The purposeful company task force says companies driven by a vision of their role in the world outperform those that do not, and advocates for Britain to make it much easier for them to flourish than at present.

Its report, which has been included in evidence to the current green paper consultation on corporate governance, argues that directors should be required to report on how they fulfil their legal obligations to ‘have regard’ to all stakeholders. Company reporting should be overhauled to go behind financial assets and more effectively communicate companies’ strategic intent and value to shareholders. Timely and disaggregated national statistics on intangibles should be reported.

The taskforce wants the government to formalise alternative models so that companies can choose a corporate form which best reflects their purpose, strategy and business model.

It also wants the asset management industry to be repurposed. Asset managers should state and have certified their purpose, in particular how they promote the long-term interest of the companies they invest in and the savers they invest for. They should also publish metrics on their stewardship activities.

In addition, executive pay should be more simplified and aligned to the long-term. All companies should produce a Fair Pay Report, outlining their approach to pay fairness throughout the organisation.

Others among the report’s 22 recommendations include the suggestion that regulatory obstructions to the creation of engagement by large independent shareholders – blockholders – should be removed. Voting with borrowed stock should be limited.

The group also suggests the default pension fund allocation could be set to apportion a given percentage towards purposeful companies, creating a pool of up to £100 billion for such investment.

Will Hutton, chair of Big Innovation Centre steering group and co-chair of the purposeful company taskforce, said: ‘The evidence is clear, companies with a declared purpose, adhered to by their leaders and understood by their employees, perform far better over time than their less purposeful peers.

‘The practical reality is that our economy is missing a huge opportunity the longer that this issue isn’t addressed. Britain must create innovative, purposed capitalism populated by purposeful companies. Now is the moment to begin the journey.’

Hywel Ball, EY’s managing partner for assurance, UK & Ireland, said: ‘Business needs to start measuring and reporting on the right things, to help bridge the trust gap with the public and renew businesses “social contract” with society.

‘Intangible assets such as culture, intellectual property and human capital, typically account for around 50% of a company’s value but are largely absent from corporate reporting. These key components of an organisation’s value are also increasingly important for investors, who are looking for greater insights beyond a company’s governance structure.

‘It’s vital that corporate reporting continues to evolve to help companies to communicate, measure and report on the value they are creating for their stakeholders over the long term. It should be up to each individual company to define their purpose, but there needs to be the right frameworks in place to allow them to communicate it.’

The Purposeful Company policy report is here.