After the excitement of a general election, it’s back to business as usual. But ‘business as usual’ is failing us. With ongoing reminders of the role business has played in climate breakdown, the mistreatment of workers and widening social inequality, the time has come for us to ask an important question—is the UK’s approach to corporate governance fit for purpose?

Companies in the UK currently operate under a legal regime of shareholder primacy, where directors have an obligation to shareholders and are required to prioritise their interests above all else. But this comes at a cost for other important stakeholders—employees, customers, local communities and the environment—whose needs are put second, or disregarded.

We’ve seen the impact of this play out in the headlines multiple times in recent years. Whether it’s P&O firing 800 members of staff to replace them with lower-paid workers, Thames Water dumping sewage into our rivers while paying dividends to shareholders, or the Post Office claiming millions by wrongly accusing 900 sub-postmasters of theft and fraud—it’s clear something needs to change.

To avoid more catastrophic failures like these, the UK needs to take a different path. Thousands of businesses are already pointing to the possibility of what a kinder and fairer economy could look like.

Structural change

It’s not enough for a selection of businesses to choose to do business the right way. It’s time to put the structures in place that will ensure all UK businesses become a force for good for all people and our shared planet.

A change to the law that governs how businesses operate is a good place to start.

The Better Business Act is calling for an amendment to Section 172 of the Companies Act that would empower every business leader in the UK to make decisions that align the interests of shareholders with those of wider society and the environment.

It is now backed by a coalition of almost 3,000 organisations, with names including Tony’s Chocolonely, Virgin and Iceland, all united in the goal of a change to legislation that would directly benefit the UK economy.

And there’s evidence to prove it.

Research has shown that a purpose-led economy could lead to a £149bn (7%) boost to UK GDP per year and a £2,288 annual salary rise for the UK’s lowest paid workers.

Public demand for a new way of doing business has been growing, too. More than three-quarters (76%) of people in the UK believe that the law needs to change to give businesses a legal responsibility to prioritise people and the planet alongside over making a profit.

The UK public want it — and businesses need it.

With a new government committed to “service”, we have a window of opportunity to create a different future. With the public and business making their views clear, now is the time for the government to take note, take action and send a message to empower businesses to become part of the solution.

A future in which the interests of all stakeholders, not merely a few shareholders, are heard and valued in decision-making is possible. But it’s in the hands of the government to make it happen.

Chris Turner is the Better Business Act’s campaign director and the executive director of B Lab UK.