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Business accountability 'more important than ever'
Accountancy News |
09/03/2010
The importance of business accountability through corporate reporting is more important than ever, according to a new report.
Robert G Eccles of Harvard Business School and Michael P Krzus of Grant Thornton claim that the global economic downturn has heightened the need for firms to visibly demonstrate best practice.
The writers say companies are being held to a higher standard of transparency than ever before, not only in terms of financial performance, but also over the environmental, social and governance issues which affect stakeholders.
Mr Eccles commented: "Many companies today supplement their annual report with a voluntary corporate responsibility or sustainability report.
"To have a real impact, these separate documents need to be integrated, demonstrating that the company has a sustainable strategy based on a real commitment to corporate social responsibility."
He claimed that an excessive focus on short-term financial performance "must be replaced" by a longer-term view that places firms in the hearts of their communities.
One essential mechanism for achieving this is a commitment to more integrated external reporting, Mr Eccles added.
According to the Confederation of British Industry, corporate social responsibility is best encouraged by market forces - such as the views of customers and partners - rather than through legislation.
Posted by Jon Aspinell
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