A P&O Ferry
(Picture: PA)Business leaders want politicians to overhaul UK company law to stop a repeat of the P&O Ferry scandal.
A coalition of 1000 businesses including Iceland, Innocent Drinks and Anglian Water is today visiting parliament to urge MPs to reform company law to make environmental and social concerns equally important as profit.
The group wants a “Better Business Act” to be included in the Queen’s Speech, which would give equal weighting to climate and social impact alongside a duty to make investors a profit.
Retail expert Mary Portas, who is leading the group, said: “As things stand, the Companies Act still allows some companies to pursue profits at the expense of workers, communities and nature.
“We saw this most clearly recently with the horrendous behaviour of P&O Ferry executives. We need to update our laws so that a decision like that can never be made in a British boardroom ever again.”
P&O sparked outrage last month when it sacked 800 staff with no notice and replaced them with lower paid agency crew. A change to the law could may have made this more difficult, though P&O’s boss has admitted his business broke the law in any case.
Innocent Drinks CEO Douglas Lamont, who is also leading the Better Business Act group, said: “As the Companies Act currently stands company directors have the option to profit maximise for shareholders whatever the cost to others, we think it is time that legal hiding place is removed.”
The push has the support of the Confederation of British Industry and the Institute of Directors.
Dr Roger Barker at the Institute of Directors, said: “The Better Business Act is both reflective of what many companies are already doing and the expectations that modern society have for business.”
He called the suggestions “an obvious next step in the evolution of good corporate governance.”
John Foster, Director of the CBI’s Policy Unit, said: “With corporate purpose and responsibility now taking on an even greater emphasis following the crisis in the Ukraine, politicians and business leaders alike should view the principles underlining the Better Business Act as the starting point in the debate about how company law can be used to enable more firms to have meaningful societal impact.”
