It seems like regulators in Australia are leaving the issue of social responsibility to markets not to government, by ruling that there is no need for a federal mandate on mandatory CSR reporting. Reporting, of course, is just one of a host of other issues involved in a CSR debate, but its uplifting to see the trust in market mechanisms (companies, stock exchanges, and consumers) to sort things out. Debate on mandatory vs. voluntary CSR mechanisms will sound all too familiar in many other economies.
There are some questions about guidelines on proper reporting procedures and while companies listed on stock exchanges may get it, others which are not listed may not. Either way, it seems the business leaders are behind the decision:
Tim Sheehy, Chartered Secretaries Australia chief executive, says tighter regulation would not make Australian companies more socially responsible. “Rather, companies with a high-performance culture will naturally embrace it simply because corporate responsibility is a good business decision.”
He also praises the committee’s recommendations for voluntary, not mandatory, sustainability reporting.
“Not only does mandatory reporting create a box-ticking, mechanical culture, but the compliance costs, particularly for small companies, would be overly burdensome. “Providing guidance and models for good reporting is a preferable approach, as it allows companies to tailor the reports to the size and nature of their business.”
Related, check out last year’s highly debated story on CSR by the Economist (subscription required).
Some thought-provoking quotes from Peter Drucker via PSD Blog.