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The Corporate Responsibility Code Book

Third Edition

The Corporate Responsibility Code Book has become the go-to guide for companies trying to understand the landscape of corporate responsibility and searching for their own, unique route towards satisfying diverse stakeholders. There is no one-size-fits-all approach. A company may face quite different challenges if it operates in more than one part of the world. And yet stakeholders, especially consumers and investors, are keen for some degree of comparability with which they can evaluate corporate performance. There are countervailing forces at work within corporate responsibility: on the one hand is the need for convergence in order to simplify the large numbers of codes and standards; and, on the other hand, the need to foster diversity and innovation.

Many of the best codes of conduct and standards are not well known, while some CR instruments that are well disseminated are not terribly effective. Some comprehensive codes of conduct achieve nothing, while other quite vague codes of conduct become well embedded into the organization and foster innovation and change. This landmark book explains the best CR instruments available, and distils their most valuable elements.

In the fully revised third edition, Deborah Leipziger widens her lens to provide detailed
analysis of the UN Guiding Principles on Business and Human Rights, the Gender Equality
Principles and ISO 26000 while updating other key tools such as the Equator Principles, the OECD guidelines and GRI’s new G4 framework.

The codes in this book cover a wide range of issues, including human rights, labour rights,
environmental management, corruption and corporate governance. The book also includes
how-to (or process) codes focusing on reporting, stakeholder engagement and assurance.

This book about Corporate Responsibility is the most authoritative, comprehensive, informative— and yes, practical—guide for corporations, governments, and human communities worldwide that has ever been written ... Leipziger deserves our applause for collecting, describing, and interpreting these CR codes that deliver a central message to corporations, governments, and human communities everywhere: “Ready, aim … comply!”

http://www.williamcfrederick.com/current-book-reviews.html William C. Frederick, February 2016

This book about Corporate Responsibility is the most authoritative, comprehensive, informative— and yes, practical—guide for corporations, governments, and human communities worldwide that has ever been written. It addresses every major CR issue/problem facing business firms around the entire globe: human rights, workplace labor rights, racial and gender discrimination, health issues, marketplace corruption, corporate governance, investment policy, environmental safeguards, and emerging sustainability issues—plus how to shape corporate strategies and decisions to confront CR issues and move toward resolving them. Join me in shouting “Whoopee!”

You may, or should, already know the author, Deborah Leipziger, who has been writing about CR codes and standards for some 10 years, ever since the first edition of this book was published. Most importantly, Leipziger is an on-the-scene CR consultant who travels worldwide advising business firms, NGOs, governments, and United Nations members about their CR activities and goals. Believe me, this is the “real stuff” about Corporate Responsibility standards and how to achieve them. Here’s how she does it.

But first, a little background. Leipziger says that presently “There are millions of pages and web pages written on codes and standards, but most of it is ‘spin’”. However, her goal is “to break through the ‘spin’ to objectively describe principles and codes … [and] to provide clarity … by offering manageable and useful information.” Moreover, much CR terminology is imprecise and occasionally contradictory, “still evolving and developing its own lingua franca”. Code diversity is another problem because the standards vary in scope covered, stakeholder focus, sectoral focus, geographic/national region, single company or broader sectors, and whether about performance or procedure.

To cut through this confusion, Leipziger points out that the existing codes are a “synthesis of different approaches … a crystallising of visions … into a new [CR] paradigm.” As a way of moving on, she identifies three needs of this new paradigm: a need for “convergence among standards”; a need to “promote innovation”; and a need to “demonstrate the business benefits of these approaches.” Take note of that last one, because we’ll return to it later.

Before each code’s full text or summary is laid out, readers will find a very helpful and brief description of main points to consider: the code’s “Background, Strengths and weaknesses, Companies to which the code applies, Questions posed and answered, and The promises and the challenge.”

How many codes are we talking about? The book’s executive summary describes 30 codes. The book’s individual chapters identify 37 codes, while my own count adds up to 36 plus 5 “sectoral agreements.” They span the years from the 1940s to 2010, with a bump-up in the 1990s (9 new codes) and in 2000-2010 (12 new codes). Some are well known: the UN Global Compact, the OECD Guidelines for Multinational Enterprises, and the Universal Declaration of Human Rights. Others are newer: The Business Charter for Sustainable Development (1990-91), and the Women’s Empowerment Principles (2009-10).

More important than when the codes first appeared is their principal purpose and function. Leipziger is quite clear, saying that the codes are “a reference guide for companies, NGOs, trade unions and students” and that “The goal of the book is to help companies select, develop and implement social and environmental codes of conduct.” She also believes such a code book “will guide companies through a critical turning point in the field of social responsibility, from rhetoric to action” (emphasis added). The codes also offer a potential to “institutionalise dialogue” between pro- and con- parties, leading Leipziger to say, “It may well be that these dialogues are the most significant contribution of these tools”.

But of course, neither the book’s author nor anyone else can make these things happen automatically or without much effort repeated over long time periods. As she herself admits, “There is no Holy Grail in the field of corporate responsibility”, which means that “the consensus necessary for achieving convergence can be elusive.” Why elusive? Because contentious stakeholder-organization negotiations plus “cultural, historical, sectoral and/or geographic nuances to each code … can be barriers to convergence.” So, it’s not the codes’ fault but the corporation-stakeholder differences plus variations in human culture and geography.

That’s beginning to sound a bit familiar to this reviewer. While Leipziger is right to emphasize the stakeholder-cultural-sectoral-geographic variations, a more basic dilemma of adopting and operationalizing the CR codes goes well beyond these cultural variations per se. This dilemma is even more complex because it reveals the presence of a nature-based problem, i.e., the need to balance and integrate corporate economic production with the human community’s ecological system. Both corporate economizing and community ecological processes are entirely natural in origin and function, though conditioned by human culture. Such natural processes underlie, support, and drive all stakeholder-cultural-historical-sectoral components.[1]

Now, recall Leipziger’s earlier reference to the “business benefits” that need to be part of the new CSR paradigm. But business benefits are frequently the CR problem, not the solution. Business economizing often ignores or overwhelms a community’s, or the entire globe’s, ecological systems. Inasmuch as code compliance is entirely voluntary, corporations can choose the extent to which they comply with code provisions. For many, or perhaps most, business firms, economizing comes easier than does ecologizing. Hence, the dilemma. So, how to resolve this more basic, nature-based dilemma?

In the book’s final chapter, Leipziger seems to endorse ISEAL (International Social and Environmental Accreditation and Labelling Alliance) as a way forward to create convergence on procedural mechanisms. She says, “ISEAL is an excellent model for convergence … In 2013, ISEAL launched the Credibility Principles to promote transparency, engagement and truthfulness” plus “other key contributions … : Assurance Code, Standard-Setting Code, Impacts Code.” Thus, ISEAL provides four practical pathways to achieve a state of Corporate Responsibility via principles, an assurance code, code standards, and ways to measure the results or impacts of CR initiatives.

Perhaps this ISEAL approach will be an effective way to agree on procedural mechanisms, but it leaves open the question of agreement on performance standards. Leipziger acknowledges that “It is easier to achieve convergence of procedural issues than it is on performance standards.” Nevertheless, both ISEAL and the entire set of Corporate Responsibility codes described in this book chart the way forward for progressive corporations, their stakeholders, and humans around the globe.

Deborah Leipziger deserves our applause for collecting, describing, and interpreting these CR codes that deliver a central message to corporations, governments, and human communities everywhere: “Ready, aim … comply!”

 

1 For an analysis and discussion of these natural processes, see William C. Frederick, Values, Nature, and Culture in the American Corporation (New York: Oxford University Press, 1995) and William C. Frederick, Natural Corporate Management: From the Big Bang to Wall Street (Sheffield, UK: Greenleaf Publishing Ltd., 2012).

http://www.williamcfrederick.com/current-book-reviews.html William C. Frederick, February 2016

Foreword
Sir Mark Moody Stuart

A note to readers

Acknowledgements

Introduction

Introduction to the third edition

Executive summary of corporate responsibility initiatives

1. Values, principles, norms, codes and standards

Part 1: Global Initiatives

2. The OECD Guidelines for Multinational Enterprises

3. The UN Global Compact

4. ISO 26000

Part 2: Human rights

5. IFC Performance Standards to be included Part II Human Rights

6. The Guiding Principles on Business and Human Rights

7. The Voluntary Principles on Security and Human Rights

Part 3: Labour rights

8. International Labour Organization: Tripartite Declaration of Principles concerning Multinational Enterprises and Social Policy

9. Social Accountability 8000

10. Fair Labor Association: Workplace Code of Conduct

11. Ethical Trading Initiative: Base Code

12. Other major initiatives in the clothing industry

Part 4: Health issues

13. ILO Code of Practice on HIV/AIDS and the World of Work

Part 5: From environment to sustainability

14. The Rio Declaration on Environment and Development

Part 6: Combating corruption

15. The OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions

16. The Extractive Industries Transparency Initiative

17. The Business Principles for Countering Bribery

Part 7: Corporate governance

18. The OECD Principles of Corporate Governance

Part 8: Company codes of conduct

19. Shell’s General Business Principles

20. Johnson & Johnson’s ‘Credo’

Part 9: Framework and sectoral agreements

21. Framework agreements

22. Sectoral agreements

23. The Equator Principles

24. The Principles for Responsible Investment

Part 10: Gender

25. The Gender Equality Principles

Part 11: Implementation

26. AccountAbility 1000 Series: AA1000 AccountAbility Principles Standard 2008

27. AccountAbility 1000 Assurance Standard

28. The Global Reporting Initiative

29. ISO 14001

Part 12: Visions for the future

30. An emerging consensus 

DEBORAH LEIPZIGER advises companies around the world on human rights issues and played a key role in the development of several key standards, including Social Accountability 8000.

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