The Swirling Tides - Tomorrow’s Company 30 Years On

This month marks 30 years since we launched the RSA report   Tomorrow’s Company, the role of business in a changing world.  [i]  What difference have we made? It’s hard to tell. Nothing stands still. Success has many parents while failure is an orphan.

Sometimes the most powerful – but least shareable – evidence comes from the private gratitude of the CEO who has successfully found their way to a new approach thanks to exposure to dialogue and challenge.

Here are some of the visible changes on which we may claim to have had influence.

• The acceleration of interest in Purposeful Business

• Changes to directors duties in UK Company Law

• The world’s first investor stewardship code

• Early discussions that led to the UN Principles for Responsible Investment and the early development of the concept of ESG

• The integrated reporting movement

• A New British Standard  on Public Sector Procurement

• Development and enrichment of the concept of the board mandate

• Dialogues and partnerships across Europe, the Middle East, India and SE Asia

• New approaches to the teaching of enterprise and business in school and university

The Inquiry Team which produced the report described an inclusive approach:

Tomorrow’s Company defines its purpose in a way that inspires whole-hearted commitment to achieving goals which are shared by all those who are important to the company’s success

The report was a catalyst for some and an affirmation for others. Leaders who previously saw themselves on a lonely journey discovered that they were part of a movement.

The Inquiry Team

Some of this team were pioneers. John Neill was reinventing Unipart, applying lean principles and sharing ownership with managers and employees. Stephanie (Steve) Shirley had created an employee-owned  company led by women championing new approaches in software and IT. Some were the elder statesmen. Sir Anthony Cleaver of IBM UK chaired the Inquiry. Cadbury Schweppes was involved. Its former chair Sir Adrian Cadbury had been developing the groundbreaking report on the financial aspects of corporate governance. Asked why he wasn’t casting his report wider he would say : ‘that’s being dealt with by the RSA Inquiry. I suggest you talk to Mark  Goyder. ‘

Ebbs and flows

The inquiry  both reflected and stimulated changes in business behaviour.  Inevitably over thirty years the Tomorrow’s Company tide has swirled and risen and receded and risen again.

In 1996 future Prime Minister Tony Blair made a speech about a stakeholder economy. In 1995 Will Hutton was publishing ‘The State We Are In’. Later, with Colin Mayer and others he  created The Purposeful Company project. The 2021  report  of the British Academy Future of The Corporation project entitled Principles for Purposeful Business. ’Purpose’ had earned a capital P.

There was nothing particularly original in this approach.  It’s just that people didn’t implement it.  Why would a business not want to capture the full effort of its people? Why would it not want to be trusted by customers? Why would it not want to spread more efficiency and innovation through its supply chain? Why would shareholders not prefer to invest in companies did well at these things?

Muddled thinking about stakeholders and shareholders

Yet people, including journalists who ought to know better, still claim that directors owe their duty to shareholders. They’re wrong.  Directors are elected by shareholders to be stewards of the company and of its purpose, values and relationships. This has always been true; the inclusive directors’ duties in Section 172 of the UK’s 2006 Companies Act were intended to make this clear.  It is to the company, not shareholders that directors owe their duty.  [ii] After endless arguments I eventually developed my answer on one slide this graphic and was told by one professor of law that it summarised most of a term’s worth of lectures!  

Influencing the City

Building on the 1995 report Inquiry Team members made a bold but ultimately unsuccessful attempt  to launch a Tomorrow’s Company Investment Fund. [iii]  This was followed in 2004 with Restoring Trust – Investment in the Twenty first century. [iv]  This thread was then further developed by a report on Tomorrow’s Owners – stewardship in the twenty first Century. It was Tomorrow’s Company Research Fellow Philip Sadler who framed the issue as a matter of stewardship. This agenda truly caught the moment. Tomorrow’s Owners was published in the autumn of 2008 as the irrational exuberance and excesses of Wall Street and the City brought western capitalism to its knees and necessitated giant government rescues of major banks. The Tomorrow’s Company argument that stewardship was a crucial but neglected duty of a shareholder could not be ignored.

Championing Stewardship

City Minister Paul (Lord) Myners was impressed. He had commissioned banker Sir David Walker to undertake a review of the corporate governance of U.K. banks and got Walker to talk to Tomorrow’s Company. In his final report Sir Derek recommended that the UK initiate a voluntary code to which investor signatories would commit. Tomorrow’s Company went on to convene a group of institutional investors including BlackRock to maintain stewardship momentum. This  culminated in its 2017 report Better Stewardship.

Five years later I was pleased to see BlackRock’s CEO Larry Fink using words in his 2022 letter to CEOs that would be familiar to any Tomorrow’s Company follower.

• Putting your company’s purpose at the foundation of your relationships with your stakeholders is critical to your success.

I was less impressed to read in 2025 how BlackRock has retreated from its leadership position as it came under pressure from the re-elected President Trump. I had been warning for some time that ESG had become a lazy label.

International awareness of our work included an approach from Singaporean Ong Boon Hwee, first CEO of  Stewardship Asia. We discovered a shared commitment to the enrichment of the stewardship agenda in ways that aligned East and West. In 2019 we published ‘Entrusted: stewardship for Responsible Capitalism’ – our stewardship handbook.

The Crises Ahead

As I write the tide is, for now, receding.  Just take Jamie Dimon, boss of JP Morgan. He  proudly committed himself and American business  to a  2019 statement by the USA’s Business Round Table (BRT) saying that business existed to ‘serve all stakeholders’ (whatever that means! By 2025 he was so opposed to stakeholder accountability that he was condemning  shareholder proxy firms (who keep markets and investors informed on the ESG credentials of different companies,  as ‘cancers’.

Now AI is transforming markets and companies. I can’t yet judge the implications. I do know that only companies whose culture frees people to be creative will truly prosper in the AI age.

Meanwhile  there are two approaching crises that will again change our attitudes to the role of business in society.  One is the combined crisis of climate, biodiversity and nature. The implications for business are well described here by Lindsay Hooper and Paul Gilding.  The other is the next banking and capital markets crash, well prefigured in last week’s Economist. Both demand that business and civil society and governments act in concert to re- shape markets and regulation, just as the international signatories of our Tomorrow’s Global Company report argued back in 2007.  [v]

In time people will link the causes of these crises to our short-termist distortion of the wealth creation process , our failure to focus on the wellbeing of future generations, and our inability to make markets servants rather than masters.  Then the tide will turn again. Stewardship by investors and boards; a regulator’s focus that better aligns competition to our future needs; a celebration of entrepreneurship and business as a force for good will once again be in the ascendant, albeit hopefully without the lazy labels!

So thank you to all colleagues and supporters of Tomorrow’s Company for the impact that we continue to have. The inclusive approach to sustainable business success still lives. So do the ideals of stewardship. The most enduring companies will continue to be those which understand the human purposes of business. The task now is to progressively redesign our  capitalist system so that rewards flow to those who follow suit.

[i] I was inspired to come up with the idea of a business-led Inquiry by a lecture which RSA Chairman Charles Handy had given. Thanks are due to  Paul Barnett of the Enlightened Enterprise Academy who reminded me of this anniversary.

[ii] Philip Goldenberg, then of SJ Berwin, was company law advisor to the Inquiry and guided it and me on these issues. He subsequently played an influential part in the Company Law Review which revised and clarified the duties of a director.

[iii] Colin Maltby of Kleinwort Benson and Peter Ward, later the Founder of Telos Partners were the key initiators.

[iv] The project was chaired by Sir Richard Sykes, formerly Chair of GSK. KPMG’s Ian Barlow hosted a crucial series of introductory dialogues involving every link in the investment chain as well HM Treasury and major industry associations..

[v] The Inquiry was co-chaired by Nandan Nilekani of Infosys Technologies and John Manzoni of BP. I am particularly grateful to Nick Butler, then of BP, who helped us develop the idea.