Apr 13: ACCA (the Association of Chartered Certified Accountants) has urged a fundamental rethink of the traditional limited liability company model, highlighting the need for business structures that better balance financial performance with societal and environmental impact.
In its latest report, “Building Future Business,” ACCA argues that the current legal framework of limited companies often drives an excessive focus on financial returns, sometimes at the expense of communities, employees, and the environment. The report explores alternative models that embed financial outcomes within a broader ecosystem of value creation for all stakeholders.
Md. Sajid Khan, Director – India at ACCA, emphasized the shift in expectations from businesses today:
“Businesses today are being judged not just by profits but by the value they create for communities, employees, and the environment. The traditional limited company model often prioritizes financial returns over these wider responsibilities. ACCA’s ‘Building Future Business’ report highlights that adopting approaches like B Corps and integrated reporting can help companies align growth with societal impact, ensuring success is shared by all stakeholders.”
The report points to emerging frameworks such as B Corporations and integrated reporting as viable alternatives that encourage organizations to balance profitability with purpose.
Jason Piper, Head of Tax and Business Law at ACCA, highlighted the growing tension between financial objectives and real-world impacts:
“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’ve ended up with an economic model that seems to do the opposite.
The company form we know so well did a great job in protecting providers of capital when that was most needed. But now those financial safeguards are distorting business and economic behaviour. We do have potential answers in the form of things like B Corps and integrated reporting frameworks.”
Key Considerations for Future Business Models
The Building Future Business report outlines critical questions that organizations must address to transition toward more sustainable and inclusive business models:
- Identifying key stakeholders and understanding what ‘value’ means to each group
- Mapping how value flows from economic activity to stakeholders
- Aligning value creation with appropriate legal business structures
- Assessing regulatory and legislative support—and identifying gaps
- Addressing ethical considerations in bridging these gaps
- Leveraging non-regulatory guidance to shape business structures
- Evolving record-keeping, communication, and reporting systems
- Ensuring trust through strong qualitative reporting characteristics
- Establishing safeguards to protect stakeholder interests
Adapting to a Changing Economic Landscape
The report also highlights how business models are rapidly evolving in response to digital transformation. Many industries are shifting away from traditional labour- and goods-based models toward digital ecosystems driven by energy usage and highly specialized, capital-intensive technologies.
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’s driven this distortion of the decision-making process, and how we can try to redress the balance between business and society.”
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