Rewarding Virtue: Effective Board Action on Corporate Responsibility
- Date published
- November 2005
- ISBN
- 0-9546705-2-3
- Price
- Free
- Rewarding Virtue executive summary [364kb PDF]
Boards have responsibilities for both corporate governance and corporate responsibility. But it is not always clear how these responsibilities overlap. Rewarding Virtue is a joint report produced by Busines in the Community, Insight Investment and FTSE Group which outlines the challenges boards face in providing effective governance of corporate responsibility.
This publication is essential reading for board members and corporate responsibility practitioners and aims to provide guidance for effective board action on corporate responsibility.
What should boards do to ensure companies behave responsibly, and why? Both corporate responsibility and corporate governance have climbed the corporate agenda in recent years. But there has been little consideration of how these two areas interrelate or about the specific board contribution to corporate responsibility. Both the Combined Code on Corporate Governance and the new Company Law Reform Bill give directors duties related to corporate responsibility. This report outlines the challenge boards face in fulfilling them, and the actions they can take in order to do so.
The report was produced following consultation with some 40 directors and company secretaries of Britain’s biggest companies.
Stephen Howard, managing director of Business in the Community, said that this report "shows that corporate responsibility is not an optional extra. Principles of honesty, care, fairness and accountability are an essential part of long-term business success. The more effective boards can be at delivering corporate responsibility the more trust and freedom business deserves from its stakeholders and regulators.”
The report recommends that boards should:
- Set values and standards for the business
- Think strategically about corporate responsibility in the context of market pressures
- Be constructive about regulation, delivering self-regulation and supporting government intervention to correct market failure
- Align performance management, rewarding responsible success over the long-term
- Create a culture of integrity, setting the right tone at the top and cultivating the right values in the corporate culture
- Use internal control to secure responsibility, safeguarding standards with robust audit and control systems.
For a hard copy of the Full Report, please contact Dawn Tomlinson or tel: 0207 566 8793
