When he was Chancellor of the Exchequer, Gordon Brown remarked that CSR today is not so much about philanthropic donation for good causes, but is rather a responsibility that companies accept towards the community around them. Indeed, the success of corporations is dependent on the existence of a healthy society, and vice versa. An educated, healthy and motivated workforce is crucial to the development of successful companies, which in turn creates jobs, wealth and innovation, improving the society’s general standard of living.

The U.K., with Stephen Timms as the CSR minister, is one of the leading international contributors to CSR. It has introduced various legal frameworks to regulate employee welfare and corporate accountability. For example, the Health and Safety at Work Act 1974 places a legal duty on employers to ensure, as far as is reasonably practicable, the health, safety and welfare at work of all their employees. A Health & Safety Executive also exists to promote compliance beyond basic levels by encouraging the production of a health and safety index for insurance companies, investors and others to gauge the performance of a company. Further, the Employment Act 2002 introduced new legislation specifically designed to give working parents more choice and support to balance childcare and work.

The U.K. government has also embraced the concept of Operating and Financial Review (OFR) in response to the Company Law Review’s recommendations. The OFR requires listed companies to provide a narrative report setting out the company’s business objectives, its strategy for achieving them and the risk and uncertainties that might affect their achievement. It will require companies to report on other matters where these are necessary for an understanding of the business; these include information about employees, the environment and social and community issues.

Such measures are admirable as corporate honesty is arguably one of the most important aspects of CSR. Consumers and investors need an accurate picture of the companies which they are dealing with before any informed decision can be made. The OFR measures also aid in building a relationship of trust between corporate and social actors that is crucial to business success in the long run.

Daming is a second year law student and an associate editor of SLR.