For immediate release
Sydney, 12 December 2006
The Australian Institute of Company Directors (AICD) supports today’s report The Social Responsibility of Corporations released by the Corporations and Markets Advisory Committee (CAMAC) that outlines suitable laws are already in place to allow directors to consider other interests.
“The report is consistent with AICD's view that, in carrying out their legal duty to "act in the best interests of the company", directors should take account a broad range of interests such as those of employees, customers and the community in which the company operates,” said Ralph Evans, Chief Executive Officer, AICD.
“Director’s understand that profit and public interest are not mutually exclusive. AICD welcomes the committee’s recognition that a balanced approach that weighs overall contribution, such as the goods and services a company provides, taxes they pay, jobs and wealth they create, and impact of broader activities, is needed.”
“AICD is pleased the committee chose not to recommend restrictive legislation or a mandatory corporate social reporting framework, which would have limited activity and imposed a substantial regulatory burden on business,” said Evans.
“Mandating reporting of social responsibility endeavours will only encourage a ‘tick-a-box’ mentality, rather than encourage companies to make innovative contributions in line with their business interests, evolving shareholder and community expectations.”
“Australian companies need the flexibility to choose the corporate social responsibility initiatives that best suit them, without being restricted by prescriptive frameworks that deliver a ‘one size fits all’ type outcome.
“Disclosure of corporate social responsibility practices should be considered as part of the overall governance process.”
Mr Evans said many Australian companies already operate as good citizens by implementing corporate social responsibility initiatives relevant to their operations or circumstances.
For media inquiries please contact Rachael McCavanagh, AICD, on (02) 8248 6645 or 0422 864686 (Media Advisor)