Company purpose and the true and fair requirement
A discussion paper - based on UK Companies Act 2006
We are grappling with the ever widening difference between public and private returns and the increasing harm done to people and our planet, with resulting pressure on private finances, as the cost of living increases, and on public finances, as governments try to repair the damage caused by, what we euphemistically describe as, externalities. Responses include reconsidering company purpose, questioning what is required for true and fair accounts, legislating to limit sector specific externalities (better described as harm done), adding reporting requirements, rethinking fiduciary duty, the list goes on.
This discussion document explores overlap between accounting (the basis of being held to account) and the law (that frames a company and its directors' actions) and the public interest (the overriding requirement for accounts and laws). It proposes relatively simple though technical solutions, to align public and private interest which is not to understate political challenges. We have come to accept company purpose as being financial returns even though company legislation provides for alternatives.
This links a number of areas in which I have been involved and seeks comments and views, especially where my enthusiasm has overstepped my knowledge, but in order to explore how the basic ideas might be progressed.
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