Advice: Sustainability to be included in Corporate Governance Code
10 november 2008
Our study offers various options for increasing the CSR value of these companies through corporate governance adjustments.
There was no consensus among the interviewees whether CSR should be linked more closely to corporate governance. But there is widespread agreement that the importance of social aspects of entrepreneurship is set to increase.
Five actors are central in answering the research question: the Management Board, the Supervisory Board, institutional investors (notably pension funds), the General Meeting of Shareholders and the Dutch government.
Chapter 2 shows that these actors fulfil responsibilities and tasks relating to social aspects of entrepreneurship to a varying extent.
Chapter 3 outlines five methods that could be used to give CSR greater emphasis in corporate decision-making. Two of these, legislation and separate codification, are dismissed as unsuitable by almost all parties involved. Two of the three other methods concern additions to the current text of the Dutch corporate governance code. They differ from each other in terms of the place assigned to CSR in the code: either exclusively in the preamble or in the provisions themselves. The starting point in both methods is that the company provides insight into its CSR policy, including an explanation of and openness about any decision not to implement CSR policy. The last method discussed involves the issuance of a “CSR Guidance Manual” containing ‘good practices’ for CSR and corporate governance.
We believe that linking sustainability is crucial for taking sustainability to a next level of implementation. Therefore we hope that our work will contribute to the development of an integrated management approach of sustainability and corporate governance.
It is good to note that the advice of the committee has been accepted by Mr Heemskerk and the recommendations have been sent to Parliament.
(The report is in Dutch, but it includes an English summary
A radio interview with both Burgmans and Heemskerk is available here)
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