Concern over Companies Bill clause
Businesses wary over call for supply chain visibility
A proposed bill that could force businesses to disclose information on their supply chains is causing concern because of the potential investment required to update IT systems.
The House of Commons is expected to vote on the Companies Bill this week after the House of Lords rejected calls from businesses to remove the clause governing disclosure.
Nick Hudson, head of merchandising at Waterstone’s, says the retailer may have to make changes if the bill requires companies to provide information on the entire supply chain.
‘We have quite a detailed view of the supply chain, but it is more complicated when taking into account all our suppliers,’ he said. ‘We deal with 400 to 500 suppliers and may have to update systems depending on what information is required.’
Whitbread Group business systems director Mark Fabes says the bill will require the company to implement reporting tools to capture data.
‘We have good visibility in the supply chain but there is still some work to do across the group,’ he said.
AMR Research analyst Nigel Montgomery says many companies will have to invest in new data collection systems, and update enterprise resource planning systems to deliver analytical data and reporting tools.
But the Institute of Directors’ head of corporate governance, Patricia Peter, says businesses will not have to disclose confidential information prejudicial to suppliers, thanks to a compromise reached with industry minister Margaret Hodge.
‘But they will still need to invest in new IT systems, which is particularly concerning for global companies with multiple supply chains and small businesses with limited resources,’ she said.
The proposed bill
z If passed, the Companies Bill could come into force by 2008.
z The bill is intended to make firms account for business connections that affect corporate social responsibility.
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