find the latest legal job
Senior Associate - Litigation & Dispute Resolution
Category: Litigation and Dispute Resolution | Location: Melbourne CBD & Inner Suburbs Melbourne VIC
· Come work for a firm ranked in Lawyers Weekly Top 25 Attraction Firms
View details
Associate - Workplace Relations & Safety
Category: Industrial Relations and Employment Law | Location: Brisbane CBD & Inner Suburbs Brisbane QLD
· Employer of choice · Strong team culture
View details
Freelance Lawyers
Category: Banking and Finance Law | Location: All Perth WA
· Freelance opportunities through Vario from Pinsent Masons
View details
Freelance Lawyers
Category: Other | Location: All Adelaide SA
· • Qualified lawyer with a strong academic background
View details
Freelance Lawyers
Category: Other | Location: All Melbourne VIC
· • Qualified lawyer with a strong academic background
View details
Experts back current compliance laws

Experts back current compliance laws

INCREASED REGULATION will do little to encourage Australian companies to be more socially responsible, according to the peak body for governance professionals. It said last week that existing…

INCREASED REGULATION will do little to encourage Australian companies to be more socially responsible, according to the peak body for governance professionals. It said last week that existing laws will do enough to keep directors honest.

Laws that now require directors to act in the best interests of the company already allow companies to take account of the impact of their decisions on stakeholders, Chartered Secretaries Australia (CSA) said. Arguing social responsibility should not be mandated in case it becomes a mechanical exercise, a mere box-ticking, CSA chief executive Tim Sheehy said companies in a high performance culture will do it anyway.

“Companies that ignore the long term social and environmental impact of their activities and refuse to participate in an ongoing dialogue with their stakeholders are putting their long-term future at risk,” said Sheehy. He suggested this should be enough to sway them to compliance.

Freehills partner Bob Baxt defended the views of CSA, arguing that “the law already provides plenty of scope for directors to do the right thing by their company’s social and other obligations”.

“All this proposed CSR would do is simply clutter up our corporate laws with unnecessary changes,” Baxt said in an interview with Lawyers Weekly.

“By and large, I think Australian companies have shown they are run with very much a social conscience in many situations, and the courts have been very willing in certain cases to concede that broader interests are stake and need to be taken account of,” Baxt said.

It is likely that a box-ticking approach will be created if further regulation is implemented, with directors becoming very conservative in the way they behave, agreed Baxt. “Clearly directors need to be careful in running their companies, [ensuring] that they don’t ignore the interests of the primary stakeholders in the company, which is basically the members,” he said.

Directors should see that if they are short-sighted, and focus on profits alone, they are unlikely to have a sustainable business, said CSA’s Sheehy. “By contrast, pursuing a bona fide CR policy can open up value creating opportunities, build customer trust and promote innovation — all of which give a company a competitive edge and builds a strong brand in the long run.”

Many companies are already “living and breathing” the values of CR though interaction with the communities in which they operate, said Sheehy. “Indeed, many companies are already reporting publicly on their CR performance using a number of widely-accepted benchmarking guidelines,” he said.

CSA does not support the introduction of measures to make corporate responsibility reporting compulsory, it said last week. The cost of compliance for small companies in particular are too high as there is no one-size-fits-all approach.

Freehills’ Baxt said he was also concerned about the pressures placed on ASIC and whether it would be able to enforce such laws. “If you have a positive duty put in the [Corporations] Act to require directors to take account of these broad social interests, I don’t know how ASIC would ever enforce such a law. How would ASIC be able to seek to enforce a law where directors haven’t looked at the environment … or whatever other interest groups were involved,” he asked.

“If there was a case brought where someone says ‘the directors of this company haven’t been socially cognisant of their social responsibilities’, what is ASIC going to do, how is it going to enforce that?,” said Baxt.

He argued that ASIC should not be criticised in these situations. “They might be criticised for their public relations spiel, but they shouldn’t be criticised for not bringing cases when they haven’t got the evidence to bring it.”

Like this story? Read more:

QLS condemns actions of disgraced lawyer as ‘stain on the profession’

NSW proposes big justice reforms to target risk of reoffending

The legal budget breakdown 2017

Experts back current compliance laws
lawyersweekly logo
Promoted content
Recommended by Spike Native Network
more from lawyers weekly
Quentin Bryce
Oct 18 2017
DV has worsened in a generation: Quentin Bryce
Former governor-general of Australia Dame Quentin Bryce AD CVO has spoken of her deep distress about...
Lawyers
Oct 18 2017
Academics entertain the idea of law without lawyers
Researchers from Queensland will explore some of the most disruptive trends tipped to transform the ...
Please, Continue (Hamlet), Melbourne Festival
Oct 16 2017
Hamlet suffers slings and arrows of top Victorian barristers
Victorian judges and barristers have performed the unique play Please, Continue (Hamlet) at the Melb...
APPOINTMENTS
Allens managing partner Richard Spurio, image courtesy Allens' website
Jun 21 2017
Promo season at Allens
A group of lawyers at Allens have received promotions across its PNG and Australian offices. ...
May 11 2017
Partner exits for in-house role
A Victorian lawyer has left the partnership of a national firm to start a new gig with state governm...
Esteban Gomez
May 11 2017
National firm recruits ‘major asset’
A national law firm has announced it has appointed a new corporate partner who brings over 15 years'...
opinion
Nicole Rich
May 16 2017
Access to justice for young transgender Australians
Reform is looming for the process that young transgender Australians and their families must current...
Geoff Roberson
May 11 2017
The lighter side of the law: when law and comedy collide
On the face of it, there doesn’t seem to be much that is amusing about the law, writes Geoff Rober...
Help
May 10 2017
Advocate’s immunity – without fear or without favour but not both
On 29 March 2017, the High Court handed down its decision in David Kendirjian v Eugene Lepore & ...