Social Accountability & Audit

1. Social Accountability & Audit • Broadened accountability & assurance - a new paradigm - from shareholders to stakeholders • Corporate Social Responsibility (CSR) • Social Accountability (SA) and Audit(SAA) • Corporate Ethical Performance (CEP) • Global Reporting Initiative (GRI) • Environmental Sustainability Reporting • Triple Bottom Line Reporting • Health & Safety Reporting

2. Council on Economic Priorities (CEP) • Since 1969 - provision of accurate & impartial analysis of CSP & promote excellence in corp. citizenship • Shopping for a Better World • Campaign for Cleaner Corporations • Corporate Conscience Awards • www.cepaa.org • CEPAA - Accreditation Agency • Standard … SA8000

3. Council on Economic Priorities Accreditation Agency (CEPAA) • www.cepaa.org • SA 8000 … (ISO 9000 QC; 14000 Envir. Mgt.) • Common standard/framework for ethical sourcing for companies of any size and any type, anywhere in the world • SA 8000 Certification of Company • SA 8000 Certification Auditor

4. AccountAbility • www.accountability.org.uk • AA1000 standard • 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 • AA1000 qualification • Social reporting awards – co. websites

5. Disclosure Standards • Global Reporting Initiative (GRI) • www.info@globalreporting.org • Sustainability reporting guidelines • 20+ companies have beta tested guidelines • CERES Principles • www.ceres.org • Valdes Principles

6. Disclosure Standards • Principles for Global Corporate Responsibility: Bench Marks for Measuring Business Performance - Task Force on the Churches and Corporate Responsibility (TCCR) • www.web.net/~tccr • broad-based set of principles • 23 Appendices - each a code for reference • Triple Bottom Line Reporting - BC Hydro • Social, Economic and Financial performance

7. Crisis Management • A Crisis is an unusual event that has a significant probability of affecting the organization’s reputation & its ability to meet its strategic objectives. • Proper management is essential to manage risks and opportunities • Ethical decision making is essential to maintain reputation

8. Crisis Case • Shell Brent Spar Oil Storage Vessel

9. Ethics Should be Part of Crisis Management • Crises are more significant than daily decisions – reputation impact • Opportunities may be lost: • lack of sensitivity to stakeholder interests • reduction in acute & chronic phases • reduction in stakeholder anxiety…ethical expectations • ensures decision makers given all info & options • helps identify important issues & best alternative

10. Build Ethics into Crisis Management • Prevention and warning: Code, Training, Examples • Analytical approach: • Apply a stakeholder-analysis framework • Ethics expert/consultant on the crisis management team • Checklist or specific time to consider: Ethics issues, alternatives, opportunities • Decision itself: apply a template including ethics • Communications on ethical intent to: • Employees outsiders: customers, media, etc.

11. Managing The Crisis • Identify the crisis • Can you influence the outcome? At what cost? • Isolate on the crisis. It should take precedence. • Prevent, avoid, mitigate • Make plan fluid, contingent • Integrate ethics into the decision-making: • Assign watch-dog responsibility, Use achecklist

12. Phases of a Crisis Cost To Organization Unanticipated Crisis Anticipated Crisis Continuing Reputational Impact Post- Crisis State Reached Control Begins Crisis Time Controlled Phases Reputation Restoration Pre-crisis Uncontrolled

13. Considerations for Managing a Crisis Earliest possible identification and assessment of crisis • Check warning indicators as part of an ongoing risk management system • Analyse crises using the stakeholder impact analysis process • Consider how the crisis or its impact can be influenced – timing, cost, mitigation? Develop a plan of action with • Ethics/company’s values integrated into the decision making • Assign ethics watch-dog responsibility • Use a checklist • Apply moral imagination • Alternative responses/actions to meet contingencies that could arise • Specific consideration of how to improve the organization’s reputation drivers including – trustworthiness, responsibility, reliability, and credibility • Specific communications objectives Delay can allow the situation to degenerate, so act promptly Review how the crisis management process could be improved after it is over

14. Advance Planning Considerations Crisis Identification and Analysis as part of Annual Risk Management Process Train personnel to develop awareness of possible crises their potential Brainstorm to identify possible crises Using the stakeholder impact analysis techniques from Chapter 5, analyse the impacts of each scenario and rank each on the basis of: • Relative urgency, power and legitimacy of claims • Reputational impact in short, medium and long terms • Interest likely from media, employees, and/or government • Profit impact Develop Warning Indicators Develop a Crisis Management Team ready to be called upon • Designated replacements, outside experts, public spokesperson Develop Crisis Management Tools • Process - checklist, assigned roles and duties, hotline, advise CEO protocol, danger classification with pre-planned actions, values to guide decisions • Communications – crisis strategy integrated with normal, responsibility, plan, contact phone numbers for employees, media, government, customers • Contingency planning for actions to anticipate more than one path to resolution

15. Crisis Forecasting & Ranking • Score each potential crisis from 0-10 on: • Will it...Escalate in intensity? • ...Fall under close scrutiny from government or media? • ...Interfere with normal operations • ...Jeopardize positive public image • ...Damage bottom line • Add score on each dimension and calculate average crisis impact value. • Estimate probability of occurrence

16. Plot Average Scores and Probabilities to Identify Most Important Crises Worst x x Average Scores x x Probability of Occurrence

17. BE WELL &BE ETHICAL