Monitoring: Firms may have to provide human rights information
Tucked away in a consultation paper last month from the Business Department is the suggestion that annual reports should include ‘information about human rights issues’ affecting the business.
All the signs are that Ministers think this is a splendid idea, despite possible accusations that it has the potential to become one of the most entangling pieces of red tape ever devised.
The Department is consulting on changes to ‘narrative reporting’ by companies, the part of annual reports other than the bare figures for profits, losses and so on. Some of the proposed changes have been well trailed, not least the requirement that listed companies should report the proportion of women on their boards.
It is well-known also that Ministers want clear information published on executive pay and on how it relates to company performance. Even the perhaps more alarming requirement that directors describe how social and environmental considerations ‘relate to their business model and strategy’ is not new. But the suggested requirement to report ‘material human rights issues’ may surprise many directors.
While there have been criticisms of many British companies, such as those in extractive industries, for ignoring human rights abuses in areas where they operate, the requirement could leave them open to legal challenges on matters over which they have no control.
The consultation paper asks for views on whether company law should contain an explicit requirement for firms to include information in their report about human rights issues ‘to the extent necessary for an understanding of the development, performance or position of the company’s business’.
Taken from: http://www.thisismoney.co.uk/money/news/article-2044345/Now-bosses-need-worry-human-rights-monitoring.html#ixzz1ZpRlEIxd