Corporate Responsibility - the role of the board
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1 Corporate Responsibility - the role of the board A guide to corporate responsibility and the work of the board, by the Confederation of Norwegian Enterprise (NHO)
2 Has the board prioritised the most areas s work on corporate responsibility?? Has the board discussed and approved objectives that will apply to the most areas?? Has the board ensured that management defines measures that can help in achieving the objectives?? Has the board adopted guidelines corporate responsibility in the?? Does the board follow up to ensure that the measures are implemented and the objectives achieved?? Does the board ensure that the s guidelines corporate responsibility are communicated to all employees?? Does the board regularly ask good critical questions relating to social issues when commercial decisions are taken??
3 3 When our activities on corporate responsibility are working as they should, we have a good overview of risks relating to political, social and environmental issues. Problems are prevented or solved and business opportunities open up. We are a whose employees are proud of working here and motivated to work us.? What is the board s role in developing a socially-responsible?
4 4 Examples of some of the advantages of consciously working on corporate responsibility: Reduced costs as a result of increased resource and energy efficiency (heating, transport, waste handling, recycling, ecofriendly materials & production processes). Easier to attract and keep well-qualified employees. Increased motivation, pride and satisfaction among the employees (could reduce sick leave). Better reputation and less risk of negative coverage in the media and from pressure groups. Better relations with customers - more attractive as a supplier. Better standing with consumers who are concerned about goods and services being produced in a proper and sustainable manner. New business opportunities in ethical and green products. Better prepared future legislation. Better terms from investors and lenders who are concerned about corporate responsibility. Can qualify submission of tenders. The board and the s corporate responsibility The board has overall responsibility s corporate responsibility. The board is responsible s strategy corporate responsibility, determines the guidelines and has a supervision and control responsibility. This guide explains WHAT corporate responsibility involves and WHY the board should work on it. The guide also contains some aids to HOW the board s work on this subject can be systemised and further developed. This guide has been designed so that small and medium sized companies will also find it useful. WHAT is the s corporate responsibility? Corporate responsibility is about how value creation happens and about how companies can produce goods and services in a profitable, responsible and sustainable manner. The s activities should be organised in such a way that they do not diminish the opportunity to pursue the same activities in the future - profitably, based on the same natural resources and with support from and employees. Key areas of corporate responsibility: «Corporate responsibility ( ) means that companies integrate social and environmental considerations into their day-to-day operations and in relation to their interests. Corporate responsibility means what companies do on a voluntary basis over and above complying with the laws and regulations of the countries in which they operate.» Human rights - respect human dignity Decent work - maintain decent and secure working conditions The environment - avoid damaging the environment and contribute to sustainable development Anti-corruption - combat corruption and handle grey areas Society - contribute positively to broader societal objectives White Paper No. 10 ( )
5 5 WHY is corporate responsibility? It is the right thing to do We all have a stake in and a responsibility. Values such as empathy, honesty, fairness and respect m the basis. Ethics and social responsibility are theree a natural part of commercial assessments. It pays off Corporate responsibility creates confidence in the and can often strengthen its competitiveness. In future, the commercial winners will be the companies that combine corporate responsibility with profitable growth. Our surroundings demand it The authorities want to see companies exercise their corporate responsibilities beyond what is mandatory by law. Expectations and norms can develop into regulations. Customers make ever increasing demands ethics and corporate responsibility from their suppliers and consumers want to buy goods and services that are perceived as safe and sustainable. Voluntary organisations and the media play an role as a driving ce. HOW can the board work on corporate responsibility? The board and management must have a clear overview of what challenges the faces and the areas in which the could have a negative influence on and the environment. Work on corporate responsibility is most in areas where the s impact on is greatest, or where there is great risk. When management has drawn up the priorities and established the goals, the board discusses their proposals. WORTH KNOWING:» The Confederation of Norwegian Enterprise (NHO) has published a guide to corporate responsibility entitled «A Matter of Trust». This guide takes the further step of directly relating the contents of the previous guide to the work of the board. You can find more inmation, examples, analysis tools and aids to further work on NHO s website NHO s Ethics and Corporate Responsibility Council consists of eleven managers of NHO companies and an external resource person. The council advises NHO s administration and board in questions of ethics and corporate responsibility and can take the initiative to add relevant topics to the agenda. NHO has a network exchanging inmation and experience among those responsible corporate responsibility in its member companies, NHO s Forum Corporate Responsibility. NHO has guides to various topics relating to corporate responsibility. 76 per cent of managers in large companies state that their has a strategy active corporate responsibility, 49 per cent in business as a whole. 72 per cent of managers in large companies believe the should have employees dedicated to work on corporate responsibility. 58 per cent of managers in the private sector as a whole say the same. Response Analysis/Prooffice 2011 The Norwegian instructions corporate governance state that «The board should clarify the s basic values and mulate guidelines ethics and corporate responsibility accordingly.»
6 6 SOME TYPICAL STAKEHOLDERS: Others? Media Voluntary organisations The authorities Customers The Employees Suppliers Owners Local community The s stakeholders are those that affect or are affected by the s activities (see figure). In order to understand the points to be taken into consideration, the should find out who the stakeholders are and their roles, needs and perceptions of the advantages and disadvantages of the s activities. A m to help in this analysis can be found on
7 7 Corporate responsibility - the role of the board Assess status and prioritise challenges Set goals and give guidelines Check and follow up on improvements Foto: istockphoto
8 8 1 Assess status and prioritise challenges Tool presenting the challenges to the board Corporate responsibility checklist This checklist could be of assistance to management in preparing a review of the s challenges and opportunities board. Management reviews the checklist, by all means together with union representatives. The issues on the list are assessed on the basis of how it is to improve in each area, and how it is that the does it. Issues that are not relevant can be crossed out. An editable version of this m can be downloaded from Less Quite Very Less Quite AREAS STATEMENTS Employment standards: A1 Our employees have full freedom of organisation and action. A2 Our employees have contracts, regulated working hours and a living wage. A3 We have a good internal working environment and trust between management and employees. A4 We work towards being an inclusive workplace. A5 We work diversity among our employees and managers with regard to gender, age, religion, nationality etc. A6 We have guidelines and routines health & safety and measures preventing accidents. A7 Risk of child labour, ced labour and unacceptable working conditions in the supply chain are regularly assessed and followed up with action. A8 We offer our employees training and post-qualifying education. A9 Other. Very
9 9 Less Quite Very Less Quite AREAS STATEMENTS The environment: B1 We have a system environmental management. B2 We set environmental requirements our suppliers. Very B3 We have introduced more environmentally effective production processes. B4 We invest in more environmentally-correct technology. B5 B6 We work to reduce all ms of damaging emissions to air, water and ground. We have streamlined our energy consumption and reduced the use of non-renewable resources. B7 We utilise natural resources in a sustainable manner. B8 We sort and recycle waste. B9 We have reviewed the s effect on the local ecosystem and action has been taken to protect biological diversity. B10 Other. Anti-corruption: C1 We have zero tolerance corruption and bribery and we make this known to our partners and suppliers. C2 C3 C4 C5 Our employees are familiar with our ethical guidelines on corruption and have received the necessary training in what they mean in practice. We have guidelines that ensure that we are cautious and conscious when it comes to gifts and hospitality. We have routines notification that are known to all employees. Other.
10 10 Less Quite Very Less Quite AREAS STATEMENTS Society: D1 We have reviewed and are in dialogue with our most stakeholders in terms of corporate responsibility. D2 We have reviewed our effects on the local community and have established good relations with neighbours and other local interests. D3 We use local suppliers. D4 We support voluntary organisations and actions - financially or by means of practical cooperation and partnership. D5 We support the education of young people by taking in apprentices, accepting school pupils on work experience or cooperating with schools/pupil companies. D6 Other? Very Human rights: E1 We do not accept discrimination on the basis of gender, age, religion, political affiliation, nationality etc. E2 We safeguard product safety, so that use (or incorrect use) cannot harm the health and safety of consumers or the environment. E3 If we have activities in countries where there are wars or conflicts, we are conscious about avoiding participating in breaches of human rights E4 We have adopted a policy human rights in our. E5 We investigate the human rights situation in countries where we have activities, so as to avoid being involved in breaches of human rights. E6 Other? General: F1 We have a strategy corporate responsibility. F2 We have ethical guidelines that are communicated to all employees. F3 The s basic values are known to employees and other relevant stakeholders. F4 We set requirements corporate responsibility our suppliers and we follow these up with training, checks and in other ways. F5 Other?
11 11 Tool prioritising Here is a table to use when presenting challenges and issues in a way that makes it easy to prioritise them. Use the numbers from the checklist to place each of the issues in the correct square in the figure. Follow the column numbers in the checklist so as to get the right placing. Discuss which items are the most to work on. It would be natural to take these items firstly from the red square, then from the yellow ones. One good tip: not more than three to five items. For the issues that have been prioritised, set up goals and suggestions concrete actions to achieve them. Improvement is (stakeholders/environment) Improvement is WORTH KNOWING:» The National Contact Point considers complaints against companies breach of the OECD guidelines multinational companies. Its members are nominated by Confederation of Norwegian Enterprise (NHO), the Norwegian Confederation of Trade Unions (LO), and the Forum Environment and Development (ForUM). The United Nations Global Compact has ten principles in the areas of human rights, labour rights, the environment and anti-corruption that companies can sign up to. The OECD guidelines multinational companies are recommended by the governments of Norway and other countries. ISO is a guidance standard from the International Standards Organisation work on corporate responsibility in companies. The government s strategy decent work follows up on the International Labour Organisation s Decent Work Agenda, based on four principles job creation, workers rights, working environment and co-determination. The United Nations Guiding Principles on Business and Human Rights clarify the responsibilities of the authorities and companies with regard to the human rights of those affected by the s activities. The most frequently used reporting standard corporate responsibility is the Global Reporting Initiative.
12 12 No two companies are alike This checklist runs through the issues that we believe many will recognise. At the same time, the issues and challenges will be different companies in different industries and depending on where in the world the does business. A number of issues that might be relevant companies are listed below. Employment Sick leave Welfare measures Indoor climate Physical/chemical working environment Psychosocial working environment Substance abuse Personal safety System notification Development of employees Senior policy Reorganisation of responsibilities Diversity Job and life quality Fair pay Freedom of organisation Freedom of negotiation Forced labour Child labour Decent working conditions The environment Eco-friendly raw materials Eco-friendly technology Eco-friendly processes Eco-friendly products Lifecycle analysis Resource efficiency Energy efficiency Greenhouse gases Emissions to water Emissions to air Waste/landfill Waste management Recycling Biological diversity Ecosystems Corruption Gifts Hospitality Covering expenses Facilitation money Conflicts of interest Bribes Society Internships/trainees Work experience Local procurement Safe products Securing against loss of value Sponsorship Contributions to charity Assistance to voluntary organisations Human rights Discrimination Freedom of speech Freedom of religion Indigenous peoples Use of security ces
13 13 2 Set goals and give guidelines Elements of guidelines The board approves goals and guidelines In determining guidelines ethics and corporate responsibility, the board clearly indicates that corporate responsibility is and also what each employee is responsible. Proposals guidelines must be prepared by management. The board evaluates and adopts the guidelines and ensures that management communicates the message to the entire. The guidelines shall apply to all employees in the and explain the standards that the must live up to. Goals improvement The can determine goals improvements that are to occur in each of the priority areas. Management proposes which goals shall be set. The board discusses and approves them. The goals will be tailored to the individual. Some examples of the content of guidelines: The s values Importance of conming to laws and regulations Priority areas s corporate responsibility Rules preventing corruption and conflicts of interest Encouragement to notify of undesirable situations (breaches of the guidelines) Every employee s responsibility ensuring that the s standards and priorities are lived up to and fulfilled Line managers responsibility making the guidelines known and making sure they are followed Some examples of goals: Reduce energy consumption in production by 20 per cent Reduce CO2 emissions, noise and transport costs Combat corruption, child labour and work accidents in suppliers Develop a product that gives the consumer an environmental or health benefit
14 14 3 Follow up on improvements About reporting and indicators The purpose of the board s control and supervision function is to ensure that the guidelines ethics and corporate responsibility are complied with and that the is run in the right way to achieve the goals that have been set priority areas. The status of the work can be followed by the administration s reporting to the board on the results achieved indicators. Measuring indicators corporate responsibility helps the to ensure that goals corporate responsibility are being achieved and whether the trends are in the right direction. Many companies that begin to measure progress in corporate responsibility activities find that the same indicators can also be valuable in understanding operations and results. One example of this is measuring energy consumption, which is both the environment and reducing costs. The s size and type of activity will determine which and how many indicators it is relevant to monitor. The most thing however will always be to choose the most conditions to be measured and monitored. The board asks management to report progress each of the indicators. Satisfactory in relation to the goal. Goal partly achieved or delayed. Goal not achieved. Some examples of indicators: Energy consumption per unit produced Average quantity of packaging per unit produced Annual CO2 emissions connected to transport Annual complaints about noise from neighbours Number of inspections of working conditions at suppliers The board and management must assess whether the results being measured by the indicators corporate responsibility shall be an internal aid or whether the results shall also be presented externally. It will often be useful to report on the indicators in the s annual report. Openness about the results provides a good basis dialogue with customers, suppliers, owners and employees.
15 This guide has been produced by a working group appointed by NHO s Ethics and Corporate Responsibility Council. The working group consisted of Sten Magnus (UMOE), Gaute Hartberg (07 Group), Synne Homble (Cermaq) and Erik Lundeby (NHO). Stina Torjesen (Sigla) assisted the working group.
16 ISBN Deceber 2012 Design: Kaland Marketing Poto: Jo Michael Middelthuns gate 27 P.O. box 5250 Majorstuen 0303 Oslo Telephone Telefax
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