Standards of Corporate Responsibiity
An Article from Business Respect, Issue Number 83, dated 15 Jun 2005
By Mallen Baker
The International Standards Organisation has just completed a summit meeting in Korea on the future development of the proposed Corporate Social Responsibility standard ISO 26000. At the same time China has announced a new responsibility standard for the textiles and garments industry. Surely such standards represent progress. I wonder.
There are certain things that can be achieved reasonably well with management systems. Environmental management has shown itself over the last ten years to be one. After all, ISO 14001 is effectively about identifying impacts and managing processes to reduce them. Environmental issues are scientific in nature. Your process will produce a number of emissions and wastes. Redesigning the process, and improving efficiency, can reduce these. All you need to do is to apply human ingenuity to the problems, and then consistently manage and control the processes.
Quality is the same. No point in producing top quality products one time in three, if consistent monitoring and control of the process means that you can achieve zero defects.
Both approaches have their detractors, of course. Consistency is not the same as quality, and a process-driven approach isn't necessarily as good as a customer-driven approach. But this is about what kind of system works best, not whether it is desirable to have a system at all.
Given the world impact of the ISO family to date, we should surely be enthused and excited about the prospect of - at last - a standard to define best practice in corporate responsibility into a management system that can achieve consistency. If one believes that corporate responsibility is all about how you create policies, objectives and targets, and then manage the processes to achieve these, then there is a lot in this. And, of course, there are significant parts of corporate social responsibility that are served well by this sort of approach.
But it's not enough. Corporate social responsibility is often about how you resolve the dilemma of conflicting stakeholder demands that require a fine judgement. It is very often about leadership, and how a company can define its place as a shaper of the expectations of its marketplace.
Fundamentally CSR is about relationships. Stakeholders change their minds. They can punish you today for doing what they demanded yesterday. Building those relationships - and resolving the dilemmas that present themselves along the way - is really rather more of an art than a science. It's not something that easily lends itself to a standards-based approach.
Does this mean that an ISO standard would be of no value? It would be rather premature to reach this conclusion in advance of the final shape of the animal being visible. Nevertheless, what would be potentially very damaging would be for an ISO 26000 to become a badge of ethical quality, in the way that an ISO 9001 became so widely required by corporate customers as an easy 'guarantee' of quality from suppliers. Of course, the current description of 26000 is that of 'social responsibility guidelines' as opposed to a de facto management system standard. Thinking will no doubt evolve considerably before it is actually published - intended to be in 2008.
It would be interesting to make some real progress on finding ways to identify a good company. One of the most important would surely be some reflection of the 'corporate personality'. When Enron was busy running all the best community programmes and environmental management systems, the only visible signs of a problem in advance of the final collapse were the stores that appeared occasionally highlighting an aggressive marketplace style - in short a corporate personality that suggested that any values base really went skin deep. There are other well feted companies with sparkling programmes whose business activities spark similar stories today. These are important intangible indicators. They rather defy a standards-led approach.
There's nothing wrong with a good management system to encourage a quality approach to managing key aspects of corporate responsibility. It would just be good if this didn't come to be the badge that defines a 'good company' - or perhaps more importantly if the broader understanding of what constitutes corporate social responsibility doesn't come to be defined solely by what is covered by the ISO standard.