Corporate governance reform isn’t optional, it’s how business builds resilience
21st Jan 2026
Chris Turner, Campaign Director, Better Business Act
Yesterday, the government pulled the Audit Reform and Corporate Governance Bill, a decision explained in a letter from the Minister for Small Businesses and Economic Transformation to the Business and Trade Committee. It’s a disappointing decision, but not the end of the road for corporate governance reform.
The letter cites a number of factors behind the decision, including concerns about administrative burdens on business, the need to support economic growth, and the parliamentary time required to progress such an ambitious piece of legislation.
These are legitimate considerations, particularly at a time when many businesses are under real cost pressure. But the need for reform hasn’t reduced, it’s intensified. Which is why we need a solution that works with business, not against it.
Since Carillion’s collapse, major corporate failures have continued, including Patisserie Valerie, Thomas Cook and Wilko, alongside reckless behaviour, ranging from P&O Ferries to the water industry. There is a clear pattern: our outdated corporate governance framework isn’t just failing workers and communities, it’s actively holding back growth and eroding long-term economic confidence. Without ambitious reform, these failures won’t stop – they’ll multiply.
But the government is in luck. The Better Business Act is a ready-made solution to address some of the worst excesses of corporate failure by creating a new UK-wide model of corporate governance. This is the model that B Corps are proving is more profitable, resilient and provides better jobs than business as usual.
The Better Business Act would make a targeted amendment to Section 172 of the Companies Act, clarifying that directors should put people, planet and profit on equal footing.
Far from imposing unnecessary burdens on business, this would reduce them by explicitly empowering directors to balance competing interests, aligning their role with the direction reporting requirements are heading, and replacing box-ticking with reporting that meets international standards and meaningfully reflects how companies balance people, planet and profit. A modest change with the potential for outsized impact, addressing many of the issues the Audit Reform and Corporate Governance Bill originally set out to tackle.
Crucially, this is not a drag on growth — it is a route to it.
Certified B Corporations already operate under a legal structure comparable to those proposed by the Better Business Act, and the evidence shows this approach is associated with stronger, not weaker, business performance. These businesses are outperforming their peers: UK SME B Corps have grown turnover at almost seven times the rate of other UK SMEs, increased their headcount by 11% compared to 2% across UK SMEs, and attracted 18% more investment over the past decade than comparable businesses.*
The wider economic case is reinforced by Demos’ Purpose Dividend report, which found that if all businesses were required to operate in a more purposeful way, aligning people, planet and profit, the UK could unlock long-term economic gains of up to £149 billion, alongside a £5.3 billion pay rise for the lowest earners.**
Dropping the Audit Reform and Corporate Governance Bill should not mean dropping the pursuit of better business practices in the UK. The case for reform remains strong, evidence-based, and supported by a growing number of businesses across the economy.
This is why we’re doubling down. Over the coming months, the Better Business Act will continue to work constructively with (and beyond) the 3000+ businesses supporting the campaign, as well as parliamentarians and policymakers, sharing real-world examples of companies already balancing profit with responsibility. The Better Business Act offers a credible, proportionate next step — and one the government can still choose to take.
* Take 10, Celebrating 10 Years of the UK B Corp Movement, B Lab UK, 2025 https://pardot.bcorporation.net/bluk-10-years-impact-report
** The Purpose Dividend, Demos, 2023: https://bcorporation.uk/act-and-learn/knowledge-and-resources/the-purpose-dividend/