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Companies Bill [Lords]

That is entirely up to the official Opposition, as my right hon. Friend knows. I was reflecting on the fact that there is a great deal of interest in these matters outside this place. Therefore, although we should not judge the quality of an issue on the size of the postbag on it, it is right that we recognise the scale of interest and concern and reflect that on the Floor of the House on Report, as we did in Committee. I therefore reiterate my welcome for the progress that the Government have made—and widely supported elsewhere—in respect of this first-ever statement in statute that company directors, in fulfilling their primary duty to promote the interests"““of the company for the benefit of its members””" should have regard to the six factors listed in clause 173 and new clause 4. Those factors include"““the interests of the company’s employees””" and"““the impact of the company’s operations on the community and the environment””." That is the first ever codification, and placement in statute, of duties around the concept of corporate social responsibility. That is, indeed, progress. It would be remiss of us, however, not to take this opportunity on Report to seek to ensure that what we end up with is the best outcome—one that is pro-business and at the same time socially and environmentally responsible. New clause 4 follows clause 173 closely, but substitutes ““have regard…to”” with ““must endeavour to””. The reason for that is clear. An examination of the ““Shorter Oxford English Dictionary”” reveals that ““endeavour”” means"““To exert oneself…To try””" or"““make an effort for a specified object; to attempt strenuously””" to do something. On the other hand, to have regard to something is to give attention or consideration to it. Whereas ““have regard…to”” is a subjective test—a director can say that he or she has thought about the six secondary duties listed in clause 173 and new clause 4, and may or may not have done more about them—““must endeavour to”” is an objective test, requiring some evidence of having sought to abide by those duties before deciding whether it was in the best interests of the company so to do.