Conservatives back responsibility dealsApril 2008
A Conservative government in the UK would amend the combined code on corporate governance to require boards to ‘seriously consider their ethical standards’.
The report of the party’s working group on responsible business says the code places insufficient emphasis on corporate responsibility and that amendment would encourage ‘enlightened self-interest from business’.
It also recommends that the code require remuneration committees to take account of social and environmental considerations when setting directors’ annual bonuses and incentive plans.
One suggestion made last year – the creation of ‘social emissions trading’ schemes modelled on carbon emissions trading – has been dropped. But the centrepiece remains government-brokered ‘responsibility deals’ agreed with business on obesity, binge drinking, climate change and waste.
A responsibility deal on obesity, for instance, might see companies modifying ingredients and amending advertising practices, while schools provide better food education and the government mounts an information campaign.
Corporate progress might be measured by an index, with the best performers rewarded with ‘a light regulatory touch’.
The Party has already signalled that it will accept the responsibility deals as official policy, and has said it will broker the first on packaging and waste if it comes to power.
The six-strong working group, led by shadow corporate governance minister Jonathan Djanogly, included Tom Rotherham, head of corporate responsibility at the consultancy Radley Yeldar, and Richard Hamilton of KPMG.
Other recommendations are that a Conservative government should:
require an advisory vote at AGMs on the sustainability report
strengthen requirements on investors to disclose their policy on SRI by forcing them to report annually on actions taken
provide more resources to the UK’s National Contact Point for complaints that British companies are failing to live up to the OECD guidelines for multinationals
look at using government procurement contracts to encourage companies to join private voluntary networks such as the Ethical Trading Initiative.
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