The Institute of Directors has published Business. A Force for Good? - a landmark report by an independent Commission chaired by Lord Rees of Easton examining the conditions under which business contributes to wider society. Here is what the report says, what it really means, and why it matters to every purpose-led founder in Britain.
The Institute of Directors has published a report with a deceptively simple title: Business. A Force for Good?
It is the work of an independent Commission chaired by Lord Rees of Easton, the former Mayor of Bristol, bringing together leaders from corporate governance, finance, social enterprise, professional bodies and civil society. The Commission held four meetings across 2026, drew on robust debate, written submissions, and a YouGov survey of over 1,200 directors, and produced a seven-dimension framework for assessing the conditions under which business contributes to wider society.
I read it expecting a report about purpose. What I found was something just as interesting.
The Real Message
In the press release launching the report, Lord Rees wrote two paragraphs that, taken together, contain the entire argument:
"Business already makes an indispensable contribution to society. It creates jobs, develops skills, generates wealth and helps fund the public services and infrastructure on which we all depend."
"But business does not succeed in isolation. Thriving businesses depend on strong communities, effective institutions, public trust and a stable operating environment. Business and society are fundamentally interconnected."
Read that second paragraph again. It’s not a polite call for corporate social responsibility. It’s a message delivered straight back to government: we are holding up our end of the national bargain. When will you start holding up yours?
That is the real story of this report. And once you understand that, everything else falls into place.
The report is thoughtful and fair-minded. It acknowledges where business has failed - the Post Office scandal and the English water sector both feature as examples of what happens when governance, incentives and accountability break down. But its central finding is that business creates greater value for society when it is built on clear purpose and supported by long-term investment. And that is most likely to happen when the environment in which business operates - the regulation, the policy, the public institutions - is stable, coherent and fit for purpose.
In other words, if government genuinely wants business to be a force for good, it needs to create the conditions that make this possible.
The Arithmetic of the Bargain
Consider what business already contributes to the economy. UK businesses generate £95.4 billion a year in Corporation Tax. They collect and remit £477 billion in PAYE and National Insurance. They handle £177 billion in VAT. They pay £33.7 billion in business rates. This is the money that funds the NHS, the schools, the courts, the transport, the defence. Not ministerial goodwill. Business.
And yet, when politicians talk about business, when newspapers lead with stories of executive bonuses or water companies extracting billions while pumping sewage, they are usually talking about the 1,867 companies listed on the London Stock Exchange.
There are 5.7 million private sector businesses in the UK. 99.85% of them are small and medium-sized enterprises. Around three quarters have no employees beyond the owner. These are the businesses that sustain the fabric of daily life - the accountants and bookkeepers, the cafes and studios, the marketing agencies and makers and high street shops. They account for 60% of private sector employment and more than half of all turnover.
The report makes this point explicitly: listed Britain and business Britain are not the same thing, even though public debate and policymaking can sometimes treat them as if they were. When the government reacts to FTSE-level scandals with blanket compliance burdens and reporting mandates, it barely touches the multinationals. It lands squarely on the owner-managers and local entrepreneurs who can least afford it and had nothing to do with the problem.
Lord Rees notes - pointedly - that the current administration is the seventh in ten turbulent years. Constant changes to taxation, including retrospective ones, destroy the trust that long-term investment depends on. Businesses are asking for something far simpler than handouts or deregulation. They are asking for stability.
The Seven Dimensions
At the heart of the report is a practical seven-dimension framework for assessing whether the structural conditions are in place for a business to act as a force for good. It is not a compliance checklist or a scoring system. It describes the underlying conditions that make good outcomes more or less likely.
The seven dimensions are:
Purpose - why the business exists and what it is ultimately trying to achieve, beyond maximising returns to shareholders. The test is whether purpose actually influences decisions rather than remaining a stated aspiration.
Power and accountability - who holds decision-making power, and whether there are mechanisms that genuinely hold that power to account.
Ownership and value distribution - who owns the business and how the value it creates is shared between owners, workers and other stakeholders.
Incentives and time horizon - what behaviour is rewarded, and whether those rewards encourage long-term stewardship or short-term extraction.
Impact and externalities - the effects a business has on workers, communities and the environment, including costs borne by others rather than by the business itself.
Interdependencies - the relationships, resources, infrastructure and systems on which the business relies, and whether it manages those dependencies fairly and sustainably.
Customers - how the business creates value for customers, exercises power in the customer relationship, and maintains trust and fair dealing.
Four Questions for Smaller Businesses
The Commission is clear that being a force for good does not require a formal board, extensive reporting or a dedicated sustainability function. For smaller and owner-managed businesses, the seven dimensions can be applied through four simple questions:
What are we trying to achieve?
How do we treat people?
What are our wider impacts and dependencies?
Are we building for the long term?
The scale of the response will differ between businesses. What matters is considering these questions as part of everyday decision-making - not having the same governance structures as a large company.
What Business Leaders Actually Value
The report includes a striking finding from a YouGov survey of IoD members and non-members conducted in November 2025. Eighty-eight per cent of IoD members believe businesses have a responsibility to contribute positively to society beyond delivering profits.
But when asked how businesses demonstrate they are a force for good, the answers were revealing. The primary indicators were: fair treatment of employees and good employment relationships, acting transparently and ethically, and practising sound governance. Abstract commitments to ESG or sustainability scored significantly lower.
The IoD's own Policy Voice survey reinforced this. When members were asked about the factors most important to long-term organisational success, they ranked moral and ethical leadership first (82% said very important), ahead of long-term profitability (81%), fair treatment of employees (79%) and responsible governance (74%). Positive societal impact was rated very important by 48% of members, and environmental stewardship by 36%.
This ordering is important. It tells us that directors associate good business primarily with relational and behavioural qualities - how you treat your people, how you govern, how you make decisions - rather than with sustainability reporting or ESG frameworks. The how matters more than the label.
As one IoD member put it in the survey: there is a false binary between making money and doing good. Businesses need to be strong and profitable so that they can be good employers and contribute to the Exchequer. This is doing good.
What This Means for Purpose-Led Founders
Before the 2024 general election, Rachel Reeves promised The Times that Labour would deliver the most pro-business government the country had ever seen. Two years and a change of Chancellor later, the business community is still waiting.
In the run-up to the 2026 Budget, the UK's leading business organisations submitted detailed representations to HM Treasury setting out what they really needed. Chancellor John Healey called his response a Budget for Breathing Space. As I set out in Part 2 of a series on the Budget, the breathing space was real in some areas - high street rates, energy pricing for manufacturers, planning and devolution - but the single biggest cost pressure facing businesses that employ people, employer National Insurance, was left exactly where it was.
The IoD's report arrives after all of this and makes the same argument at a structural level: the compact between business and government needs mending. The Commission has laid out, with care and evidence, what the conditions for a thriving business environment look like. Whether government acts on it remains to be seen.
And yet, while government figures out the conditions that help business succeed - and given seven administrations in ten years, that could take some time - the rest of us will keep building. The founders I work with are building businesses that are a force for good right now, because that is who they are and what their purpose demands.
The IoD's report confirms what purpose-led founders already know: that a business built on clear purpose, with long-term investment and genuine care for the people it serves, creates more value - for its customers, its team, its community and itself. You do not need a government to tell you that. You just need the conviction to keep doing it.
Purpose-led businesses are not waiting for permission to be a force for good. They already are - and that is where the real story is.
Reference
Institute of Directors (2026). Business. A Force for Good? Report of the IoD Commission chaired by Lord Rees of Easton. Available at iod.com.
I work with purpose-led founders and leaders at every stage of growth. If this piece has sparked something - and you'd like to think about what it means for your business, I'd welcome a conversation.
