Business is changing the way it does business. It's time for legislation to catch up.

Today was Better Business Day. I, along with 200 other business leaders, went to the Houses of Parliament at Westminster to talk to my MP, with the aim of getting a surgically-targeted change to clause 172 of The Companies Act. This is the clause that states that the only legal requirement of business is to maximise shareholder return. The bit that makes it clear that profit comes before purpose, people or planet. It's a very low bar indeed.

In 2022, is that still acceptable?

I personally don't think so. And nor do many of today's business leaders, from world-beating multinationals like Patagonia and Unilever, to start-ups, businesses and enterprises, all aligning profit with purpose.

What's driving this change?

There are numerous forces in play. On the macro scale, we see climate change driving an urgent need to build sustainable, carbon neutral practices into sourcing raw materials, manufacturing, fulfilment and supply-chain management. We also see Generation Z, now comprising a quarter of the market and workforce, driving the shift towards purpose. They are voting with their feet when it comes to employment, and their wallet when it comes to brands they believe in. Businesses who lead with purpose, who have well-defined values, and are clear about the impact they are having on each of their stakeholders, are winning.

By winning, I mean, they stand to make more money. And if you get yourself on this fast-moving train, so will you.

Profit is, of course, critical. How else would business get things done? But it's no longer acceptable to simply return profit to shareholders on the back of a low paid workforce, or whilst decimating natural resources, perpetuating unsustainable practices, neglecting your suppliers or the community in which you do business. It's an ecosystem, and one part cannot be allowed to thrive at the expense of the others.

We need to rethink profit as the only measure of success.

Milton Freedman's idea that the only moral obligation of business being profit, and growth for growth's sake, has got us into one hell of a mess. Environmentally and socially. We are seeing homelessness on an unimaginable scale, with 1 in 52 people in London officially homeless (Shelter). 280,000 households across England, homeless. Families hanging on by a thread in 2022 while the cost of living soars.

GDP is really an arbitrary measure of success when you think about it, especially when research by the Health Foundation has revealed that women in Britain's poorest postcodes have one of the lowest life-expectancies of the OECD Nations*, with the exception of Mexico. Should we not look to how well the people of our nation are thriving as a more effective measure of success?

The fact that English women in our poorest areas die earlier than women in almost all of the developed nations should be an urgent call to action. Something that makes our policy-makers sit up and take notice. Something that says it's time to do things differently.

In post-brexit Britain, we talk about "levelling up", "building back better", and becoming a "world-beating" economy. All of these are nice phrases - but meaningless until you back them up with actions that make them real.?

Changing clause 172 of The Companies Act holds business accountable for environmental and social impact. It puts agents in the field; imagine business leaders in Middlesbrough, Oldham, Blackpool, Knowsley or Liverpool out there creating healthier, thriving communities and ecosystems, literally doing the work of levelling up. Empowered to "build back better" in real-life terms.

Let's start with a higher minimum standard upon which to build business. Encourage leaders with purpose, who look to return value beyond profit. Give them "metrics that matter" to measure their progress. Hold business accountable.

We can be world-beating. Let's aim to meet the UN's sustainable development goals with a world-first. Legislation to catch up to a train that has already left the station.

I'd love to hear your thoughts below, please do drop me a comment.

*Life expectancy for women in the poorest areas is well below the UK average of 83.1, the England average of 83.2, and the OECD average of 83.4, the analysis shows.Some of the most deprived areas in England include the local authority areas of Blackpool, Knowsley, Liverpool and Middlesbrough. The least deprived areas include Chiltern, Hampshire, Hart and Rutland.- (Guardian, 19/04/22)