A social system that gives the greatest power and highest social positions to people with the most ability. 
In a business context, a meritocracy is a community in which leadership is based on capability. Where people are positioned and recognised because they have the right character, skills and behaviours, not because they fit any gender or ethnic stereotype. The challenge for many joint stock corporations is the overwhelming bias towards the promotion of privilege and entitlement, driven by greed and ego. We might call this a form of corporate aristocracy and this certainly chimes with the debate around boardroom pay.
A meritocratic business offers a truly diverse, engaged and inclusive workforce. Responsibilities are based on talent, and leadership reflects a healthy balance of age, gender and ethnicity. People are hired for their character and skills. These in turn are nurtured and developed so that every colleague is well equipped to fulfil their responsibilities, ultimately leading to a more capable, effective, respected and inclusive business that attracts and retains the best customers and colleagues. The most successful businesses in the twenty-first century will not be led by a narrow aristocracy of white, middle-aged men but by a diverse and vibrant community of people that reflects our global village.