Director Weekly  The IoD Commission’s report offers practical recommendations for directors, investors and policymakers to maximise business’s impact as a force for good

The Commission’s report is titled Business. A Force for Good? – and the question mark is not incidental. The Commission wanted to acknowledge the criticisms levelled at business, while exploring the conditions under which businesses are most likely to contribute positively to society while supporting sustainable economic growth.

“The public narrative has too often been one of excessive executive pay, poor conduct and the exploitation of workers,” writes the Commission’s chair, Lord Rees of Easton OBE, in his foreword. Such criticisms have sometimes been justified.

Yet to focus only on those complaints is to see a distorted picture of business and the role it plays in society. For a start, business creates work, income and purpose; produces the goods and services that daily life depends on; and generates the taxes that fund public services. The relationship is not a transactional one, however. Business exists in society as an ecosystem. So the real question, writes Rees, is about what business does with the position it occupies in that ecosystem – and under what conditions it can become a stronger force for good.

The Commission’s report aims to help create those conditions. It introduces a seven-dimension framework designed to help boards, investors and policymakers assess what’s needed for business to create sustainable value, contribute to good growth and strengthen trust in the economy. Critically, it is as relevant to small and medium-sized businesses as to large listed companies.

While the Commission’s central recommendation is for business leaders and boards to embed long-term goals beyond delivering the next financial return, it also addresses investors and capital markets. Capital needs realistic timeframes, it argues. This is the idea of patient capital: giving businesses greater scope to invest in people, productive capacity and resilience, rather than prioritising short-term financial extraction.

There are recommendations for policymakers and regulators too. Tax treatment, regulation, listing requirements and reporting standards should be designed to ensure that responsible business practice is the commercially rewarded choice, not a cost that responsible firms absorb and others avoid. It is also important for policy not to add regulatory burden that does not improve outcomes.

With that in mind, we were very pleased that the Minister for Small Business and Enterprise, Lord Leong, joined us for the report’s launch at the IoD’s recent Annual Director Forum. He praised the report as “an important contribution to this debate,” emphasising that “commercial success and human decency are not mutually exclusive… they can reinforce one another.”

Lord Leong also welcomed the report’s call for business, government and wider society to work together. “We will not always agree on every policy,” he said, “but we share a fundamental ambition: to make Britain a country where enterprise flourishes, businesses grow, and prosperity reaches every community.”

For the IoD, the report’s launch is the starting point for engaging stakeholders and shaping a new narrative about business’s role. It has been well received in our meetings with relevant organisations and policymakers, and we will be considering how to embed it across the IoD, such as in our training offer. It is also informing ongoing policy work – such as our response to the Modernising Corporate Reporting consultation that closes at the end of the month.

The launch of the Commission’s report is a significant moment – and the springboard for a new conversation about business as a force for good.

Hugo Legh is Head of Media, Campaigns and Public Affairs at the IoD