Future of the Corporation

The Future of the Corporation programme is the British Academy’s review of the role of business in society. It combined research from a range of academic disciplines with insight from senior business and policy leaders. It ran over four years from 2017, concluding with a final report published in September 2021. Beyond this, several small follow-up initiatives are being continued, including work on law and regulation, and business teaching.

The programme's initial research, published in 2018, highlighted trust in business and its impact on people and the environment along with globalisation and technological disruption as drivers of a shifting view of business. The research suggested a need to develop a new, more human framework for the corporation around well-defined and aligned purposes, complemented by ethical cultures and commitments to trustworthiness. Professor Colin Mayer, the Academic Lead for the programme, drew together the research and defined the purpose of business as:

Producing profitable solutions from the problems of people and planet, and not profiting from creating problems.

Building on this, a deliberative research exercise involving hundreds of experts, academics, business leaders and policymakers, conducted in 2019, led to the development of eight principles for purposeful business. These provided a coherent framework for how business characterised by problem-solving purposes would operate and how policy and practice would support this.

2020-21 marked a turning point with business and society facing a series of major challenges, from the COVID-19 pandemic to climate change and the cost of living. The Future of the Corporation programme set out to consider how the principles for purposeful business might be applied in such circumstances. It convened both high-profile, public-facing Purpose Summits - large events with leading figures from business, policy and academia; and a series of focused and technical Purpose Labs - small workshops gathering and developing ideas for changes to policy and practice. The conclusions are published in our final report, Policy and Practice for Purposeful Business.

This final report argues for a coherent package of changes to policy and practice that together support the implementation of corporate purposes and hold decision-makers to account for them. It summarises the findings of over four years of research, engagement, polling and collaboration with other initiatives that there is a growing appetite for purposeful business, including from business itself, investors, policymakers, regulators, employees, consumers and other stakeholders.

We conclude that a permissive legal, regulatory, governance and reporting framework is required to enable and encourage purposeful business, and the UK has such a framework. But in the UK there is insufficient accountability for, and implementation of, purposeful business. Few companies take up the option that exists within the law to adopt purposes beyond promoting shareholder interests, and there is insufficient appreciation and enforcement of directors’ duties under the law. Internationally, initiatives are currently in progress to ensure that companies and investors report their environmental and social impacts, but there has been insufficient focus on measuring, valuing and incentivising corporate purpose.

With a supportive legal, regulatory, governance and reporting framework in place, there are two mechanisms that together are required to deliver coherent reform:

1. Accountability: using the legal, regulatory, governance and reporting framework to hold companies to account for complying with corporate purposes of profitably solving problems of people and planet and not profiting from creating them; and,
2. Implementation: ownership, measurement, finance, innovation and investment through which people harness the potential of markets to deliver profitable solutions which benefit customers, the workforce, investors, communities, society and the environment.

The report contains 18 proposals, using these mechanisms to put purpose at the heart of the policy and practice that determines how business operates. It also refers to a series of policy starting points that are already in motion and are current, realistic prospects for change that applies the principles set out by the Future of the Corporation programme.

What can you do? All parts of society have a role to play in achieving this as customers, communities, employees, academics, educators, teachers, journalists, public figures and individuals from every walk of life and every part of the world. It is in the power of all of us to effect the change that is needed and enhance still further the remarkable contribution that business has made to our lives to date. An agenda for change needs leadership, but in a world of great transparency and growing complexity, every voice matters. We are all part of the business ecosystem and we can all use the influence we have to put purpose at the heart of business in the 21st century.

We would love to hear reactions and responses and if you would like to to discuss these findings or know more about the programme, please email the team on [email protected].

Following the completion of the main phase of the Future of the Corporation programme, a few smaller initiatives aim to pick up on specific strands of the work and consider how the ideas developed within the programme could be applied in particular circumstances. The main area considered in 2022 has been the question of how business is taught. Convening two roundtables and building on the findings of the programme, the Academy has now published a follow-up report entitled Teaching Purposeful Business in UK Business Schools. This argues for:

In addition, further work is developing around how purposeufl business is translated into law and regulation, in the UK (in particular in Scotland, where Professor Mayer chairs the Scottish Business Purpose Commission) and internationally, through the Standing International Forum of Commercial Courts.

The British Academy would like to thank the following partners and supporters for their support of the Future of the Corporation programme.

If you would like more information about becoming a partner or supporter of the programme, please contact Michelle Waterman, Head of Development on 020 7969 5290.