A short history of Corporate Reporting
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In the late 18th century a Scottish philosopher and economist named Adam Smith wrote numerous articles on these subjects, his magnum opus being The Wealth of Nations in which he espoused the concepts of free trade and the free market on which the classic market economy was based.
Smith’s principles were borne out. By the early 19th Century, new technology saw jobs being created and living standards improved. Unchecked by regulation businesses flourished and industrialists in Europe and the USA amassed huge fortunes. However few of these wealthy new industrialists were concerned about the wellbeing of their employees, society or the environment. The appalling conditions under which people worked were documented in the novels of Charles Dickens and inspired radical theorists such as Karl Marx and Friedrich Engels to write about new concepts on labour, socialism and communism.
By the start of the 20th century, powerful corporations suffered a backlash against their widespread exploitation. Labour unions were formed, giving a voice to the workers, and governments began to assume more responsibility for welfare and infrastructure, gradually introducing anti-trust legislation.
In the 1950s, emerging ‘consumer power’ saw companies start taking a new interest in the social and human aspects of their markets – it was at about this time scientists and environmentalists started noticing some worrying changes to the environment.
The 1960s saw a shift in attitudes towards government and business. In 1962 Professor Milton Friedman, Nobel Prize-winning economist, published his controversial Capitalism and Freedom. In it he makes the case for economic freedom as a precondition for political freedom.
The 1980s and 1990s saw communism collapse, globalization emerge and the information revolution change the way the world did business. As globalization intensified, so did environmental awareness and the emergence of responsible business practice. Key developments include: the Brundtland Commission, the formation of the World Business Council for Sustainable Development, and the United Nations Global Compact.