Making good Britain's shortfall of purposeful, long-term companies so the economy can rise to the challenge of lifting investment, productivity & living standards

The Big Innovation Centre convened the Purposeful Company Task Force in 2015. The Task Force is a consortium of FTSE companies, investment houses, business schools, business consultancy firms and policy makers. It is examining how the governance and capital markets environment in the UK can be enhanced to support the development of value generating companies, acting with purpose to the long-term benefit of all stakeholders. 

How? - What is the Task Force doing, how does it work and who is involved

The Task Force is co-chaired by Clare Chapman and Will Hutton and is led by a Steering Group and supported by a wide group of Contributors. The Task Force focused first on compiling the world's most comprehensive evidence around the impact of companies pursuing long term, value creating strategies. The results were published in an Interim Report in May 2016. 

The evidence was then used to source and develop policy options around the 21 areas for reform outlined in the Interim Report. The Task Force refined these into a series of recommendations and the thinking was then pushed and challenged by leading practitioner and experts during a programme of Policy Forums conducted in the Autumn of 2016. This led us to refining and deepening our proposals - and indeed rejecting and de-emphasising some - to end up with our final 6. This resulted in the Policy Report published in February 2017. 


Given the interest in executive pay arising from the Government's Green Paper on Corporate Governance and the related BEIS Select Committee Inquiry, an in-depth Executive Remuneration Report has also been published online. This contains a comprehensive analysis of the research evidence as it relates to executive pay in the UK and provides further detailed support for our recommendations. This report updates and replaces the Interim Report on Executive Remuneration, which was produced in November 2016 to coincide with the publication of the Green Paper. 

The next phase of the Task Force's work is to make change happen - this is described in more detail below in 'What Next?' section. 

In producing these Reports we have kept our ways of working across the Purposeful Company project very simple: the Steering Group oversees the work of the Task Force and it is the Steering Group who have authored the Recommendations in the 2017 Policy Report. 


While the whole Task Force developed and subscribe to the Statement of Overarching Aims and the Definition of a Purposeful Company set out in Sections 1 and 2 of the Policy Report - membership of the Task Force cannot be taken to represent an endorsement of every specific policy recommendation. Authors have been inspired by the shared aims and vision of purposefulness but they are acting in their personal capacity and the views expressed in the recommendation sections may not be taken to represent the views of their organisation. 

The Task Force also works differently to many other bodies producing Reports in this area:

  • It is collaborative - as already referenced above, we have engaged in extensive consultation and put the time and resources into exploring the feasibility of policy options as well as intended and unintended consequences right across the Investment chain.
  • It is rigorous - we have combined deep practitioner insight with large scale academic evidence, on what has been tried and tested across industries and countries and over time. There is a huge range in the quality of academic evidence and it is almost always possible to find a study that supports a particular viewpoint. Thus, we focus on the highest-quality evidence, published in the most rigorous peer-reviewed journals, and in many cases distinguishing causation from correlation. 
  • It is broad - change cannot be piecemeal, but must be system-wide, involving long-term thinking not only by executives, but also the directors who evaluate them, and the investors who appoint the directors. It involves not only changes in individual firms, but an overhauling of accounting principles and potentially company law. There is not a single eye-catching initiative that will achieve change. Instead, hard work will be required to deliver progress across a range of areas. 

Why? – Problem and Evidence

UK business is at a critical juncture. UK investment has ranked in the bottom 10% of the industrialised world for 16 of the last 21 years, with a particular crisis in R&D, which is the lowest, as a share of GDP, in the G7. Productivity growth is now 16% below trend, partly contributing to the stagnation in real wages and high current account deficit. Not only is output low, but also there is a widespread belief that this output is unequally shared.

The message from the evidence in the Interim Report was simple: a strong domestically owned corporate sector that creates sustainable long term value is critical to the success of the UK economy. The UK has too few, and a rapidly diminishing, number of great domestic value generating companies with strong market positions at home and abroad. Particularly those capable of exploiting the burgeoning opportunities of new technologies in the world where tangible assets dominate. We reveal a breakthrough link between company purpose and long term value. The evidence documented is overwhelming. The pay-offs to purpose are increasingly measurable and include superior investment, innovation, R&D and customer and employee loyalty - both attraction and retention. 

The government’s recent Green Papers on Corporate Governance and Industrial Strategy signal a serious intent to address these problems by revitalising the productivity of business, reorienting its focus onto the long-run, and ensuring that it ‘works for everyone, not just the privileged few’. Our Policy Report addresses the major issues raised by both papers and aims to provide guidance on how to achieve the government’s goals. 

The other element of 'Why' is about timing. It is critical that we address these issues now. The May government seems to recognise this reality, hence the importance it has given to Industrial Strategy and Corporate Governance with its two recent green papers – again a development that is a further sign of how opinion is changing. But these are not two discrete policy domains: they are profoundly interconnected. A pre-requirement for a successful industrial strategy is companies that are governed and managed purposefully, deliver sustainable value, are ready to seize the possibilities so created and raise the bar for the rest of the system: equally a successful industrial strategy creates the ecosystem which rewards the pursuit of purpose. Purposeful companies are the missing link.

What? - the Policy Recommendations 

The Task Force calls for a radical, practical and coherent roadmap to enable Purposeful Companies to flourish for the benefit of all. The recommendations, therefore, are aimed at overhauling corporate governance, reporting and re-purposing the investment management industry and sources of capital. In particular:

  • Companies should state precisely their purpose – their role in the world from which profit results – in their articles of association and regularly report on the delivery of that purpose.
  • Directors should be required to report on how they fulfil their legal obligations to ‘have regard’ to all stakeholders.
  • Government should formalise alternative models so that companies can choose a corporate form which best reflects their purpose, strategy and business model.
  • Company reporting should be overhauled to go behind financial assets and more effectively communicate companies’ strategic intent and value to shareholders. Timely and disaggregated national statistics on intangibles should be reported.
  • The asset management industry should be repurposed. Asset managers should state and have certified their purpose, in particular how they promote the long-term interest of the companies they invest in and the savers they invest for. They should also publish metrics on their stewardship activities.
  • Executive pay should be more simplified and aligned to the long-term. All companies should produce a Fair Pay Report, outlining their approach to pay fairness throughout the organisation.
  • Regulatory obstructions to the creation of and engagement by large independent shareholders – blockholders – should be removed. Voting with borrowed stock should be limited.
  • The default pension fund allocation could be set to apportion a given percentage towards purposeful companies, creating a pool of up to £100 billion for such investment. 

Recommendations at a glance


Who? - Steering Group 

Authors: Clare Chapman, Non-Executive Director; Alex Edmans, London Business School; Tom Gosling, PwC; Will Hutton, Big Innovation Centre; Colin Mayer, Saïd Business School, Oxford University.

Advisors: Birgitte Andersen, Big Innovation Centre; Philippe Schneider, Independent Consultant.

Task Force Members: Sam Anson, Scottish Government; Andy Haldane, Bank of England (Research Support); Mohit Joshi, Infosys; Leon Kamhi, Hermes Investment Management; Valerie Keller, EY Beacon Institute Beth Knight, EY Beacon Institute Véronique Laury, Kingfisher Xavier Mamo, EDF Energy; Ruth McKernan, Innovate UK; Peter Michaelis, Alliance Trust; David Pemsel. Guardian Media Group Will Pomroy, Hermes Investment Management; Dominic Rossi, Fidelity Worldwide Investments; Mark Seligman, Kingfisher; Ashok Vaswani, Barclays Ajay Vij, Infosys; Adrian Walker, Hogan Lovells International LLP; Nigel Walker, Innovate UK. 

Contributors: Rick Alexander, B Lab UK; Stephen Bevan, Institute of Employment Studies; Laurie Fitzjohn-Sykes, Tomorrow’s Company; Julian Franks, London Business School Sue Garrard, Unilever; Mark Goyder, Tomorrow’s Company; Loughlin Hickey, Blueprint for Better Business; Katie Hill, B Lab UK; Michelle Meagher, B Lab UK; Colin Melvin, Social Stock Exchange Paul Moore, Kingfisher; James Perry, B Lab UK; Olivia Richards, Oliver Wyman; Mark Seligman, Kingfisher; Matthew Willison, Bank of England; Jonathan Wills, Oliver Wyman; Charles Wookey, Blueprint for Better Business. 

Project Coordinator: Maria Ponce

What Next? - Purposeful Company Task Force: Phase 2

We are committed to going far beyond simply publishing reports to promoting engaged, intentional discussion on how to embed purpose so that it flows throughout an organisation and its ecosystem. Our priority is to identify and disseminate the strongest examples of progress around the policy proposals identified in this report and to showcase solutions that have developed and companies and investors who are implementing programmes that benefit both business and society. 

The Task Force will, therefore, publish an annual Acceleration Report each year over the next three years to highlight that business can deliver greater productivity, competitiveness and success without sacrificing sustainability or the public good. We will do all we can to champion these programs wherever we find them.

Phase 2 will also be about delivering Change Accelerators with action in three areas:

  1. Pilots will be kicked off around the policy recommendations on pay, accounting for purpose and investment funds to demonstrate what is possible and encourage take- up. The Task Force, the Big Innovation Centre and change catalysts will prioritise where action is needed and then create the conditions for successful pilots along with resulting best practice blueprints and advice to policy makers, so we build urgency to act with companies and investors.
  2. Detailed work and consultation will also commence in those areas requiring more development - particularly around Blockholding, Repurposing the Investment Industry, Finance for Purpose and valuing IP. Here we see the role of the Task Force and our broader partner network being about enabling and catalysing action. This means creating the conditions for change (e.g. in influencing government leaders to enable open innovation around value reporting), using our convening power to bring key players together to complete policy development or undertaking policy delivery design and providing thought leadership.

Further evidence will also be pulled together showing links between purposeful companies, trust and industrial strategy. 

Want to take part? – Join The Purposeful Company Taskforce

The next meeting of the Task Force to kick off this new phase will be on Thursday 27th April 2017. If you have any questions or would like to join us to become part of this powerful alliance please contact us on 0203 713 4036, and ask for Maria Ponce or Alice Piterova.

Contact Maria Ponce at with comments and suggestions on the Report or to explore joining the Purposeful Company Task Force. 


We need a new capitalism that will stop firms thinking in the short-term - Will Hutton's article in The Observer

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Embed purpose into business so that it flourishes for the benefit of all

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The Purposeful Company Policy Report

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