The Association of Chartered Certified Accountants (ACCA) in the UK has underlined the need to shift from the traditional limited liability company structure.
The accountancy body argues that this business model leads to an overly narrow focus on financial performance at the expense of wider societal and environmental impacts.
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Its new Building Future Business report suggests that the prevailing model of company structure pushes businesses towards prioritising shareholder returns, rather than treating financial results as one element within a broader network of impacts.
The report explores how businesses might shift from shareholder-first structures to approaches that recognise a wider set of measures.
ACCA tax and business law head Jason Piper said: “The conflict between the financial imperative and the concrete impacts of business on society and the environment are too great to ignore.
“Economic activity is supposed to benefit society, but in many ways we have ended up with an economic model that seems to do the opposite.”
The ACCA highlighted a series of questions in the report that it says organisations should address when considering how to reshape their business models.
These include identifying primary stakeholders, defining what constitutes value for each of them and mapping how value generated by economic activity is distributed among these groups.
The report also urges businesses to consider how these value flows relate to their existing legal structure, what support or direction is available in the current regulatory and legislative environment, and where there may be gaps.
It raises the issue of ethical considerations around how such gaps can be addressed and points to the role of non-regulatory actors in influencing choices around legal form.
Further questions set out in the report focus on how record-keeping, communication and reporting processes would need to evolve to suit any alternative models; which qualitative attributes are required to build confidence in reporting and governance; and what additional protections may be needed for stakeholders.
Piper added: “We have ended up in a place where businesses doing well can undermine the communities they are in.
“Building Future Business looks at what has driven this distortion of the decision-making process, and how we can try to redress the balance between business and society.”
