Can business be a force for good?

Many individual businesses in the UK are a force for good, supporting communities and wider society, adding value and operating with purpose as well as profit. Business as a collective in the UK can be a force for good, but only if we address a system that often pushes it in the opposite direction.

The question is being asked by the Institute of Directors in this year’s IoD Commission. Members of the commission will discuss, debate, and gather evidence and perspectives from a range of stakeholders over the coming months before reporting back.

In the meantime, these are my initial thoughts, with more to follow as the commission progresses.

Walk down any high street and you’ll see the contradictions of UK business. Independent cafés sponsoring local youth teams sit next to multinationals accused of tax avoidance. Social enterprises tackling homelessness operate alongside firms criticised for poor working conditions. Premises that once housed small, community-focused businesses are replaced by short-term, profit-focused operators. The question of whether business is a force for good in the UK isn’t academic. It’s central to how we rebuild trust, prosperity and social cohesion.

Recent research suggests that expectations of how business should operate are shifting dramatically. Academics, think tanks, advocates for social justice, and organisations supporting small and micro businesses, as well as shareholders, consumers and customers, increasingly argue that the traditional view—that a company’s main purpose is to maximise shareholder profit—is no longer fit for the challenges we face, from climate change to increasing inequality. They are calling for business models that create value for workers, smaller businesses in the supply chain, communities, wider society and the environment, not just for shareholders.

At the same time, a growing coalition of UK business leaders is calling for legal reform to make this shift imperative. The argument is that the current system, which focuses on shareholders, forces directors to prioritise profit even when they want to put people and planet at the top of the strategic agenda. They are campaigning for a change to Section 172 of the Companies Act so that every business is empowered and required to act in the interests of all stakeholders equally, rather than prioritising shareholders and merely having regard to others.

This tension between what many businesses want to do and what the system rewards them for doing sits at the heart of the debate.

The case for business as a force for good

There are many more examples of UK businesses stepping up than causing harm intentionally. The rise of B Corps, social enterprises, not-for-profits, ethical brands and purpose-driven start-ups shows that many founders genuinely want to build companies that contribute positively to society. These firms are proving that responsible business models can be commercially successful as well as morally compelling.

They are also responding to public demand. Consumers increasingly expect companies to behave ethically, and employees, particularly younger ones, want to work for organisations with purpose that align with their values.

Business is also one of the UK’s most powerful drivers of innovation. From tech to life sciences, firms are developing solutions to some of the world’s most pressing problems. When business is aligned with social purpose, the results can be transformative.

The case against

We cannot ignore the darker side of business. Many of the UK’s economic challenges—stagnant wages, insecure work, poor treatment of small suppliers, regional inequality and environmental degradation—are linked to business practices shaped by decades of deregulation, short-termism, shareholder pressure and underinvestment.

Critics argue that without systemic change, even well-intentioned companies are constrained by competitive pressures that reward cost-cutting over care and extraction over stewardship. The issue, they say, is not individual businesses but the rules of the game.

There is a growing consensus among academics, policymakers and many business leaders that if we want business to be a consistent force for good, we must redesign the system so that doing the right thing becomes the default rather than an exception.

That means reforming company law, shifting from shareholder primacy to broader stakeholder responsibility, and supporting business models that embed social purpose at their core. There is also a critical role for directors of organisations of all sizes, and for non-executive directors in particular.

Business in the UK is both a force for good and, at times, a more harmful one. Which side prevails depends on the framework within which it operates. Business can be a force for good, but it will not happen by accident. It requires intention, structure and design.

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