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companies and their directors are legally compelled to maximise their profits, without regard to any other factors.
This isn't accurate though - the Companies Act 2006, for a start, has a lot more in it that just maximisation of profit.
172Duty to promote the success of the company
(1)A director of a company must act in the way he considers, in good faith, would be most likely to promote the success of the company for the benefit of its members as a whole, and in doing so have regard (amongst other matters) to—
(a)the likely consequences of any decision in the long term,
(b)the interests of the company's employees,
(c)the need to foster the company's business relationships with suppliers, customers and others,
(d)the impact of the company's operations on the community and the environment,
(e)the desirability of the company maintaining a reputation for high standards of business conduct, and
(f)the need to act fairly as between members of the company.Don't (c) and (d) already cover what is suggested in the article?
NotThamesWater-
That's interesting. I always heard the "maximise profit or be sacked" thing.
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Interesting.
IANAL but is that saying that a director must promote the success of the company (maximise profits) for the benefit of its members (shareholders) and in doing so have regard for (but it's just a suggestion):
- workers rights
- environment
-blah blah blah
Maybe the new suggested legislation would place those factors on an equal footing with profits? Similar to a B Corp?
- workers rights
hippy
Lebowski
It always seemed batshit crazy, bordering on psychopathic, that companies and their directors are legally compelled to maximise their profits, without regard to any other factors. This sounds like a very positive change that needs to happen:
"adding a duty for directors to consider the social, economic and environmental impact of their business alongside profitability and returns for shareholders"
https://www.theguardian.com/business/2023/nov/27/corporate-governance-shareholder-productivity-ethical-environmental-report