FINANCE & SPEND
Moving accountability to the boardroom Perhaps the most significant cultural shift in the legislation is the requirement for board-level transparency. Working closely with the Federation of Small Businesses( FSB), the government will mandate that boards or audit committees of persistently late-paying large companies publish explanations for poor performance and the specific actions they are taking to address it.
FSB Policy Chair, Tina McKenzie, argues that this will force a fundamental change in corporate behaviour:“ Late payments are a blight on our economy, so FSB is pleased to have worked in partnership with the Government to deliver the toughest legislation in the G7. The new laws will finally bring a stop to big businesses using their small suppliers as sources of free credit.
“ For the first time, audit committees and boards will question and challenge poor payment performance, publish it in annual reports for all to see and put it right. Paying in 60 days is not prompt- but strengthening that as the absolute maximum cap after years of dithering is a good step towards encouraging payments in 30 days across all supply chains. Improving the Small Business Commissioner’ s powers will also help, mandating CEO’ s of Britain’ s poor payers to take the phone call.
“ This is real progress, and we’ ll keep working with the Government to make sure new laws are brought in as soon as possible.”
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