Survey highlights appetite for new definition of corporate purpose among UK businesses
15 Oct 2020
A new survey carried out by YouGov for the British Academy’s Future of the Corporation programme reveals many business leaders support steps to promote purpose in business. Of those surveyed, 44% agreed with the British Academy’s definition that the purpose of business was to “find profitable solutions to the problems of people and planet, not to profit from creating problems for either”. The same proportion, 44%, believe that the purpose of business is to maximise returns for shareholders within the confines of the law.
Just 15% of the senior decision-makers in business agreed that the current legal and regulatory environment business served society’s – rather than shareholders’ – interests.
Almost two thirds (63%) of those surveyed reported taking steps to make their own businesses more purposeful, including reviewing culture and values (32%), improving non-financial reporting on impacts of the business on people and planet (23%) and working with boards to revise purpose statements (20%).
Asked which methods they thought were the most important in helping to develop 'purposeful businesses' in the UK:
- 55% supported the Government creating incentives to encourage change (such as lowering company tax on those who pursue a social purpose).
- Two in five (40%) said the UK Government changing company law and regulations.
- A similar proportion (38%) said leadership from business itself, to develop new ways of operating (e.g. new board structures, purpose statements, culture change).
The Future of the Corporation programme proposed a new definition for corporate purpose and a framework for implementing it in Principles for Purposeful Business in 2019. In the year since, the British Academy has heard from influential organisations, experts and business leaders – including the World Economic Forum, former Bank of England Governor Mark Carney and Microsoft CEO Satya Nadella – calling for wider adoption of this purposeful approach to business. Today’s survey gives a clear indication of the support for a purposeful, problem-solving approach to corporate purpose among a cross-section of businesses of all sizes, in every sector.
Now, calls are growing for policymakers to match businesses’ leadership. In the coming months, the Future of the Corporation programme will convene leading figures to explore how its proposed principles can be implemented through changes to public policy and business education.
Professor Colin Mayer FBA, Academic Lead of the British Academy’s Future of the Corporation Programme, said:
Despite the crises we face, businesses of all sizes are routinely engaged with the energetic debate over purposeful business. Questions over corporate purpose relate directly to businesses’ own concerns – namely, how they can solve problems of people and planet, and whether the wider business environment supports or impedes them in doing so.
Many businesses are looking to change within the wider legal and regulatory environment to help them better achieve their purpose. By promoting a greater diversity of corporate purposes, such reforms could bridge the divide in opinion between those businesses who solely focus on financial goals and those who favour purpose, while creating benefits for wider society.
All figures, unless otherwise stated, are from YouGov Plc. Total sample size was 660 senior business decision makers. Fieldwork was undertaken between 14-16 September 2020. The survey was carried out online. The figures have been weighted and are representative of British business size.
Q1. Which one, if either, of the following statements do you think best reflects the role businesses have in society?
|The purpose of business is to maximise returns for shareholders / owners within the confines of the law||44%|
|The purpose of business is to find profitable solutions to the problems of people and planet and not to profit from creating problems for either*||44%|
|None of these||11%|
Q2. Whose interests, if anyone, do you think the legal and regulatory environment for business in the UK are more focused on?
|More focused on shareholders' interests||52%|
|More focused on society's interests||15%|
|Both share the same amount of focus||25%|
Q3. Which, if any, of the following do you think would be the most important in helping to develop 'purposeful businesses' in the UK?
|Leadership from business creating new ways of operating (e.g. new board structures, purpose statements, culture change etc.)||38%|
|The UK government changing company law and regulations to require changes to the way companies operate||40%|
|Introducing mechanisms to involve stakeholders (e.g. customers, suppliers etc.) in decision-making||21%|
|The UK government creating incentives to encourage changes (e.g. lowering company tax on those who pursue a social purpose)||55%|
|New training to enable behaviour change from employees and executives||25%|
|Pressure from investors and shareholders that links change to performance||31%|
|None of these||6%|
Q4. Which, if any, of the following steps has your business taken or considering taking to make itself more 'purposeful'?
|Working with the board of directors to develop and / or revise an official company purpose statement||20%|
|Revising the memorandum and articles of association to reflect the purpose||8%|
|Discussing the purpose of the business with shareholders / investors||19%|
|Improving non-financial reporting throughout the business to account for both positive and negative impacts of the business on people and planet||23%|
|Reviewing culture and values in light of the business's purpose||32%|
|Introducing mechanisms to involve stakeholders (e.g. customers, suppliers etc.) in decision-making around purpose||15%|
|Changing board or accountability arrangements to reflect the purpose||15%|
|Not applicable – my business is not taking nor considering making any changes to make itself more 'purposeful'||37%|