Debates, Models and Practices Across Government, Law and Business
Chapter 7: Recasting UK Corporate Law for the 21st Century
OVERVIEW Today, corporate social responsibility goes far beyond the old philanthropy of the past – donating money to good causes at the end of the ﬁnancial year – and is instead an all year round responsibility that companies accept for the environment around them, for the best working practices, for their engagement in their local communities and for their recognition that brand names depend not only on quality, price and uniqueness but on how, cumulatively, they interact with companies’ workforce, community and environment. Now we need to move towards a challenging measure of corporate responsibility, where we judge results not just by the input but by its outcomes: the difference we make to the world in which we live, and the contribution we make to poverty reduction. – Gordon Brown, as UK Chancellor of the Exchequer (subsequently Prime Minister)1 The most extensive overhaul of UK company law for more than a century is pregnant with potential CSR implications for CSR actors in the UK and beyond. The landmark Companies Act enacted in late 2006 embodies the UK Government’s adopted policy of ‘enlightened shareholder value’ (ESV). It legislatively enshrines for the first time in UK corporate law a formulation of directors’ duties that also offers an overarching structure and matrix of factors to guide boardroom decision-making. In particular, it makes the crucial triumvirate of directors’ duties, business risk management and corporate reporting more explicitly long-term, relational and stakeholder-sensitive, while ostensibly anchoring these developments in a reorientated notion of shareholder value. It also marks...
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