Companies Act becomes law

The Act represents the biggest shake up in company law in 150 years and will for the first time require the largest listed companies to report on their social and environmental impacts, as well as obliging company directors to take stock of their business activities' effects on employees, communities and the environment. But campaigners are concerned that the legislation lacks the teeth to make business live up to their obligations, and fails to ensure that they can be held to account for violating human rights and their impact on the environment and the wider society. “This gets us closer to the goal of corporate accountability" said Jenny Ricks, corporates campaigner at ActionAid "But it's a first step. Corporate accountability is still seen as an add-on to the functioning of the economy. If the government is to live up to its commitment to fighting poverty and climate change, we need to make sure that ethical business practices become central to trade, investment and development policy – and that strategy is joined up across government.” Despite promises from government to draw up guidance for directors on how comply with new reporting rules; companies haven’t been given any official help to meet the Act’s requirements. The Corporate Responsibility (CORE) Coalition has stepped in and created a set of guidelines for businesses to help them comply with the new requirements. These will be launched in the coming weeks. The CORE Coalition’s Hannah Ellis, pictured, said: “We’re happy to step in and offer up some help to directors so that they can work with to the new requirements. It is a little worrying though, that while we have here a first step to making business more accountable, the government hasn’t delivered the guidance to go with it.”