The UK Government has conducted a consultation on reforming corporate governance, and we’ve ensured members’ views have been included in the feedback.
Mirroring recommendations made in our Beyond the Perfect Storm: The Corporate Sustainability Challenge report, we say that corporate sustainability must to be placed at the heart of the Government’s proposed reforms if they are to succeed.
We are strongly calling for changes that look beyond financial and reporting requirements. They must also include environmental, social and wider economic factors.
Our key recommendations say:
i) Reform of corporate governance is an important opportunity to build and enhance public trust in companies.
ii) Current corporate governance practice places undue emphasis on short-term financial performance, to the detriment of long-term decision making in companies.
iii) Corporate sustainability needs to be placed at the heart of the Government’s reform of corporate governance. Companies have a critical role to play in enhancing economic and social value in a way that is low carbon, resource efficient, enhances natural capital and respects human rights.
iv) Greater accountability to society is needed through enhanced corporate transparency and directors’ accountability. This approach needs to be reflected in the way that Boards engage with employees and stakeholders, in executive pay awards, and in the way that companies report.
v) Underpinning transparency and accountability safeguards need to apply equally to public and private companies; effective corporate governance should not be differentiated on the basis of company ownership structure.
Don’t forget to download your own free copy of Beyond the Perfect Storm: The Corporate Sustainability Challenge for the full context. DOWNLOAD
CLICK HERE to read IEMA's news release Sustainability “Critical to Rebuilding Public Trust” in Business, Says IEMA