Jo challenges Government over "missed opportunity" in Company Law Reform U-turn

3.48.04pm BST (GMT +0100) Wed 7th Jun 2006

Jo expressed the concerns of constituents about corporate social responsibility and company reporting

Jo Swinson MP has accused the Government of watering down proposals to promote corporate responsibility.

The Company Law Reform Bill is the most wide-reaching company law debated by MPs for 40 years. Many campaigners have urged the Government to use the Bill to change the way in which British companies meet their social and environmental responsibilities, including being required to provide details of their social & environmental record in an annual report .

Speaking yesterday in the House of Commons, Jo said:

"Does [The Secretary of State] not accept that the Government have missed a huge opportunity in abandoning OFRs (Operating Financial Reviews) in favour of the business review? The business review is much narrower, applies to far fewer companies and will not be subject to the clear mandatory standards that would allow consumers to compare like with like."

After the debate, Jo added:

"The Bill originally included a requirement for companies to prepare an Operating Financial Review (OFR), which was removed following an abrupt decision by the Chancellor in March. The removal of OFR represents a huge missed opportunity for increased Corporate Social Responsibility.

"This just leaves the Business Review requirement, however this is a much watered-down proposal. There are no clear and mandatory standards to set out how companies should present their business review, so it is difficult to compare companies' practices.

"Social and environmental reporting needs clear principles and frameworks in order to allow company practices to be compared, and clear standards of operational behaviour to be established.

"A large number of constituents have contacted me about the Company Law Reform Bill, keen to see that it goes far enough to promote responsible business practices among British companies abroad. This, along with campaigns such as the Fairtrade movement in East Dunbartonshire, show that people are increasingly concerned that the goods and services they use are produced and traded ethically."

Related Links:

Jo's contribution to the debate

The Corporate Responsibility Coalition