Session 10


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Session 10

  1. 1. Social Accountability & Audit <ul><li>Broadened accountability & assurance - a new paradigm - from shareholders to stakeholders </li></ul><ul><li>Corporate Social Responsibility (CSR) </li></ul><ul><li>Social Accountability (SA) and Audit(SAA) </li></ul><ul><li>Corporate Ethical Performance (CEP) </li></ul><ul><li>Global Reporting Initiative (GRI) </li></ul><ul><li>Environmental Sustainability Reporting </li></ul><ul><li>Triple Bottom Line Reporting </li></ul><ul><li>Health & Safety Reporting </li></ul>
  2. 2. Council on Economic Priorities (CEP) <ul><li>Since 1969 - provision of accurate & impartial analysis of CSP & promote excellence in corp. citizenship </li></ul><ul><ul><li>Shopping for a Better World </li></ul></ul><ul><ul><li>Campaign for Cleaner Corporations </li></ul></ul><ul><ul><li>Corporate Conscience Awards </li></ul></ul><ul><ul><li> </li></ul></ul><ul><li>CEPAA - Accreditation Agency </li></ul><ul><li>Standard … SA8000 </li></ul>
  3. 3. Council on Economic Priorities Accreditation Agency (CEPAA) <ul><li> </li></ul><ul><li>SA 8000 … (ISO 9000 QC; 14000 Envir. Mgt.) </li></ul><ul><ul><li>Common standard/framework for ethical sourcing for companies of any size and any type, anywhere in the world </li></ul></ul><ul><li>SA 8000 Certification of Company </li></ul><ul><li>SA 8000 Certification Auditor </li></ul>
  4. 4. AccountAbility <ul><li> </li></ul><ul><li>AA1000 standard </li></ul><ul><ul><li>Principles that identify characteristics of a quality process and that can be used in designing & managing an organization’s social & ethical accounting, auditing & reporting process, and in assessing that process </li></ul></ul><ul><li>AA1000 qualification </li></ul><ul><li>Social reporting awards – co. websites </li></ul>
  5. 5. Disclosure Standards <ul><li>Global Reporting Initiative (GRI) </li></ul><ul><ul><li>[email_address] </li></ul></ul><ul><ul><li>Sustainability reporting guidelines </li></ul></ul><ul><ul><li>20+ companies have beta tested guidelines </li></ul></ul><ul><li>CERES Principles </li></ul><ul><ul><li> </li></ul></ul><ul><ul><li>Valdes Principles </li></ul></ul>
  6. 6. Disclosure Standards <ul><li>Principles for Global Corporate Responsibility: Bench Marks for Measuring Business Performance - Task Force on the Churches and Corporate Responsibility (TCCR) </li></ul><ul><ul><li> </li></ul></ul><ul><ul><li>broad-based set of principles </li></ul></ul><ul><ul><li>23 Appendices - each a code for reference </li></ul></ul><ul><li>Triple Bottom Line Reporting - BC Hydro </li></ul><ul><ul><li>Social, Economic and Financial performance </li></ul></ul>
  7. 7. Crisis Management <ul><li>A Crisis is an unusual event that has a significant probability of affecting the organization’s reputation & its ability to meet its strategic objectives. </li></ul><ul><li>Proper management is essential to manage risks and opportunities </li></ul><ul><li>Ethical decision making is essential to maintain reputation </li></ul>
  8. 8. Crisis Case <ul><li>Shell Brent Spar Oil Storage Vessel </li></ul>
  9. 9. Ethics Should be Part of Crisis Management <ul><li>Crises are more significant than daily decisions – reputation impact </li></ul><ul><li>Opportunities may be lost: </li></ul><ul><ul><li>lack of sensitivity to stakeholder interests </li></ul></ul><ul><ul><li>reduction in acute & chronic phases </li></ul></ul><ul><ul><li>reduction in stakeholder anxiety…ethical expectations </li></ul></ul><ul><ul><li>ensures decision makers given all info & options </li></ul></ul><ul><ul><li>helps identify important issues & best alternative </li></ul></ul>
  10. 10. Build Ethics into Crisis Management <ul><li>Prevention and warning: Code, Training, Examples </li></ul><ul><li>Analytical approach: </li></ul><ul><ul><li>Apply a stakeholder-analysis framework </li></ul></ul><ul><ul><li>Ethics expert/consultant on the crisis management team </li></ul></ul><ul><ul><li>Checklist or specific time to consider: Ethics issues, alternatives, opportunities </li></ul></ul><ul><li>Decision itself: apply a template including ethics </li></ul><ul><li>Communications on ethical intent to: </li></ul><ul><ul><li>Employees outsiders: customers, media, etc. </li></ul></ul>
  11. 11. Managing The Crisis <ul><li>Identify the crisis </li></ul><ul><li>Can you influence the outcome? At what cost? </li></ul><ul><li>Isolate on the crisis. It should take precedence. </li></ul><ul><li>Prevent, avoid, mitigate </li></ul><ul><li>Make plan fluid, contingent </li></ul><ul><li>Integrate ethics into the decision-making: </li></ul><ul><ul><li>Assign watch-dog responsibility, Use a checklist </li></ul></ul>
  12. 12. Phases of a Crisis Time Cost To Organization Crisis Control Begins Post- Crisis State Reached Continuing Reputational Impact Unanticipated Crisis Anticipated Crisis Phases Pre-crisis Uncontrolled Controlled Reputation Restoration
  13. 13. Considerations for Managing a Crisis <ul><li>Earliest possible identification and assessment of crisis </li></ul><ul><ul><li>Check warning indicators as part of an ongoing risk management system </li></ul></ul><ul><ul><li>Analyse crises using the stakeholder impact analysis process </li></ul></ul><ul><ul><li>Consider how the crisis or its impact can be influenced – timing, cost, mitigation? </li></ul></ul><ul><li>Develop a plan of action with </li></ul><ul><ul><li>Ethics/company’s values integrated into the decision making </li></ul></ul><ul><ul><ul><li>Assign ethics watch-dog responsibility </li></ul></ul></ul><ul><ul><ul><li>Use a checklist </li></ul></ul></ul><ul><ul><ul><li>Apply moral imagination </li></ul></ul></ul><ul><ul><li>Alternative responses/actions to meet contingencies that could arise </li></ul></ul><ul><ul><li>Specific consideration of how to improve the organization’s reputation drivers including – trustworthiness, responsibility, reliability, and credibility </li></ul></ul><ul><ul><li>Specific communications objectives </li></ul></ul><ul><li>Delay can allow the situation to degenerate, so act promptly </li></ul><ul><li>Review how the crisis management process could be improved after it is over </li></ul>
  14. 14. Advance Planning Considerations <ul><li>Crisis Identification and Analysis as part of Annual Risk Management Process </li></ul><ul><li>Train personnel to develop awareness of possible crises their potential </li></ul><ul><li>Brainstorm to identify possible crises </li></ul><ul><li>Using the stakeholder impact analysis techniques from Chapter 5, analyse the impacts of each scenario and rank each on the basis of: </li></ul><ul><ul><li>Relative urgency, power and legitimacy of claims </li></ul></ul><ul><ul><li>Reputational impact in short, medium and long terms </li></ul></ul><ul><ul><li>Interest likely from media, employees, and/or government </li></ul></ul><ul><ul><li>Profit impact </li></ul></ul><ul><li>Develop Warning Indicators </li></ul><ul><li>Develop a Crisis Management Team ready to be called upon </li></ul><ul><ul><li>Designated replacements, outside experts, public spokesperson </li></ul></ul><ul><li>Develop Crisis Management Tools </li></ul><ul><ul><li>Process - checklist, assigned roles and duties, hotline, advise CEO protocol, danger classification with pre-planned actions, values to guide decisions </li></ul></ul><ul><ul><li>Communications – crisis strategy integrated with normal, responsibility, plan, contact phone numbers for employees, media, government, customers </li></ul></ul><ul><ul><li>Contingency planning for actions to anticipate more than one path to resolution </li></ul></ul>
  15. 15. Crisis Forecasting & Ranking <ul><li>Score each potential crisis from 0-10 on: </li></ul><ul><ul><li>Will it...Escalate in intensity? </li></ul></ul><ul><ul><li>...Fall under close scrutiny from government or media? </li></ul></ul><ul><ul><li>...Interfere with normal operations </li></ul></ul><ul><ul><li>...Jeopardize positive public image </li></ul></ul><ul><ul><li>...Damage bottom line </li></ul></ul><ul><li>Add score on each dimension and calculate average crisis impact value. </li></ul><ul><li>Estimate probability of occurrence </li></ul>
  16. 16. Plot Average Scores and Probabilities to Identify Most Important Crises Average Scores Probability of Occurrence x x x x Worst
  17. 17. <ul><li>BE WELL </li></ul><ul><li>& BE ETHICAL </li></ul>