Business is changing. The predominance of companies for which profit is everything – and everything else is nothing – is waning, and a new wave of entrepreneurs and socially-minded individuals is on the rise. If I could give one piece of advice to the next government, it would be this: don’t just do what’s best for business, also do what’s best for those people – the stakeholders – involved in business.
A company’s stakeholders include its customers, its staff, its leadership team, as well as its shareholders, suppliers and vendors: all those people who have an interest in the success of the business. Every single one of these stakeholders needs to be taken into consideration by ministers in their business-focused decisions, especially when it comes to determining government policy. After all, businesses don’t vote – it’s the people in these businesses who vote.
Consumers are becoming more morally aware. They have an increasing amount of data available at their fingertips – from the ingredients in the products they buy to the supply chains of companies – and they are demanding more from their favourite brands. A new type of company has arisen to meet this demand, already popular in the US and elsewhere abroad. Benefit corporations – or “B-corps” – are companies which include a positive impact on society and the environment, in addition to profit, as their legally defined goals.
This trend, where businesses increasingly combine profit and purpose, is coming to the UK, and Britain needs to be prepared.
These new purpose-powered companies will be attractive not only to a customer base that is asking for more transparency from their brands, but also to the generation currently entering the workplace. I expect to see a brain drain of a new type develop, no longer across borders but towards a fresh type of company, as these young people, increasingly motivated by purpose, demand more from their workplace.
The government needs to do all it can to support these businesses and the people who work in them. Firms need to be empowered to do good as they do business, and if it chooses, the next government can play a key role in facilitating this.
Policies need to encourage companies to adopt long-term thinking and strategies by creating a more stable environment. This could mean veering away from public quarterly reporting and towards simpler tax and administrative systems, and investing in the business leaders of the future – our children – through education, work experience programmes, apprenticeships and training.
I believe that business growth will be led by purpose and social responsibility. This is an opportunity for Britain’s next government: to grow the economy while also creating a fairer society, where the right responsibilities are in the right hands. Led by the US and a new generation of workers, a new model of B-corp type business is inevitable. And whichever party comes to power in May, they will need to support it to ensure Britain flourishes.