July 8, 2005

New Quick Survey: Internal Audit and the Board

We have posted a new quick survey on how the head of internal audit interfaces with the board of directors (and who he/she reports to). Take a moment to participate in the survey near the top of our home page.

How to Navigate Tricky Confidential Treatment Requests

We have posted the transcript for the webcast – “How to Navigate Tricky Confidential Treatment Requests” – which includes commentary from the SEC Staff about its comment letter database.

More Companies Reveal Social Policies

Last month, General Electric issued its 78-page “2005 Citizenship Report,” the first of its kind for GE. Below is a Financial Times articled dated June 15th notes how more companies are revealing their social policies:

“More than half of the world’s biggest companies reveal details of their environmental and social performance, according to a KPMG survey that provides fresh evidence of business leaders’ support for corporate social responsibility.

The survey, published every three years, found that CSR reports for 2005 now cover a much wider range of issues, and that many companies also provide CSR information in their annual financial reports. Fifty-two per cent of the top 250 companies in the Fortune 500 list published separate reports on corporate social responsibility, up from 45 per cent three years ago.

George Molenkamp, chairman of KPMG’s sustainability services, said the growth of CSR reporting had proved the sceptics wrong. “When we started observing these issues, many people argued this was just a fashion that would disappear as soon as the economic situation got worse. But the economic situation has deteriorated, and still more and more companies are doing this.”

Companies have also become more generous in the information they provide. While previously most businesses disclosed only their environmental record, most now cover issues such as labour standards, working conditions and community involvement as well.

The survey, due to be released today, states: “A growing number of companies (and their stakeholders) believe that long-term business success depends not only on a healthy balance sheet but also on social and environmental performance.”

That belief has now spread to sectors that traditionally saw little reason in issuing CSR reports. Most strikingly, 86 financial services companies issued CSR reports, up from only 40 three years ago. CSR reporting rose particularly strongly in Italy, Spain, Canada and France, where the number of companies issuing such reports almost doubled. But Japan and Britain remain the countries most strongly wedded to the concept.

Businesses cited a variety of reasons for their involvement in CSR, though by far the greatest number pointed to economic considerations. “The economic reasons were either directly linked to increased shareholder value or market share, or indirectly linked through increased business opportunities, innovation, reputation and reduced risk,” the survey notes. Ethical considerations came in second place, and were cited by more than one in two companies.

A desire to motivate employees and attract new recruits was a further strong incentive, the survey said. The KPMG report is based on an analysis of the 250 top companies in the Fortune 500, as well as the 100 biggest companies in 16 countries. It was written jointly with researchers from the University of Amsterdam.”