Question to the Department for Business and Trade:

To ask the Secretary of State for Business and Trade, whether his Department plans to bring forward legislative proposals to ensure that company law prioritises stakeholder primacy over shareholder primacy.

The Government welcomes suggestions on how to ensure companies consider wider stakeholder interests alongside the needs of stakeholders. As part of this, officials have engaged with industry-led reports such as the Demos report, "The Purpose Dividend" published in 2023.

Section 172 of the Companies Act 2006 enshrines in statute the "enlightened shareholder value" principle, which recognises that the long-term success of a company depends in part on the ongoing consideration of wider stakeholder interests. The Government believes that this allows companies to determine their purpose and priorities themselves. This contrasts with the "shareholder maximisation" principle underpinning directors' duties in some other jurisdictions, in which directors owe duty only to shareholders.

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