What is the Better Business Act and why should founders care?

The way we do business has changed dramatically over the last 20 years. Company law hasn't.

Today's founders are building businesses in a very different world to the one that existed when the Companies Act 2006 became law. Customers expect businesses to take responsibility for their impact. Employees want purpose as well as pay. Investors are increasingly looking for long-term resilience, not just short-term returns.

Yet the legal framework governing UK businesses remains largely unchanged.

That's why thousands of businesses, including Virgin StartUp, support the Better Business Act: a campaign to modernise UK company law so that every business is empowered to create value for people, planet and profit.

What is the Better Business Act?

The Better Business Act is a proposed change to UK company law that would require businesses to consider the interests of people, the planet and shareholders as part of their decision-making. Led by B Lab UK and backed by more than 3,000 businesses and organisations, the campaign aims to amend Section 172 of the Companies Act 2006 so that stakeholder interests are legally aligned with shareholder interests.

In simple terms, the Better Business Act seeks to ensure that companies create long-term value not only for investors, but also for employees, customers, communities and the environment.

A closer look at the Better Business Act

The Better Business Act is the flagship policy campaign from B Lab UK, the organisation behind the global B Corp movement. Its mission is to modernise UK company law so it reflects the realities of how successful businesses operate today.

At the centre of the campaign is Section 172 of the Companies Act 2006, which outlines directors' duties. Under current legislation, directors must promote the success of a company for the benefit of its shareholders, while only having regard for wider stakeholders such as employees, suppliers, communities and the environment.

Supporters of the Better Business Act argue that this framework no longer reflects modern business. Today's founders are increasingly expected to balance profit with social and environmental impact, yet UK law continues to prioritise shareholder returns above all else.

The proposed amendment would create a new legal principle: that the interests of shareholders should be advanced alongside those of society and the environment. The campaign also calls for businesses to report on how they balance people, planet and profit, helping to increase transparency and accountability.

For founders, the Better Business Act isn't about replacing profit with purpose. It's about creating a legal framework that supports sustainable growth, responsible leadership and long-term value creation.

Why does this matter for founders?

For many founders, this already reflects how they run their businesses.

Whether you're building a startup from your kitchen table or scaling a growing team, success today depends on more than quarterly profits. Founders are increasingly balancing multiple priorities:

• Creating good jobs

• Supporting local communities

• Building sustainable supply chains

• Reducing environmental impact

• Looking after employee wellbeing

• Delivering long-term value for customers and investors

The challenge is that the law hasn't fully caught up with this reality.

The Better Business Act aims to create a legal framework that better reflects how modern businesses operate and the role they play in society.

What would actually change?

The campaign is built around four principles that would shape an updated Section 172.

1. Aligning shareholder interests with people and planet

The proposed change would establish a principle that the interests of shareholders should be advanced alongside those of wider society and the environment, rather than being treated separately.

2. Empowering directors

Directors would be explicitly empowered to use their judgement when balancing the interests of different stakeholders, helping them make decisions that support long-term success rather than short-term gains.

3. Making stakeholder governance the default

The campaign argues that considering wider stakeholder impact should apply to all companies, not just businesses that voluntarily adopt purpose-led structures or pursue certifications.

4. Increasing transparency

Businesses would report on how they balance people, planet and profit, helping to improve accountability and trust.

The business case for change

This isn't just about doing the right thing.

Supporters argue that stakeholder-led businesses are often more resilient, innovative and better positioned for long-term growth.

Research commissioned by the Better Business Act coalition suggests that a more purpose-led economy could deliver substantial economic benefits, including:

• A £149bn boost to annual UK GDP (7% increase)

• A 7x increase in R&D expenditure

• £86bn increase in capital expenditure

• £5.3bn pay rise for those on the lowest wages

Evidence from the UK's B Corp community points in a similar direction. B Corps have demonstrated strong growth, investment attraction and job creation while embedding stakeholder considerations into their decision-making.

For founders, this reinforces an important point: purpose and profit are not competing priorities. When done well, they can strengthen each other.

Why is the campaign gaining momentum?

Public expectations of business have shifted significantly. Research has found:

• 77% of the UK public believe businesses should be legally responsible to people and planet as well as to generate profit.

• 62% of company directors believe businesses should not only exist to make money.

• Many consumers increasingly choose where to work, shop and invest based on a company's wider impact.

At the same time, support for the campaign continues to grow. More than 3,000 businesses and organisations have joined the Better Business Act coalition, including companies of all sizes, sectors and regions across the UK.

Why now?

The timing is particularly significant. As the Companies Act approaches its 20th anniversary, the Better Business Act campaign is asking a simple question: If we were designing company law today, would we write it the same way?

The world has changed dramatically since 2006. We've seen major shifts in technology, climate awareness, employee expectations, consumer behaviour and the role businesses play in addressing social challenges. Yet the legal framework guiding company directors has remained largely unchanged. The campaign argues that modern business deserves modern law.

This message sits at the heart of Better Business Day 2026, which is built around the campaign theme: "20 years, same system? Upgrade to Better Business now."

How founders can support the Better Business Act

If you believe businesses should be empowered to create long-term value for people, planet and profit, there are two simple ways you can support the campaign today.

Join the coalition

More than 3,000 businesses and organisations have already joined the Better Business Act coalition, including Virgin Management, Virgin Red and Virgin StartUp.

By joining, you'll add your voice to a growing movement calling for UK company law to reflect the realities of modern business and support an economy that works better for people, the planet and long-term prosperity.

Join the Better Business Act coalition today.

Write to your MP

The Better Business Act coalition is also encouraging founders and business leaders across the UK to write to their local MP and ask them to:

• Raise the urgent need to modernise corporate governance in Parliament.

• Support reform of Section 172 so that UK law reflects the realities of the modern economy.

• Attend Better Business Day at the House of Lords on 9 June to hear directly from businesses championing stakeholder governance.

Write to your local MP - it takes less than a minute.