Corporate responsibility – increasingly important ?
There is growing worldwide impetus, especially bearing in mind the excesses of the last decade, for corporate accountability and corporate responsibility and for this responsibility, notwithstanding the overall limited liability and separate entity status of companies, to have legal implications on directors if flagrantly ignored.
A prime example of the above will be the Bribery Act, which will finally come into effect this summer, and which will potentially make business owners and directors criminally and civilly personally liable.
Another example, which has been scarcely reported to date, is section 172 of the Companies Act 2006, which specifies directors should have regard to environmental and social issues in their decision making. Aside from possible legal implications, big corporate do seem to be taking these responsibilities more seriously, whether for legal liability reasons or reputational reasons. This can only be a good thing, save where compliance is seen as creating endless corporate social responsibility mission statements and lengthy, meaningless policies and procedures. Action, not words is required.