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  • andrea 6:11 am on September 17, 2015 Permalink | Reply
    Tags: , , , , , , , UNGC   

    The business case for a strong culture of integrity 

    Ethics is a growing business issue. You can barely open a newspaper today or turn on the TV without hearing about yet another company paying the price for poor employee judgment, bad conduct or inadequate oversight. But why should companies care?

    For a start, the penalties for those who do get caught are high:

    • German engineering giant Siemens made corporate history in 2008 when it paid US$1.6 billion to settle charges of bribery.
    • Recent banking fines have been even higher—$1.9 billion to HSBC, $2.6 billion to Credit Suisse, and a monumental $8.9 billion to BNP Paribas.
    • The actual cost is even higher: studies put the cost of reputational damage from ethics scandals at up to seven times the original fine in market value.

    Broken trust and lapsed values seriously impair brand value, employee recruitment and retention and customer loyalty for individual companies—what’s more the total burden of unethical business conduct on the economy as a whole is mindboggling. The B20 Anti-Corruption Working Group estimates that corruption consumes 3% of global GDP each year, costing more than US$2.6 trillion.

    CC image by Pictures of Money

    CC image by Pictures of Money

    Small wonder that ‘conduct risk’ is a red-hot topic for regulators: around the world, from the UK Bribery Act to China’s Article 164, standards and regulations are being developed and revised to combat unethical business practice more effectively.

    The upshot for business is that a race to the top is now on to foster good conduct by embedding effective ethics and compliance (E&C) frameworks that prevent, detect and respond to ethical violations. But companies can’t depend on the compliance system to do all the heavy lifting—no E&C programme alone can guarantee that everyone will always do the right thing. Indeed, without strong ethical culture, E&C initiatives will struggle to make a lasting impact unless they’re accompanied by values-driven behaviour change that’s aligned, integrated and reinforced at individual, organisational and systems levels.

    Proactive business leaders are cottoning on that reshaping business culture is the best way of preventing ethical dilemmas from becoming ethics lapses in the first place. Investing in integrity means shifting from a ‘don’t get caught’ to a ‘right thing to do’ mindset that can positively reinforce compliance, and boost trust and openness. When companies get this right—by promoting, supporting and celebrating personal and organisational integrity and empowering employees to ‘do the right thing’—conduct risk is reduced, reputation reinforced and the foundations are laid for long-term business success.

    In our next blog we’ll look at how you can make sure your culture delivers.

     
  • Astrid von Schmeling 9:16 am on May 8, 2013 Permalink | Reply
    Tags: stakeholder dialog, , UNGC, United Nations Global Compact   

    Do as I say, not as I do 

    ”He that gives good advice builds with one hand. He that gives good counsel and example builds with both,” said 16th century English philosopher Francis Bacon. It would seem the UN Global Compact is in need of a second hand.

    For Executive Director Georg Kell, UNGC stated values of transparency, dialog and accountability apparently don’t apply to how the UNGC is governed.

    In his annual letter to members from January, Kell announced a radical change in the organizations’ funding strategy–shifting its model from voluntary to mandatory membership fees. No dialogue was held with UNGC signatories prior to the decision—not even with its own Local Networks. There was no transparency on why the funding strategy was developed and how the money would be used. His letter was, however, accompanied by an invoice for up to USD 15,000 for signatories with a large turnover.

    hand

    Photo by Hortulus at Flickr

    Though most companies fully understand the need for the UNGC to adjust its income to an ever-expanding organization with an urgent agenda, signatories found reason to question the way the UNGC approached this issue. During a Local Network meeting in Geneva two weeks ago, Kell’s letter was the center of debate and meeting participants voiced the need for an inclusive approach when addressing the organization’s strategic issues.

    The epilogue? Kell has since backed down and his proposal has been temporarily suspended. The UNGC is now committed to working with its Local Networks on developing a revised collaborative funding model that is to be presented to signatories in September.

    One’s own advice is sometimes the hardest to take, Mr. Kell, but mistakes like these will take years from which to recover. The additional income will come in handy to fund all the stakeholder dialogue you’ll need to recapture the trust you’ve lost over the last couple of months.

     
  • Astrid von Schmeling 9:40 am on March 20, 2012 Permalink | Reply
    Tags: 4.0, Advanced Level, , , , UNGC   

    This COP needs more cred 

    Almost a year ago to this day, I wrote a blog here called, Has the UNGC jumped the gun?, about the newly launched guidelines for UNGC’s Advanced Level Communication on Progress (COP). Guess what? They had.

    To be truthful, part of my frustration was over the UNGC’s off-kilter mid-February timing. In the last phases of a pressing reporting season, I wasn’t in the mood for having the rules changed.

    Like I stated last year, the UNGC Advanced Level COP was half thought-through. It should have been better aligned with GRI’s 3.1 guidelines and taken tools like the Ruggie ‘Protect, respect and remedy’ framework into stronger account. But they didn’t. As a result, the UNGC has been playing a game of catch up. They issued two versions of the Advanced Level COP – and at least two additional corrections – over the span of one reporting cycle!

    The UNGC’s second iteration, effective in January, 2012, involves an overhaul of their 24 criteria to closer align with core UN and Global Compact resources, including Guiding Principles on Business and Human Rights and the Anti-Corruption Reporting Guidance as well as with GRI indicators. Like GRI’s 3.1, it now has Ruggie written all over it.

    There are strong arguments to support the fact that the UNGC should have extended their launch into 2013. Companies are waiting for GRI to issue version 4.0 of their guidelines. There is little reason give the Advanced Level COP much heed when they don’t know how the GRI will change in only a year’s time. Especially when you look at the UNGC’s fickle track record of the last year.

    Are continually revised reporting guidelines tearing your hair out? With the UNGC Advanced Level COP guidelines in its second iteration, with just as many corrections in ten months, the UNGC is not demonstrating the excellence that they expect of their reporters.

    If this COP is to gain any cred, it has to get its act together. The UNGC has to better understand the huge undertaking reporting is for multinationals. For the serious companies, it consumes a major part of the sustainability budget, and takes many months of production and preparation and is a complicated apparatus for data analysis and collecting best practice. If the UNGC is reaching for excellence among its signatories, it will have to demonstrate the same level of ambition themselves.

    Maybe UNGC will be able to answer a few of these questions at their webinar scheduled for Friday, March 23. I’ll be listening in – I hope you will too!

     
  • andrea 1:15 pm on July 26, 2011 Permalink | Reply
    Tags: integration, ISO, management systems, , UNGC   

    The UN Global Compact Management Model: sweet for starters 

     

    Try googling ‘management system’ images and your desktop instantly morphs into a Willy Wonka-esque sweetshop of brightly colored lozenges, pyramids and flow diagrams. And one of the brightest, most colorful new management candies on the block is the UN Global Compact Management Model.

    The fruit of a partnership with Deloitte, its goal is to provide a framework that is at once flexible, dynamic, practical, straightforward and scalable – to help leaders and learners alike translate the UN Global Compact’s 10 principles into practice. Geared at continuous monitoring and improvement of an organization’s alignment with the principles, six management steps are presented in a circular process. Sustainability and management experts, civil society and academia have all chipped in.

     

    PDCA to CADIMC

    The result is a vivid gobstopper that adapts the basic operating principles of ISO management system standards – Plan, Do, Check, Act – to the requirements of the Compact: Commit, Assess, Define, Implement, Measure, Communicate. At the end of the process, companies are expected to reaffirm their commitment to the Compact, and the cycle begins again. To work successfully, the model relies on three additional factors: governance, transparency and engagement.

     

    An undoubted virtue of the UNGC management model is in offering those new to the Compact a clear, simplified way to approach and apply it – and here I think it can play a big, de-mystifying role.

     

    Handy tips are provided for those ‘getting started’ as well as insight into ‘leadership practices.’ It is universal, generic and stand-alone.

     

    But it’s this last quality, I would argue, that’s also its weakness when it comes to more advanced signatories.

     

    While putting in place a dedicated management process may help in the early stages of implementing the Compact, ultimately, the ten principles must be intrinsic to a company’s culture, across all functions, not a separate, bolt-on process working in parallel.

     

    For those already well advanced on the corporate responsibility road, the real challenge lies in merging the 10 principles seamlessly into existing management approaches, into ‘the way we do business.’ Setting up a new, dedicated management system runs the risk of keeping the UNGC commitment forever at arm’s length to the core of the business.

     

    Total integration is by far the sweetest model of all.

     

     

     
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