The corporate manslaughter bill has been a long time in consultation, though the unions remain disappointed it does not create a duty to promote health and safety. It does however make explicit the duty of directors to consider wider circumstances.
Little noticed in the dog days of the last Parliament were two draft bills that will significantly clarify the responsibility of company directors. The corporate manslaughter bill has been a long time in consultation, though the unions remain disappointed it does not create a duty to promote health and safety. But it does make it easier to prosecute individual directors, which should concentrate their minds on the 300 or so people who die at work. Almost as long gestating has been the next instalment of company law reform. Presented as deregulation, it is the first-ever statutory definition of the duty of company directors. The primary duty remains to shareholders as a whole, so this certainly isn’t revolutionary stakeholder democracy. But now (where relevant and reasonably practical), directors can explicitly think long as well as short term and can consider the interests of employees, the impact on the community and the environment.
This codifies rather than changes the current law, but it makes Coporatexplicit the duty of directors to consider wider consequences, where it is in the long-term interest of shareholders and, of course, relevant and reasonably practical. This is the win-win case for CSR written into law. It is a highly significant development in personalising for directors what is too often seen as a theoretical, optional ‘do-gooding’ concept, to be dealt with exclusively by their CSR department.
Corporate Citizenship Briefing, issue no: 81 – April, 2005
COMMENTS