The parliamentary committee report looking at corporate social responsibility (CSR) in the wake of the James Hardie asbestos issues has recommended that institutional investors use their power to have companies amend the way they pay “directors, executives and managers” to include performance pay for meeting longer term CSR goals. 

Fortunately, the committee has not recommended changes to current laws, saying that there is enough in the current legal framework for companies, their directors and managers to have CSR legal liability.  Notwithstanding this, however, they have asked the ASX to require companies report their “top 5” sustainability risks, with an accompanying discussion on how the business is managing these risks.

If investors took the committee’s report to heart, what would pay for long term CSR look like?

Details of the parliamentary report can be found HERE. 

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