New proposed corporate governance guidelines fail to address important issues of  corporate social responsibility, says the Social Investment Organization in a recent brief to Canada’s securities regulators.

The brief, issued Dec. 13, 2004, is in response to revised draft national policy and regulation on corporate governance guidelines published by the Canadian Securities Administrators (CSA), Canada’s umbrella organization for securities commissions.

“Let me express our disappointment with the revised National Policy and National Instrument, says SIO Executive Director Eugene Ellmen in the brief. Ellmen said the revised proposal fails to incorporate social and environmental expectations into good corporate governance practice.

“This shows a lack of insight into the emerging understanding of corporate governance as including both financial and non-financial factors.”

The most important recommendation in the brief is that the CSA should require companies to have Codes of Business Conduct and Ethics. “On important matters of principle, such as the adoption of a Business Code, it is important for regulators to speak strongly and clearly. It is important that regulators require public companies in Canada to have a Business Code.”

SIO recommends to the CSA that they stipulate that Business Codes should have required content on companies’ social responsibility policies and compliance regarding stakeholders, including employees, customers, suppliers, competitors and investors. As well, such content should discuss sustainability issues and environmental impact.

If companies choose to exclude such content from their Business Codes, SIO recommends that the CSA require such companies to explain why they are excluding this content.

“We believe it is important for CSA to take a position on this issue of social responsibility and sustainability governance. By continuing to permit voluntary Codes, and by being vague in your expectations of corporate governance on these issues, you are continuing to mandate a general lack of awareness of these issues by corporations.”

For a copy of the brief, visit:

 http://www.socialinvestment.ca/Policy&Advocacy/CSACorporateGovernanceDec1304.doc