Corporate responsibility is emerging as an issue of critical importance in Australia's business community. This inquiry has provided the committee with the opportunity to closely examine this increasingly important aspect of the corporate governance of Australian companies.
Corporate responsibility is usually described in terms of a company or organisation considering, managing and balancing the economic, social and environmental impacts of its activities. During the course of the inquiry the committee received a great deal of evidence of the way many Australian companies are employing responsible corporate approaches to manage risk and to create corporate value, in areas beyond a company's traditional core business. Some Australian companies are leading the push towards greater sustainability, and have been key contributors to global developments in the establishment of sound mechanisms to report on sustainability.
Of particular interest to the committee was evidence that many companies are integrating the consideration of broader community interests into their core business strategies, rather than treating these issues as an add-on or a side show. The committee heard that such an approach was key to the success of their corporate responsibility endeavours. Also crucial was the need to balance a long term view of company viability and profitability with a focus on short term returns. The committee noted the view that the diverse range of companies and organisations of different sizes and from different sectors meant that it was inappropriate to apply a 'one-size-fits-all' approach to corporate responsibility.
Despite evidence that Australian companies have shown a greater engagement with the corporate responsibility agenda over the past decade, the committee also heard that by international standards, Australia lags in implementing and reporting on corporate responsibility. A number of points of view were put to the committee as to whether it was necessary to adopt a regulatory approach in order to increase responsible corporate behaviour, or whether there were other ways to provide encouragement to Australian companies.