In October 2014, the EU adopted new rules on the disclosure of non-financial information, otherwise known as corporate social responsibility (CSR) information. The new requirements bring the CSR disclosure regulation in the EU in line with the current best practices and constitute a huge step forward compared to the existing rules on the disclosure of non-financial information.This article analyses the likely impact of the amended Accounting Directive, its scope of application, what should be disclosed and how the new provisions of the Directive should be enforced. In doing so, the article compares the new requirements to current best practices and experiences, especiallyusingthe experiences withmandatoryCSR reportingin Denmarkand the experiences with corporate governance reporting in the EU. Based on these experiences, the article also makes predictions of whether the new requirements are likely to increase the quantity of the non-financial information disclosed and the consistency and comparability of the reports.
While having different starting points, corporate social responsibility (CSR) and corporate governance have developed along similar paths and today they are linked in many different ways. As a consequence of this development, CSR is becoming an integral part of corporate governance codes in the EU, and the aim of this article is to analyse the extent of this integration. It is concluded that stakeholder-related issues in particular are now part of most codes in the EU, whereas corporate governance recommendations refer less frequently to specific CSR issues. However, specific CSR recommendations are still common, so it seems that in most codes it is recognised that there is a strong link between CSR and corporate governance. Even though this link may be widely recognised, it is also clear that the existing codes show a great variety of solutions to the integration of CSR and corporate governance codes. It is shown that for CSR the codes mostly contain specific recommendations related to transparency and that other recommendations are less specific. The vagueness of the recommendations on CSR issues seems to be common to all the codes examined. This general vagueness makes CSR recommendations 'soft' and frequently open to interpretation. It is also shown that the countries whose codes are most dominant in the field of corporate governance do not seem to be at the forefront of integration of CSR in their corporate governance codes. Furthermore, an analysis of two examples of the reporting on CSR recommendations under the comply-or-explain principle shows that the adoption of this principle for CSR disclosure may not work without measures to overcome some of the shortcomings seen hitherto in the application of the comply-or-explain principle.
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