The “Principles of Purposeful Business” is published by the British Academy and contains:
• the case for climate change,
• the urgency of delivering on the UN Sustainable Development Goals (SDGs),
• technological developments,
• how change can and should be achieved.
It lists a series of principles to guide lawmakers and business leaders in any jurisdiction towards the policies and practices that can release the potential of business to profitably solve the problems of people and planet, and to prevent business from profiting from harm.
Principles for purposeful business
A purposeful business will organise itself on all levels according to its purpose. The Academy proposes eight principles for business leaders and policymakers. They do not prescribe specific actions, but set out the features of an operating environment that will enable the delivery of those purposes, while remaining flexible to a diversity of business models, cultures and jurisdictions.
1. Corporate law should place purpose at the heart of the corporation and require directors to state their purposes and demonstrate commitment to them.
2. Regulation should expect particularly high duties of engagement, loyalty and care on the part of directors of companies to public interests where they perform important public functions.
3. Ownership should recognise obligations of shareholders and engage them in supporting corporate purposes as well as in their rights to derive financial benefit.
4. Corporate governance should align managerial interests with companies’ purposes and establish accountability to a range of stakeholders through appropriate board structures. They should determine a set of values necessary to deliver purpose, embedded in their company culture.
5. Measurement should recognise impacts and investment by companies in their workers, societies and natural assets both within and outside the firm.
6. Performance should be measured against fulfilment of corporate purposes and profits measured net of the costs of achieving them.
7. Corporate financing should be of a form and duration that allows companies to fund more engaged and long-term investment in their purposes.
8. Corporate investment should be made in partnership with private, public and not-for-profit organisations that contribute towards the fulfilment of corporate purposes.
The principles are interconnected. Bringing about the change to which they aspire will require engagement from stakeholders and public pressure on governments for legal reform, leadership from businesses, investors and governments, feedback loops, new partnerships between business and stakeholders, and refreshed skills and knowledge provision.
The Principles paper can be downloaded via clicking here