Corporate Social Responsibility a Corporate Governance

9.2.2007

Confédération Européenne des Associations d’Administrateurs

European Confederation of Directors’ Associations, Brussels, 8 December 2006

PRESS RELEASE

Corporate Social Responsibility and Corporate Governance, Initiative report on “Corporate Social Responsibility: a new partnership”, European Parliament, Committee on Employment and Social Affairs, Rapporteur: Richard Howitt

ecoDa welcomes the initiative taken by the Committee on Employment and Social Affairs of the European Parliament on “Corporate Social Responsibility: a new partnership”.

ecoDa’s Chairman, Pierre Klees, supports article 24 of the Report stating “that the CSR debate must not be separated from questions of corporate accountability, and that issues of the social and environmental impact of business, relations with stakeholders, the protection of minority shareholders‘ rights and the duties of company directors in this regard should be fully integrated in the Commission’s Corporate Governance Action Plan”.

ecoDa believes that acting in the interests of stakeholders is a part of directors’ duties. National legislation like the recent Companies Act 2006 in the United Kingdom and national codes of Corporate Governance are increasingly urging directors to pay regard to the longer term success of the company. Taking into account the interests of stakeholders is a factor in this. The request for directors to move from a short-term to a long-term approach will improve the quality of corporate governance and should be expected to have a beneficial impact on the confidence in capital markets.

 

ecoDa is currently examining to what extent CSR could be linked to Corporate Governance and how directors should deal with it. ecoDa is not in favour of a regulatory approach as this tends to provide for minimum standards to be applied, rather than to encourage increasing levels of good practice. As long as CSR is clearly defined and concerns the companies’ missions, ecoDa is convinced that boards of directors have a key role to play through influencing and forming value preferences, which will consequently result in translating CSR values into practice.