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| This Issue Feature Article: Corporate Social Responsibility Company
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Corporate Social Responsibility The
issue of Corporate Social Responsibility/ Accountability has evolved from
the various corporate disasters which have emerged over the past twenty
years and contrary to popular belief is not confined solely to
corporations in the United States of America as illustrated by the recent
requirement for 750 Chief Executives to sign a declaration of ethical
behaviour in their corporate accounting practices. The United Kingdom,
whilst operating a slightly different auditing system for financial
accounts has suffered its own share of serious lapses. Corporate Social Accountability is an attempt to establish voluntary codes of conduct for mainly corporations but ultimately all organizations by which they demonstrate the operation of both ethical and transparent business practices in the best interests of all stakeholders. In addition the approach of “Best Value” in the public sector is intended to provide a similar assurance but without the corporate identity. The
approach of CSA is based upon the identification, evaluation and control
of the range of business risks within a framework of continuous
improvement, an identical approach to the plan, do, check, act cycle now
established for all management systems. As stated the approach is
currently based upon the establishment of
“voluntary” codes of conduct but already this approach is being
questioned in the USA following Enron and Worldcom and a number of
countries have begun to establish legal requirements, i.e. Singapore. The
rapid growth in multinational corporations, globalisation and
telecommunications has highlighted the weakness of a solely national
approach and the requirement for global coordination. The prominent
international organization involved with this development is the
Organization for Economic Co-operation and Development which following a
Ministerial meeting on the 27th and 28th April 1998
established the following Principles in order to assist both Member and
non-Member governments; I. The rights of shareholders. II.
The equitable treatment of shareholders. III.
The role of stakeholders in corporate governance. IV.
The role of stakeholders in corporate governance. V.
Disclosure and transparency. This
was followed in June 2001 by the publication “the OECD Guidelines for
Multinational Enterprises” with the aim of identifying the
“chapters” which are to be considered by multinational enterprises in
providing the assurances expected by stakeholders. The criteria identified
in nine sections is intended to “encourage the positive contributions
that multinational enterprises can make to economic, environmental and
social progress and to minimize the difficulties which their various
enterprises may give rise.” Currently the document has 33
signatories. In
July 2001 the European Union published a Green Paper outlining their views
on an approach to the requirements corporate social responsibility which
was followed in February by an announcement that a study has been
commissioned of the 43 various voluntary codes currently in existence in
throughout Europe. The study will attempt to identify a coordinated
approach which assists companies and investors within the European Union
to operate the overall requirements. In
the United Kingdom following the earlier Cadbury, Hampel and Greenbury
Reports on corporate management the “Turnbull Approach” was published
in September 1999 and is intended to provide an approach which balances
the position between stakeholders and corporate behaviour in the rapidly
changing environment of multinational corporations and globalisation. The
future for corporate governance will continue to evolve from the
development of both general and sector specific guidelines, which are
based upon a new role for modern “standards”, effective auditing and
reporting in the corporate sector. These various requirements will, in all
circumstances be based upon the identification and control of the business
risks through a process of continuous improvement. A number of different protocols and approaches currently
exist for both developing and auditing performance measurement criteria
including the ICAEW Internal Control guidance, the recent BSI publication
and Social Accountability 8000 published in the United States in 1997. Health
and safety represents a significant risk factor in every business activity
as recently demonstrated by the imprisonment of a company director for
eighteen months in England and the large increase in Employee Liability
premiums or even, in specific instances, the removal of compulsory cover
and therefore the closure of undertakings. Two important factors are now
apparent, firstly the establishment of the requirement in every
undertaking for an auditable risk based approach to all management systems
focused upon continuous improvement. Secondly the realization that
insurance alone will not provide effective security in the future as it
may not always be available from insurers or if it is be available at an
affordable premium. The
closer integration of the three issues of corporate, civil and criminal
liabilities and their effective management by every organization is
clearly apparent and highlighted in the risk assessment approach of health
and safety management. References. OECD – The OECD Principles of Corporate Governance, (April 1998.)OECD – The OECD Guidelines for Multinational Enterprises, (June 2001.)EU
Green Paper – Promoting a European framework for corporate social
responsibility – A Green Paper (July 2001). Turnbull – No
Surprises – The case for better risk reporting published by The
Institute of Chartered Accountants in England and Wales, (1999).
Internal Control – Guidance for Directors on the Combined Code published by the ICAEW (September 1999).PD
6668:2000 - Managing Risk for Corporate Governance by Mike Robbins and
David Smith published by the BSI. (2000) SA 8000 Social Accountability 8000 published by Council on Economic Priorities Accreditation Agencies CEPAA (October 1997.) by
Stephen Fulwell Convictions of Company Directors The following extract of convictions of Company Directors and Business Owners for Manslaughter are from The Centre for Corporate Accountability's website. In their own words "The list of acquittals is probably more interesting. Death of Lee
James Smith in November 1999 In August 2001, English
Brothers Ltd, a Wisbech based construction company, pleaded guilty to the
manslaughter of Bill Larkman, a gang foreman, who died in June 1999 when
he fell over eight metres though a fragile roof to his death. The
prosecution had earlier accepted a plea of 'not guilty' from Death of Michael and Carl Redgate in July 2000 In April 2002, Brian Dean, former owner of Brian Dean Demolition and Civil Engineers, was convicted of the manslaughter of two of his employees, Michael Redgate (46) and his son Carl (18), who died in July 2000 when a kiln collapsed on top of them. Stoke on Trent Crown Court heard that the two men were sent to demolish the disused kiln without proper instruction and with no previous experience of kiln demolition. In addition, Brian Dean had told the two men to cut vital steel supports. Brian Dean received an 18 month prison sentence. To visit their site; http://www.corporateaccountability.org/manslaughter.htm Corporate
Governance Links
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