GeofCox<p>Is it possible to reform company and commercial law to incentivise responsible business?</p><p>The current legal/financial environment for business is full of perverse incentives - business 'success' comes from generating returns regardless of damage to people or planet. The only real incentives for responsible behaviour are personal morality and adverse publicity - getting found out - that might put off customers.</p><p>By contrast, business rewards for maximising quick returns and growth regardless of damage done are immediate and powerful.</p><p>Yet I believe the social enterprise movement has demonstrated that it Is possible to marry the energy and creativity of free enterprise with social and environmental responsibility.</p><p>What would company and commercial law look like in a truly responsible economy? (Your thoughts on this welcome.)</p><p>I think there are 3 areas:</p><p>1. Governance: widening the legal duty of directors of limited liability companies to act not just in the interests of shareholders, but also of employees, the wider community, and the natural environment.</p><p>2. Representation: for larger businesses, elected employee and community representation on the board, and tax incentives for the extension of ownership to employees and other stakeholders.</p><p>3. Reporting: social alongside financial auditing; the bigger the business, the more detailed the reporting and audit requirements, including - for the very largest - supply-chains.</p><p>Note, most of this will not affect small business. Your local shops or musicians or plumbers would be largely unaffected. But - capitalists will argue - much of the incentive to grow very big will be removed. Well... YES !</p><p>(Note <a href="https://climatejustice.social/tags/degrowthuk" class="mention hashtag" rel="nofollow noopener" target="_blank">#<span>degrowthuk</span></a> is proposing 'elected worker and community representation on company boards'. See <a href="https://gettingreal.org.uk/wp-content/uploads/2024/04/Stop-the-Damage-Build-a-Better-full-v-5.pdf" rel="nofollow noopener" translate="no" target="_blank"><span class="invisible">https://</span><span class="ellipsis">gettingreal.org.uk/wp-content/</span><span class="invisible">uploads/2024/04/Stop-the-Damage-Build-a-Better-full-v-5.pdf</span></a> )</p>