What about small businesses – isn’t this a huge burden for them?
Many of the UK businesses we are concerned about are large companies with an international reach. These companies, rather than small UK businesses, are most likely to be affected by the changes we are seeking to company law.
The proposed requirements would also be proportionate to the size and scale of the company. Most of the impacts we would like to prevent arise through the activities of large, economically significant companies. The requirements to monitor and manage these issues will be much simpler by virtue of their size. An obvious parallel can be drawn with accountancy procedures. If you're a small firm, the statement of your accounts is much easier to prepare than if you're a multinational corporation with an office in 85 countries.
Throughout the proposed UK Company Law Reform Bill there is little distinction made between large and small businesses. The Government may need to look at ways of help smaller companies implement all the requirements and would like to see the government ensure that the necessary information and training is made available to the directors of SMEs.
However even smaller companies can take some simple steps to monitor their impact. Traidcraft is a medium sized company which successfully monitors its social impact and still remains profitable.
