In recent years the drive to improving corporate behaviour has prioritised regulation. But, as Australia's business community knows well, corporate regulation has its limits. Perhaps surprisingly, Labor agrees. The next generation of strategies to encourage more responsible corporate behaviour need to move beyond a regulation-first mindset.
The best thing government could do to enhance corporate responsibility is find ways to help businesses bring it into the core of their operations. It is time we developed a broad policy framework to achieve this, one that harnesses the drivers of business behaviour.
The need for this approach by government goes beyond recent corporate collapses, the behaviour of errant individual directors and the impact of the James Hardie Industries asbestos fiasco. It reflects a growing community awareness of social exclusion and environmental degradation, yet also recognises that our corporations are critical to our future prosperity. Australians expect companies to reassess "how" they make their profits and in doing so, seek to increase the related benefits and minimise the downsides.
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