Better Business Act campaigners urge UK parliament to halt relentless pursuit of shareholder profits

Mass lobby of lawmakers, headed by high street champion Mary Portas, calls for law change so responsibilities of company directors will include communities, workers and the environment.

Retail guru and TV personality Mary Portas led a mass lobby of the UK parliament yesterday, calling for new legislation to prevent company directors pursuing profit at the expense of their workers, communities and the environment. More than 50 MPs showed an interest, including Labour party leader, Keir Starmer. 

The ‘Better Business Day’ action was supported by more than 1,000 businesses led by Portas as co-chair of the campaign, alongside Douglas Lamont, CEO of Innocent Drinks. Others involved included B Lab UK, Pukka Herbs, Ella’s Kitchen, Anglian Water, Iceland and the Institute of Directors.

The campaigners want the Better Business Act to be included in the Queen’s Speech on 10 May which will set out the UK government’s forthcoming legislative agenda. 

The act would amend Section 172 of the Companies Act which sets out that the default purpose of companies is to benefit their shareholders. Instead, the act would ensure that company directors were legally responsible for benefiting workers, customers, communities and the environment alongside delivering profit.

In an Instagram post yesterday, Portas explained that the campaign would be asking MPs to change “a tiny clause” in the Companies Act which would mean “businesses will not only be making profit, but they will be taking care – of the people who work with them, the people who buy from them, and our planet. And they will be thinking about how what they do as a business gives back as much as it takes.”

 

 

Luke Fletcher, partner at law firm Bates Wells and author of the Better Business Act, told Pioneers Post that he was pleased with the impact of the event. He said: "It was striking to see the openness and receptivity to the Better Business Act proposals from MPs, with Keir Starmer asking 'how can we support?' and 50-plus MPs from all sides wanting to know more about the campaign."

Chris Turner, executive director of B Lab UK and Better Business Act campaign director, said that since launching a year ago, the Better Business Act coalition had grown to include more than 1,000 businesses of all shapes and sizes and from across a huge range of industries and sectors. 

He said: “We know from our collective experience that everyone’s best interests are served when decisions in the boardroom are aligned with the long-term interests of workers, communities and the environment. That’s why we think this should be reflected in the law.”

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

Roger Barker, director of policy and corporate governance at business leaders' group the Institute of Directors, said: “The Better Business Act is both reflective of what many companies are already doing and the expectations that modern society has for business. Directors’ legal duties must be supportive of responsible business behaviour, not an obstacle in its path.”

He added that the act represented a “huge opportunity” for the UK government to leave a positive legacy which was aligned with many of its other objectives, including Net Zero and Levelling Up. 

Fletcher explained that a commitment to the Better Business Act in the Queen's Speech would involve no additional spend from the government and that it supported the existing policies of the Department for Business, Energy and Industrial Strategy (BEIS).

"It is something that is well within the government's gift, is widely supported by the public and reflects how most business leaders see their roles," he said. "It would involve no additional liabilities for directors and no new legal rights for stakeholders to sue companies, so why not?"

 

Avoid a repeat of P&O

The campaigners emphasised that the law change would avoid repeats of the recent P&O Ferries scandal which saw 800 employees fired with no notice and replaced with overseas agency crew. 

Portas said: “As things stand, the Companies Act still allows some companies to pursue profits at the expense of workers, communities and nature. We saw this most clearly recently with the horrendous behaviour of P&O Ferry executives. We need to update our laws so that a decision like that can never be made in a British boardroom again.” 

We see the pressure growing and think it is only a matter of time before we see the change happen

The coalition will continue to develop its support, said Fletcher, as well as boosting public awareness and educating MPs.

"We see the pressure growing and think it is only a matter of time before we see the change happen," he said. "In future, people will look back and be amazed that businesses were free to prioritise shareholders' interests at the expense of people and planet." 

 

Header photo: Mary Portas (centre) with other members of the Better Business Act coalition outside the Houses of Parliament in London, UK, from left to right Xavier Rees, CEO, Havas London; Douglas Lamont, CEO, Innocent Drinks; Carum Basra, Associate Director, Purpose Union; Caireen Wackett, CEO, Portas Agency; George Horn, Head of People & Culture, Lucky Saint; Mary Portas, Co-Chair, Better Business Act; Phil Hails-Smith, Partner, Joelson; Chris Turner, Campaign Director, Better Business Act; Luke Fletcher, Partner, Bates Wells.