The UK government’s decision to abolish the Operating and Financial
Review (OFR) has seriously damaged its already shaky relationship with
non-governmental organizations active in the corporate social
responsibility field.
Amnesty International, Christian Aid and WWF are among more than 30
leading UK NGOs that have written a letter to chancellor of the
exchequer Gordon Brown attacking the move as a ‘step back’ and
detrimental to civil society’s trust in the government’s CSR policy.
ActionAid, one of the signatories, said the groups were incensed by the
government’s ‘backtracking on its previous commitments to promote
corporate accountability’.
Eighteen months ago, the relationship sank to an all-time low when more
than 20 NGOs refused to take part in consultation on a draft
international strategy on CSR in protest at the ‘slow progress’ being
made (EP6, issue 3, p3).
Deborah Doane, chair of the Corporate Responsibility Coalition, to
which several of the signatories belong, said the current crisis was
even worse. ‘NGOs have been severely bruised by this, and the letter
reflects that,’ she told EP. ‘The levels of trust have been completely
broken and I think you’re going to find a lot of NGOs becoming more
militant.’
Relations are unlikely to be improved by government procrastination
over the appointment of an advisory group on corporate responsibility
that was to have brought NGO representatives into the policy debate.
Former CSR minister Nigel Griffiths announced the formation of the
advisory group a year ago, but the Department of Trade and Industry
last month confirmed to EP that the group has not been set up, and that
current CSR minister Malcolm Wicks has not even looked at the matter.
In contrast to the bitter words from NGOs and some investors, Business
in the Community, which has long supported the voluntary approach, said
companies should now ‘shift focus back onto [voluntary] mainstream
corporate responsibility reporting.’
The Financial Reporting Council has confirmed that it will look into
the idea of including a requirement to produce OFRs as part of its
combined code on corporate governance, but told EP any such move was a
long way off, if it happened at all. Meanwhile, the DTI has begun
consultation until 15 February on a new regulation ordering companies
to produce a ‘Business Review’ in compliance with the EU Accounts
Modernisation Directive. The DTI confirms that the reviews will be
‘less prescriptive’ and will not have to be audited, as the OFR would
have been. The reviews also do not have to contain forward-looking
comment on performance or strategy, which was the prime original
purpose of the OFR.
