Forum Brief: Corporate responsibility

All UK quoted companies will be required to issue a new annual corporate responsibility statement from the start of the next financial year, the trade secretary has said.

Government Response: Department of Trade and Industry

Trade and industry secretary Patricia Hewitt said: "The OFR will improve the quality of the reporting and complete the corporate jigsaw to give investors a clearer picture. It will also help the owners of the business better understand their organisations and think about how people perceive them.

"Shareholder engagement is a success when there is an informed, healthy, open dialogue between investors and business. Good companies need committed, engaged investors and good investment decisions are based upon quality information. Greater transparency will bring greater market confidence and trust, enabling companies to prosper and flourish.

"While prepared for shareholders, the OFR will also be useful to other vital stakeholders such employees, customers and environmental groups."

Forum Response: Association of British Insurers

Mary Francis, director general of the ABI, said: "The proposed regulations follow the spirit of the ABI’s guidelines on corporate responsibility disclosure, by calling on companies to report on significant issues which affect their prospects. We welcome this light touch approach, as well as the clear statement that the Operating and Financial Review should reflect the needs of shareholders. 

 

"We will of course be looking carefully at the details.  But in principle the government’s approach appears hugely preferable to one that makes detailed reporting on a broad range of issues mandatory, regardless of their relevance to the company concerned."