Good or greedy? Firms caught between doing right and chasing returns

Walk down any British high street and you’ll see the contradiction laid bare. Businesses that support their communities sit alongside those accused of cutting corners and chasing profit at any cost. The question isn’t whether business can be a force for good—it’s whether the system actually allows it.

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 (IoD) in this year’s ‘IoD Commission’. The members of the commission will discuss, debate, ask for evidence and thoughts from a range of stakeholders over the next few months and report back.

Photo by The New York Public Library on Unsplash

In the meantime, these are my initial thoughts and there will be more to come over the time until the Commission reports.

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 used to be home to small local, community concerned enterprises are replaced by hit and run profit focussed opportunists. 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 call for business models that create value is created for workers, smaller businesses in the supply chain, communities, wider society, and the environment and not just for shareholders.

At the same time, a growing coalition of UK business leaders is publicly calling for legal reform to make this shift imperative. The argument is that the current system that focusses on shareholders forces directors to prioritise profit even when they want to put people and planet at the top of the strategic agenda. They’re 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 the current requirement to put shareholders first and ‘have regard to’ the interests of a big list of other stakeholders.

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

I’ve come across many, many more of examples of UK businesses stepping up than imposing harm on purpose. 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 appealing. They are also responding to public demand: consumers increasingly expect companies to behave ethically, and employees, especially younger ones, want to work for organisations with purpose, which align with their values.

Business is one of the UK’s most powerful drivers of innovation. From tech to life sciences, UK firms have designed and 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 can’t deny though that there is a darker side to business. Many of the UK’s economic challenges, such as stagnant wages, insecure work, poor treatment of small suppliers, regional inequality, environmental degradation, are linked to business practices shaped by decades of deregulation and short‑termism, by shareholders demands for returns and by lack of investment.

Critics argue that without systemic change, even well‑intentioned companies are often constrained by competitive pressures that reward cost‑cutting over care, and extraction over stewardship. The problem, they say, is not individual businesses but the rules of the game. The emerging consensus among academics, policymakers, and many business leaders is that, if we want business to be a consistent force for good, we have to redesign the system so that doing the right thing is not a rare act of heroism, but the default.

That means reforming company law, shifting from prioritising the benefit to shareholders to stakeholder responsibility, and supporting business models that embed social purpose at their heart. There is a hugely important role for directors of firms of all sizes and for Non-executive Directors in particular.

Business in the UK is a force for good and a more malign force. Which side comes out on top depends on the framework we operate in. Business can be a force for good. But it won’t happen by accident. We have to give it a leg up, by design.