Corporations Tout Social Responsibility
An emerging opportunity for quality professionals
by Hank Lindborg
ACCOUNTING SCANDALS, the enactment of the Sarbanes-Oxley Act in 2002 and criminal cases against formerly respected CEOs all enhanced our awareness of corporate governance and enterprise risk management.
The Malcolm Baldrige National Quality Award has added “governance and social responsibilities” to its leadership criteria, codes of conduct are more prevalent, and ethics has taken on new importance in corporate training and business school curricula.
At the same time, degradation of the natural environment, exploitation of workers domestically and globally, and the risks associated with extended supply chains in a “flat” world have taken on greater urgency and further tarnished corporations’ reputations. This gives us a new appreciation of the value of stakeholder management and social responsibility.
It is now difficult to visit the website of any major corporation or read its annual report without encountering the theme of social responsibility. For example, in a recent reflection on annual reports, writer William P. Dunk notes Wal-Mart’s emphasis on ethical conduct: “Indeed, its reports are so laden with its social gospel that one could come to believe that it is a foundation or church, not the world’s most important business.”1
Of course, without assurance that rhetoric reflects practice, it’s easy to be cynical about companies’ assertions. For two years, ASQ has been involved in an initiative aimed at providing such assurance, one that promises new career opportunities for quality professionals.
In February 2006, ASQ invited participation in a technical advisory group (TAG) to develop the U.S. position on the International Organization for Standardization’s (ISO) draft of the ISO 26000 standard on social responsibility, to be published early in 2009.2
While ISO 26000 is not a management system standard and is not intended for certification, it is nonetheless important globally. In November 2006, ISO and the United Nation’s Global Compact Office agreed to make the standard congruent with the global compact’s 10 principles on human rights, labor standards, environment and anti-corruption.3
ASQ defines social responsibility as people and organizations behaving and conducting business ethically and with sensitivity toward social, cultural, economic and environmental issues.4 Though this statement sounds soft, there are strong economic arguments for sustainable, responsible business development.
These have not been lost on the investment community. For example, the Dow Jones Sustainability Index, which has been employed for a decade, analyzes corporations on economic, environmental and social criteria that include governance, risk and transparency.5
Because failure to manage risk can be catastrophic in a global economy, we can expect more and more organizations to conduct audits that provide assurance to stockholders and other stakeholders.
Role of quality professionals
How can quality professionals prepare themselves for opportunities presented by ISO 26000?
There might be some guidance in the development of an existing standard in the United Kingdom. The AA1000 Assurance Standard was written in the late 1990s by the Institute for Social and Ethical Accountability to provide transparency for stakeholders and responsiveness to their concerns, as well as for compliance with voluntary standards and legal requirements.6
The 1999 design of the AA1000 framework described qualifications for those who would conduct audits of social responsibility. These might be helpful in assessing the orientations and skills required to employ ISO 26000 in your own organization or as an outside consultant/auditor.
The framework suggests a challenging curriculum, including the following:
- A grounding in environmental standards, such as ISO 14000.
- Communication skills and auditing practice.
- About 100 to 120 training hours that would encompass social and ethical dimensions of organizations, finance and economics, environment, legislative and ethical issues, leadership and governance. How to conduct an audit, including appropriate tools and techniques, would also be covered.
If you’re interested in ISO 26000 or related standards, ask yourself:
- Do I know about corporate ethics? Stakeholder approaches to organizations?
- Do I have a grasp—theoretical and practical—of organizational strategies and structures in a global environment? Leadership and governance? Accounting? Labor? Legislative and environmental issues? Human values and cultures? Best practices in organizational diagnosis?
- Can I talk the language of top man-agement and the boardroom? This is perhaps the most challenging question. The issues raised by social responsibility audits—addressing reputation, risk and sustainability—are those that touch the highest levels of organizations. They are no longer about feeling good, or public relations.
Here is an opportunity for quality professionals to assume leadership roles and make a case for their contributions to sustainability, values, ethics and operations.
REFERENCES AND NOTES
- William P. Dunk, “Forecast: Not So Good,” Conference Board Review, November/December 2007, p. 18.
- Corporate Social Responsibility—Doing the Right Thing, www.asq.org/social-responsibility.
- United Nations Global Compact, www.unglobalcompact.org.
- What Does ASQ Mean by “Social Responsibility,” www.asq.org/social-responsibility/about/what-is-it.html.
- Dow Jones Sustainability Indexes, www.sustainability-index.com.
- AccountAbility, www.accountability21.net.
HENRY J. LINDBORG is executive director and CEO of the National Institute for Quality Improvement, which provides consulting in strategic planning, organizational development and assessment. He holds a doctorate from the University of Wisconsin-Madison and teaches in a leadership and quality graduate program. Lindborg is past chair of ASQ’s Education Division and of the Education and Training Board.