Aspirational Statements and Standards
OECD Principles of Corporate Governance
Origin. The OECD Principles of Corporate Governance were developed in conjunction with national governments, international organizations, and the private sector, as a result of an OECD Council meeting held on April 27-28, 1998. The Principles reflect the experiences of national initiatives within OECD Member countries, as well as work previously carried out within the organization. OECD organizations involved in the preparation process include the Business Sector Advisory Group on Corporate Governance, the Committee on Financial Markets, the Committee on International Investment and Multi-national Enterprises, the Industry Committee, and the Environment Policy Committee.
Purpose. The Principles are non-binding, and serve as a reference point. They are intended to assist efforts by Member and non-Member governments to evaluate and improve the legal, institutional, and regulatory framework for corporate governance. They also provide guidance to stock exchanges, investors, corporations, and other parties that contribute to the corporate governance process. The Principles focus on publicly traded companies. They also may serve as a useful tool for improving governance within privately-held companies.
Critical Content. The Principles address governance problems that result from the separation of ownership and control in the modern corporation. They identify the critical elements required for good governance. Specifically, they focus upon:
- Rights of Shareholders
- Equitable Treatment of Shareholders
- Role of Stakeholders in Corporate Governance
- Disclosure and Transparency
- The Responsibilities of the Board
Implementation. I mplementation is the responsibility of governments and corporations. The OECD calls upon them to decide how to apply the Principles within their own frameworks for corporate governance, taking into account the costs and benefits of regulation. The Principles also are evolutionary in nature, and should be reviewed in light of significant changes in the business environment.
To visit this code in its entirety please visit: http://www.oecd.org/dataoecd/47/50/4347646.pdf
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OECD Guidelines for Multinational Enterprises
Origin. The Guidelines were originally adopted by the Organization for Economic Cooperation and Development (OECD) in 1976 as one element within its Declaration on International Investment and Multinational Enterprises . They were last revised in June 2000.
Purpose. The Guidelines are targeted specifically towards multinational enterprises from OECD member countries that adhere to the Declaration on International Investment and Multinational Enterprises. They provide multinational enterprises – defined here as “companies or other entities established in more than one country and so linked that they may coordinate their operations” – with voluntary, non-binding principles and standards of good business conduct. The Guidelines are intended to help these enterprises contribute to economic, environmental, and social progress, with a view towards achieving sustainable development.
Content. Section I of the Guidelines ( “Concepts and Principles”) establishes the broad context for their use and implementation. The remaining sections articulate standards in nine areas:
- General Policies
- Employment and Industrial Relationships
- Combating Bribery
- Consumer Interests
- Science and Technology
Implementation. Implementation of the Guidelines ultimately depends upon the initiative of the individual companies. To support their efforts, countries adhering to the Declaration on International Investment and Multinational Enterprises are required to establish National Contact Points (NCPs). The NCPs promote the Guidelines , address inquires about them, and hold discussions with all interested parties. NCPs also come together annually to share experiences and report to the OECD Committee on International Investment and Multinational Enterprises (CIME). CIME meets periodically to discuss the Guidelines and to consult with business advisors, trade unions, and NGOs.
To visit this code in its entirety please visit: www.itcilo.it/english/actrav/telearn/global/ilo/guide/oecd.htm
2. August 2002
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Social Accountability 8000
Origin. SA8000 is the product of Social Accountability International (SAI), an organization founded in 1997. SAI is dedicated to addressing the growing concern among consumers about working conditions in factories around the world.
Purpose. SA8000 is intended to overcome the difficulties associated with monitoring internal corporate codes of conduct. It offers (1) a standard for workplace conditions, and (2) a system for independently verifying a factory’s compliance with this standard.
Content . SA8000’s normative elements are based upon International Labor Organization conventions and United Nations human rights standards, while its verification system draws upon established business strategies and systems for ensuring quality (e.g., ISO 9000). Its social accountability requirements address nine areas:
- Child Labor
- Forced Labor
- Health and Safety
- Working Hours
- Free Association and Collective Bargaining
- Management Systems
Implementation . SAI accredits firms to act as external auditors that certify whether manufacturing facilities are in compliance with SA8000. Certification of compliance with SA8000 means that a facility has been examined in accordance with SAI auditing procedures and found to meet the standard’s requirements.
To view this code in its entirety please visit: http://www.cepaa.org/SA8000/SA8000.htm
08 May 2002
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The Social Venture Network Standards of Corporate Social Responsibility
Origin. The Social Venture Network (SVN) was created in 1987 to develop an association of business and social entrepreneurs dedicated to the idea that business can be a potent force for solving social problems. The SVN began to develop a written set of standards for business responsibility in 1995. The Standards first appeared in 1999.
Purpose . The Standards of Corporate Social Responsibility are intended to be a compendium – that is, a short, but complete summary – of strategies and techniques for improving organizational performance. They represent an effort to define the landscape of corporate social responsibility and provide tools for organizations to make continuous improvement that is in concert with their overall business strategy.
Critical Content . The Standards identify nine foundational principles for corporate social responsibility:
- Ethics - The company develops and implements ethical standards and practices in dealings with all company stakeholders. The company’s commitment to ethical behavior is widely communicated in an explicit statement and is rigorously upheld.
- Accountability - The company acknowledges that many constituents have legitimate interests in its activities and discloses information in a timely matter so that stakeholders can make informed decisions. Stakeholder need-to-know takes precedence over inconvenience and cost to the corporation.
- Governance - The company balances the interests of employees, customers, investors, lenders, suppliers, affected communities, and other stakeholders in strategic objectives as well as day-to-day management and investment decisions. The company manages its resources conscientiously and effectively, seeking to enhance both financial and human capital.
- Financial Returns - The company compensates providers of capital with an attractive and competitive rate of return while protecting company assets and sustainability of these returns. Company policies are established to enhance long-term growth and shareholder value.
- Employment Practices - The company engages in human resource management practices that promote personal and professional employee development, diversity at all levels, empowerment, fair labor practices, competitive wages and benefits, and a safe, harassment-free, family-friendly work environment.
- Business Relationships - The company is fair and honest with suppliers, distributors, licensees, and agents. It promotes and monitors the corporate social responsibility of its partners.
- Products and Services - The company identifies and responds to the needs, desires, and rights of its customers and ultimate consumers. It strives to provide the highest levels of product and service value, including a strong commitment to integrity, customer satisfaction, and safety.
- Community Involvement - The company fosters an open relationship with the community in which it operates and plays a proactive, cooperative, and where appropriate, collaborative role in making the community a better place to live and conduct business.
- Environmental Protection - The company strives to protect and restore the environment and promote sustainable development with products, processes, services and other activities. It is committed to minimizing the use of energy and natural resources and decreasing waste and harmful emissions. The company integrates these considerations into day-to-day management decisions.
Implementation. The SVN Standards include not only principles (i.e., brief value statements), but also practices (means by which an organization can improve its performance relative to a principle), measures (tangible indicators of performance), and resources (potential sources of additional information). Taken as a whole, the Standards are analogous to the Caux Round Table Self-Assessment and Improvement Process,( 0.75 MB ) another tool designed to help organizations improve their performance.
The Standards suggest behavior, but they do not set a level of performance that is considered adequate. While the Standards’ authors hold that their principles are universally valid, they recognize there is no such thing as a generic company or a generic prescription for social responsibility: factors such as economic sector, governance, geographic scope, etc. must be considered. Therefore, it is assumed that companies who wish to improve their social performance will implement those pieces of the Standards most useful to their situation.
To visit this code in its entirety please visit: http://www.svn.org/initiatives/standards.html
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The Global Sullivan Principles
Origin. The Global Sullivan Principles were formulated by Reverend Leon Sullivan in 1997.
Purpose. The Global Sullivan Principles seek to support economic, social and political justice by companies where they do business; to support human rights and encourage equal opportunity at all levels of employment, including racial and gender diversity on decision making committees and boards; to train and advance disadvantaged workers for technical, supervisory and management opportunities; and to assist with greater tolerance and understanding among peoples, thereby improving the quality of life for communities, workers, and children.
Critical Content. The Global Sullivan Principles articulate eight general norms for companies, requiring them to:
- Support universal human rights, particularly those of employees, the communities within which they operate, and the parties with whom companies do business.
- Provide equal opportunity for employees at all levels with respect to color, race, gender, age, ethnicity or religious beliefs, and prevent unacceptable worker treatment such as the exploitation of children, physical punishment, abuse of women, involuntary servitude, or other forms of abuse.
- Respect employees' right to freedom of association.
- Provide compensation that enables employees to meet basic needs, and afford them opportunity to improve their skills and capabilities in order to increase their social and economic opportunities.
- Provide a safe and healthy workplace, protect human health and the environment, and promote sustainable development.
- Promote fair competition, respect intellectual and other property rights, and not offer, pay or accept bribes.
- Work with governments and communities to improve the quality of life -- educational, cultural, economic and social well being--and provide training and opportunities for workers from disadvantaged backgrounds.
- Promote the application of these Principles by those with whom they do business.
Implementation. Companies that ascribe to the Global Sullivan Principles are called to implement policies, procedures, and internal reporting structures that help ensure commitment to these aspirations. Endorsing companies and organizations are asked to take part in an annual reporting process, to document and share their experiences.
To visit this code in its entirety please visit: www.globalsullivanprinciples.org/principles.htm
15. July 2002
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Taskforce on the Churches and Corporate Responsibility Principles for Global Corporate Responsibility
Origin and Purpose . The purpose of the Principles for Global Corporate Responsibility is to promote positive corporate social responsibility consistent with the responsibility to sustain the human community and all creation. The Principles were drawn up in 1995 and revised in 1998 by collaborating agencies of certain faith communities in Canada, the United Kingdom and the United States. They are the Taskforce on the Churches and Corporate Responsibility (TCCR) in Canada, the Ecumenical Council for Corporate Responsibility (ECCR) in the UK, and the Interfaith Center on Corporate Responsibility (ICCR) in the US.
Critical Content. The Principles are offered as an ethical standard for global corporate social responsibility. They arise from the faiths of the participant groups, communities, denominations and traditions. At the foundation of the Principles is the belief that the community rather than the company is the starting point of economic life. For the community to be sustainable, all members (stakeholders) need to be recognized, i.e. consumers, employees, shareholders, the community at large and corporations. The Principles are grouped into two "sections" -- "The Wider Community" and "The Corporate Business Community" -- as indicated below.
The Wider Community
Section 1.1 - Ecosystems. High standards to minimize environmental damage and health impacts. The 'precautionary principle' is overriding: Where there are threats of serious or irreversible damage, lack of full scientific certainty should not be used as a reason for postponing cost-effective measures to prevent environmental degradation. Companies should take responsibility for the environmental impact of its products and services throughout the life cycle of these products and services.
Section 1.2 - National Communities. The company values being a citizenship in all its locations and full compliance with all internationally recognized standards. It also contributes in a responsible and transparent way to each society's efforts to promote full human development for all its members and does not use the mobility of capital and the immobility of labor as a tool against workers.
Section 1.3 - Local Communities. The company strives to contribute to the long-term environmental, social, cultural, and economic sustainability of the local communities in which it operates.
Section 1.4 - Indigenous Communities. The company is committed to respecting fully the rights of indigenous peoples as they are recognized by the appropriate jurisdictions and laws.
The Corporate Business Community
Section 2.1 - The Employed - Conditions. The company ensures that each employee is treated with respect and dignity. This includes genuine respect for employees' right to freedom of association, labor organization, free collective bargaining, non-discrimination in employment and a safe and healthy working environment provided for all employees.
Section 2.2 - The Employed - Persons
Sub-section 2.2a - Women in the Workforce. The company values women as a vital group of employees who have a significant contribution to make to the work of all companies and ensures that there is equal remuneration for work of equal value.
Sub-section 2.2b - Minority Groups. The company does not discriminate on grounds of race, ethnicity, or culture.
Sub-section 2.2c - Persons with Disabilities. The company ensures that persons with disabilities who apply for jobs with the company receive fair treatment and are considered solely on their ability to do the job with or without workplace modifications.
Sub-section 2.2d - Child Labor. Neither the company nor its contractors exploit children as workers.
Sub-section 2.2e - Forced Labor. The company does not use any forced labor, whether in the forms of prison labor, indentured labor, bonded labor, slave labor or any other non-voluntary labor.
Section 2.3 - Suppliers. The company accepts responsibility for all those whom it employs either directly or indirectly through contract suppliers, sub-contractors, vendors or suppliers.
Section 2.4 - Financial Integrity. The company insists on honesty and integrity in all aspects of its business, wherever business is conducted. It does not offer, pay, solicit or accept bribes in any form.
Section 2.5 - Ethical Integrity. The company recognizes that its directors and employees have a central role in upholding the company's ethical standards and codes of conduct.
Section 2.6 - The Shareholders. The company's corporate governance policies balance the interests of managers, employees, shareholders, and other interested and affected parties.
Section 2.7 - Joint Ventures / Partnerships / Subsidiaries. When entering into and throughout the duration of joint ventures and partnerships, the company takes into account the ethical implications as well as the financial implications of those relationships.
Section 2.8 - Customers & Consumers. The company adheres to international standards and protocols relevant to its products and services and is committed to marketing practices which protect consumers and which ensures the safety of all products. It is fully committed to fair trading practices.
Implementation. The Principles for Global Corporate Responsibility are aspirational in the sense that they urge adoption by managers and corporations, but do not specify an assessment or follow-up process. However, the Taskforce has correlated a set of critiera and benchmarks with the Principles; these can be used to assess a company's conformity to these aspirations.
More information about the Principles may be found at http://www.web.net/~tccr/benchmarks/index.html .
4. June 2003
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United Nations Universal Declaration of Human Rights
Origin. The General Assembly of the United Nations adopted and proclaimed the Universal Declaration of Human Rights on December 10, 1948.
Purpose. The Declaration is intended to provide a foundation for the recognition, respect, and realization of human rights by promoting a common understanding of these universal rights and freedoms.
Content. The rights enumerated within the Declaration are relevant to all spheres of human activity. Like the Caux Round Table Principles for Business , the Declaration recognizes the dignity of the human person and the fundamental equality of all (Article 1). Articles 23, 24, and 25 (1) are of particular interest to business organizations. They identify a series of rights intimately linked to the employment relationship.
- Everyone has the right to work, to free choice of employment, to just and favorable conditions of work and to protection against unemployment.
- Everyone, without any discrimination, has the right to equal pay for equal work.
- Everyone who works has the right to just and favorable remuneration ensuring for himself and his family an existence worthy of human dignity, and supplemented, if necessary, by other means of social protection.
- Everyone has the right to form and to join trade unions for the protection of his interests.
Article 24 .
Everyone has the right to rest and leisure, including reasonable limitation of working hours and periodic holidays with pay.
- Everyone has the right to a standard of living adequate for the health and well-being of himself and of his family, including food, clothing, housing and medical care and necessary social services, and the right to security in the event of unemployment, sickness, disability, widowhood, old age or other lack of livelihood in circumstances beyond his control.
Implementation. The Declaration calls upon “every individual and every organ of society” to promote respect for the enumerated human rights through education, and to support “their universal and effective recognition and observance” through progressive national and international measures.
To visit this code in its entirety please visit: http://www.un.org/Overview/rights.html
08. May 2002
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The United Nations Global Compact
Origin. United Nations Secretary-General Kofi Annan proposed the Global Compact at the World Economic Forum on January 31, 1999. He challenged world business leaders to help build the social and environmental pillars required to sustain the new global economy and make globalization work for all the world's people.
Purpose. The Global Compact is not a regulatory instrument, but a tool designed to promote institutional learning. It seeks to use the power of transparency and dialogue to identify and disseminate good practices that are rooted in globally-acknowledged principles.
Critical Content . The Compact encompasses nine principles, drawn from the UN Universal Declaration of Human Rights , the International Labor Organization’s Fundamental Principles on Rights at Work and the Rio Principles on Environment and Development . These are:
- Principle One : Protection of internationally proclaimed human rights.
- Principle Two : Non-complicity in human rights abuses
- Principle Three : Support for freedom of association
- Principle Four : Elimination of forced and compulsory labor
- Principle Five : Effective abolition of child labor
- Principle Six : Elimination of employment and workplace discrimination
- Principle Seven : Support for a precautionary approach to environmental challenges
- Principle Eight : Initiatives to promote greater environmental responsibility
- Principle Nine : Development and diffusion of environmentally-friendly technologies
Implementation . To engage in the Compact, companies are asked to have their chief executive officer send a letter to the United Nations Secretary-General, expressing a clear commitment to the Compact. Engagement includes (1) taking concrete steps within the organization to act on the nine principles, (2) sharing these experiences on the Global Compact website, to contribute toward the development of a “comprehensive learning bank”, and (3) advocating publicly for the Global Compact.
To view this code in its entirety, please visit: http://www.unglobalcompact.org/Portal/Default.asp
29. January 2002
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Draft U.N. Human Rights Principles and Responsibilities for Transnational Corporations and Other Business Enterprises
Origin and Purpose . This document, which is in the drafting process, was commissioned by the UN as an addendum to the UN Universal Declaration of Human Rights. Its purpose is to indicate that there are some rights that can and should be provided for by business organizations “as organs of society,” although governments have the primary responsibility to promote and protect human rights.
Critical Content. The Draft consists of seven broad rights principles, followed by a set of implementation guides and definitions. Each of the broad rights principles is further articulated by sub-paragraphs and commentaries aimed at making the principles clearer and more specific.
- General Obligations . While governments have the primary obligation to promote internationally recognized human rights, transnational corporations and other business enterprises also have the obligation to promote international human rights within their respective spheres of activity and influence.
- Right to Equal Opportunity and Treatment . Business enterprises shall pursue policies which ensure equality of opportunity and treatment, for the purpose of eliminating discrimination based on race, color, sex, religion, political opinion, nationality, social origin, social status, indigenous status, disability, age (over the age of majority), marital status, capacity to bear children, pregnancy, sexual orientation, genetic features, or other status of the individual unrelated to the individual’s ability to perform his/her job.
- Right to Security of Persons . Business enterprises shall not engage in nor benefit from war crimes, crimes against humanity, genocide, torture, forced disappearance, forced or compulsory labor, hostage-taking, abuses in internal armed conflict, and other international crimes against the human person.
- Rights of Workers. Business enterprises shall not use forced or compulsory labor, shall respect the rights of children to be protected from economic exploitation, shall provide a safe and healthy working environment, and shall compensate workers with remuneration that ensures a lifestyle worthy of human existence for workers and their families in the context of their circumstances. They shall also ensure freedom of association and effective recognition of the right to collective bargaining.
- Respect for National Sovereignty and Local Communities. Business enterprises shall recognize and respect applicable laws and authority of the countries in which the businesses operate, in so far as they do not conflict with international human rights standards. They shall not engage in bribery or seek/give improper advantage from/to any government, government official, or candidate for elective post. In addition, businesses shall respect a community’s rights to health, adequate food, and adequate housing, and refrain from actions that obstruct the realization of those rights. Businesses shall also respect other rights, such as rights to education, rest and leisure, and participation in the cultural life of the community. Also civil and political rights, such as freedom of movement; freedom of thought, conscience, and religion; and freedom of opinion and expression.
- Obligations with regard to Consumer Protection. Business enterprises shall act in accordance with fair business, marketing, and advertising practices and should take all reasonable steps to ensure the safety and quality of the goods and services they provide.
- Obligations with regard to Environmental Protection. Business enterprises shall carry out their activities in accordance with laws and policies relating to the preservation of the environment of the countries in which they operate and shall generally conduct their activities in a manner contributing to the wider goal of sustainable development.
Implementation. The Draft calls for business enterprises to be subject to verification of compliance with these Principles in a manner that is independent, transparent, and includes input from relevant stakeholders. E ach company shall adopt, disseminate, and implement its own code of conduct or shall take other adequate measures to afford at least the protections set forth in these Principles. Business enterprises shall assess their major activities to determine their human rights impact in light of these Principles and such assessments shall be subject to verification in a manner that is independent, transparent, and includes input from relevant stakeholders.
Note. The Draft is under review by the Subcommission on the Promotion and Protection of Human Rights, a subsidiary body of the U.N. Commission on Human Rights. At the time of writing, the Draft will next be considered during the Subcommission’s fifty-fourth session, to be held on July 30-31 in Geneva, Switzerland.
To view this code in its entirety, please visit: http://www.unhchr.ch/Huridocda/Huridoca.nsf/TestFrame/396b1b56d0124306c1256bdc0038bcfa?Opendocument
14 May 2002
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Origin. The Institute of Social and Ethical Accountability (ISEA) facilitated the development of AccountAbility1000 (AA1000) through work with individuals and organizations from business, government, and civil society. The standard first appeared in 1999.
Purpose. AA1000 is intended to improve the accountability and overall performance of business firms by enhancing the quality of social and ethical accounting, auditing and reporting. The AA1000 standard can be used in two ways: (1) as a common currency to underpin the quality of existing and emerging specialized accountability standards, or (2) as a stand-alone system and process for managing and communicating social and ethical accountability and performance.
Contents. AA1000 specifies the process an organization should follow to account for its performance, rather than performance levels an organization should achieve. Under AA1000, corporations define and declare their governing values and ethical principles. The process standards contained within AA1000 link these values and principles to the development of performance targets and to the assessment and communication of organizational performance. An organization gradually enhances its performance by capitalizing on experience from previous improvement cycles.
Implementation. Utilization of AA1000 standard proceeds through five stages:
Planning: The organization commits to the process, and defines and reviews its values and social/ethical objectives and targets.
Accounting: The scope of the process is defined, information is collated and analyzed, and performance targets and improvement plans are developed.
Auditing and Reporting: A report on the organization’s systems and performance is prepared, the overall process is externally audited, reports are made accessible to stakeholders, and stakeholder feedback is obtained.
Embedding: Structures and systems are developed to strengthen the process and integrate it within the organization’s activities.
Stakeholder Engagement: Stakeholder participation is sought and engaged in stages (1) through (4).
To view this code in its entirety, please visit:
http://www.accountability.org.uk/uploadstore/cms/docs/AA1000%20Framework%201 or view the Executive Summary at: http://www.accountability.org.uk/uploadstore/cms/docs/AA%20ITP%20(exec).pdf
19. December 2002
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