A responsibility to the planet

More than three-quarters of the public believe “businesses have a responsibility to look after people and the planet alongside making a profit”, according to research conducted by the campaign group, the Better Business Act.

As you might remember, the Better Business Act seeks reform of directors’ duties in section 172 of the Companies Act 2006, to reflect a wider responsibility.

Retail guru Mary Portas joined the drive for change this week, as the Better Business Act aired their argument during a gathering in Westminster. In a statement, Portas, who was joined by Douglas Lamont, chief exec of confectionery company Tony’s Chocolonely, said: “We know business is about profit. But the values of ‘biggest, fastest, cheapest’ no longer resonate—and are no longer tenable.

“We need a new value system in which businesses don’t just grow and mindlessly make more money, but thrive. They have to find ways of creating profitable solutions for the problems people and the planet face, rather than profiting from them. That’s every business’ brief today. And this small change to the law could drive a big impact.”

Currently, section 172 gives directors a first duty to promote the “success” of companies; draft legislation from the Better Business Act campaign changes that to promoting the “purpose of the company”.

Silent spring

So we’ve had “greenwashing”—polishing green credentials to the point where they bear no resemblance to reality—and now we have “greenhushing”: the unfortunate habit of companies to downplay their green goals or projects, in the hope of avoiding criticism.

This seems counterintuitive but, given the predictions of more ESG-based litigation bubbling around the corporate world, it doesn’t seem so far-fetched.

The New York Times reports that greenhushing is on the rise because of brickbats from both the left and right of politics, but especially from the “anti-woke” movement currently under way in the US.

Climate consultancy South Pole found last year that 25% among 1,200 companies questioned were planning to “not publicise” their net-zero plans. If corporates do save the planet, no one’s going to know it was them.

Extension rebellion

Dual-class shares attract their fair share of controversy. Do they create accountability or not? Do they create rogue CEOs? Do they, in fact, create more creative CEOs with better long-term prospects?

But the headlines really go mad when US companies attempt to extend the length of dual-class share structures. Anyway, one group of legal eagles, think they have the answer. Companies should “identify in their charter the terms and conditions of any potential dual class extension at the time of their IPO.” Problem solved.

Pops at the top

How do you persuade male CEOs to change their less-than-healthy attitudes to gender issues? According to a new piece of research, you can give them daughters.

According to Dr Zhiyan Wu, a professor of strategic management at Rotterdam School of Management, this can make CEOs more “inclined” to support women’s struggle for equality.

Dr Wu says: “The CEOs that we studied spoke to us about how their corporate decisions have changed after their first-hand learnings from their growing daughters about the constraints women often face.

“They recognised that those constraints had escaped from their attention till their daughters became potentially vulnerable to those constraints in their adolescence and early adulthood.” Parenthood is lifelong learning indeed.

Sir Win Bischoff (1941-2023)

Lastly, Board Agenda’s sympathies go out to the family of Sir Win Bischoff, after he passed away this week. Sir Win was a former chair of the Financial Reporting Council and a much respected figure in corporate governance circles. He also held leadership roles at Schroders, Citigroup and Lloyds Banking Group.

Sir Jan du Plessis, the current chair of the FRC, said: “During his tenure as FRC chair Sir Win played a pivotal role in strengthening the FRC framework and enhancing its oversight of the audit profession. His commitment to upholding integrity and transparency in financial reporting earned him widespread admiration and respect.

“We extend our heartfelt condolences to Sir Win’s family, friends and colleagues. His presence in UK corporate life will be deeply missed.”