney and Microsoft CEO Satya Nadella – calling for wider adoption of this purposeful approach to business. Today’s survey gives a clear indication of the support for purposeful, problem-solving approach to corporate purpose among a cross-section of businesses of all sizes, in every sector.

Now, calls are growing for policymakers to match businesses’ leadership. In the coming months, the Future of the Corporation programme will convene leading figures to explore how its proposed principles can be implemented through changes to public policy and business education.

Professor Colin Mayer FBA, Academic Lead of the British Academy’s Future of the Corporation Programme, said, “Despite the crises we face, businesses of all sizes are routinely engaged with the energetic debate over purposeful business. Questions over corporate purpose relate directly to businesses’ own concerns – namely, how they can solve problems of people and planet, and whether the wider business environment supports or impedes them in doing so.

“Many businesses are looking to change within the wider legal and regulatory environment to help them better achieve their purpose. By promoting a greater diversity of corporate purposes, such reforms could bridge the divide in opinion between those businesses who solely focus on financial goals and those who favour purpose, while creating benefits for wider society.”

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