A new statutory body and criminal penalties should be used to ensure companies begin reporting on social and environmental issues properly, according to academics at the University of Glasgow.
Responding to proposals in the Company Law Review, they claim the Accounting Standards Board is too close to major companies and the Big Five to draft the detail of what should be included in social and environmental reports.
Professors Carol Adams and Rob Gray have written to the government proposing a new body be created to handle drafting reporting rules, advised by the Institute of Social and Ethical AccountAbility.
Their letter says: ‘We would strongly favour the rules on reporting which are developed by the delegated body having legal force backed by criminal penalties. This is vital to avoid situations in which companies do not report at all without any apparent recognition of this by the auditors.’
However, Kim Howells, the DTI minister recently given the mandate for corporate social responsibility, has said he does see his job as introducing more regulation for business.
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