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Australian Parliamentary Inquiry into Corporate Social Responsibility

July 20th, 2005 · No Comments

aph.gifDo companies offer the world anything except products and pollution? Should they offer more? Or less?

“Corporate Social Responsibility” (CSR) and “Triple Bottom Line” (TBL) attempt to measure the contribution companies make (positive and negative) to their communities.

While these concepts have been around for a few decades, application by large organisations has only started taking place in recent years.

I have my reservations about these concepts. While the motivation of people who advocate them is often very positive, I find the implementation of CSR / TBL is often cynical and off the mark. Rush Mottling’s recent article on CSR may give you a sense of its limitations.

Well, guess what? The Australian Parliament is holding an inquiry on this very topic, so watch this space as my submission is knocked together.

Here are some details on the inquiry…

Below are the Terms of Reference for the inquiry into corporate responsibility. In italics you will note my plain-English translations. Please contact me if you feel the translations need a tweak.

The Committee will inquire into Corporate Responsibility and Triple-Bottom-Line reporting, for incorporated entities in Australia, with particular reference to:

a. The extent to which organisational decision-makers have an existing regard for the interests of stakeholders other than shareholders, and the broader community.

In the execution of their duties, do company directors care about anyone but their shareholders? If yes, how much?

b. The extent to which organisational decision-makers should have regard for the interests of stakeholders other than shareholders, and the broader community.

How much should company directors care about stakeholders or the broader community?

c. The extent to which the current legal framework governing directors’ duties encourages or discourages them from having regard for the interests of stakeholders other than shareholders, and the broader community.

Do current laws punish or reward company directors for considering people who aren’t shareholders in their decisions?

d. Whether revisions to the legal framework, particularly to the Corporations Act, are required to enable or encourage incorporated entities or directors to have regard for the interests of stakeholders other than shareholders, and the broader community. In considering this matter, the Committee will also have regard to obligations that exist in laws other than the Corporations Act.

Should company directors be punished for not considering people who aren’t shareholders in their decisions?

e. Any alternative mechanisms, including voluntary measures that may enhance consideration of stakeholder interests by incorporated entities and/or their directors.

How can we suggest to company directors that they consider people who aren’t shareholders in their decisions? Should we bother making a suggestion if we’re not going to give it teeth?

f. The appropriateness of reporting requirements associated with these issues.

Should companies attempt to measure the contributions (both positive and negative) to society and our environment?

g. Whether regulatory, legislative or other policy approaches in other countries could be adopted or adapted for Australia.

Are there any countries already making companies report their social and environmental contributions? Perhaps we can save a bit of time and just photocopy bits of their laws?

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