Basic Principles: About the Act
Our objective is to see these four principles reflected in an amended Section 172 of the Companies Act.
For many directors, this change in law will not materially affect their behaviours or the actions of their companies, but by becoming law it will no longer be a choice to align the long-term interests of people, planet and profit:
- Aligned Interests
The interests of shareholders are now advanced alongside those of wider society and the environment. This establishes a new principle of fiduciary duty within Section 172 of the Companies Act.
2. Empowering Directors
This change must empower directors to exercise their judgement in weighing up and advancing the interests of all stakeholders.
3. Default Change
This change must apply to all businesses by default. It must no longer be optional to benefit wider stakeholders beyond shareholders.
4. Reflected in reporting
Following this change, businesses must report on how they balance people, planet and profit in a strategic report or impact report, where one is currently required.
The Better Business Act Parliamentary Reception took place on 14 April 2021. To find out more about the Act and the politicians across Westminster who are backing the campaign to change the law, click here to watch a recording of the event.