Methodologies for Implementing Standard Codes of Conduct


Methodologies for Implementing Standard Codes of Conduct

Not only do these codes of conduct, standards, and guidelines demand a high and consistent standard of behavior for organizations, they are all designed to provide a structured framework of behavior for signatory organizations as well as a mechanism for investors who need to be able to measure comparability between the principles and activities of companies. As we have seen, however, critics have charged that simply having a guideline, even when combined with performance standards such as SA 8000, tells a company very little about how to actually achieve those goals ” or for that matter, whether a company or its suppliers are adhering to those standards or not.

. . . The important point is to measure implementation effects, says Robert Pojasek, Adjunct Lecturer on Environmental Science at Harvard University s School of Public Health, rather than simply reviewing whether the organization has signed a statement. Corporations need specific program guidance, he suggests, such as that found in the Baldrige quality assessment process. Reflecting a widespread feeling among business leaders , he contends that standards and principles all suffer from the same problem . . . what does not necessarily lead to how. [15 ]

To some extent, the response to the how question has come in the form of AccountAbility (AA) 1000, which, when combined with the provisions of the Global Reporting Initiative (see Chapter Sixteen), is expected to go some way toward resolving those issues. Launched in 1999 by the Institute of Social and Ethical AccountAbility, AA 1000 is not a code of conduct or a performance standard but a framework of best practice methods in social and ethical accounting, auditing, and reporting. Known as a process standard, AA 1000 does not tell a company what levels of performance it needs to achieve to be socially responsible (as does SA 8000), but instead focuses on helping companies judge if they have processes in place to monitor and report on their social and environmental performance. In short, unlike codes or standards, AA 1000 does not tell a company what it should do, but instead provides it with a framework to understand how it should be doing it.

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Process Standards

Although it does have some elements of performance measurement, unlike SA 8000 or the ISO standards, a process standard such as AA 1000 is designed not to direct companies in terms of what the right thing to do is, but instead to instruct them on the way that they should go about doing the right thing.

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AA 1000 has two sets of offerings. The first, the AA 1000 Framework, is a series of modules that provide guidance on how to interact with stakeholders ” suppliers, business partners , NGOs, government agencies ” in order to create legitimate and worthwhile social and environmental performance indicators.

The second offering, the AA 1000S Assurance Standard, usually implemented in conjunction with a recognized standard such as SA 8000 or ISO 14001, helps organizations evaluate their social and environmental performance against these industry standards. AA 1000S is also specifically designed to be consistent with GRI (the Global Reporting Initiative) guidelines (see Chapter Sixteen), providing guidance to companies on what are known as assurance principles ” completeness, materiality, accessibility, evidence ” when undertaking the reporting process itself. It therefore helps the company ensure that readers of their report can be assured of its accuracy and authenticity.

The AA 1000S framework covers five areas:

  • Planning. Companies work with their stakeholders to create value statements, codes, and objectives, and then develop a social and environmental accounting system, including key performance indicators, measurements, and a reporting process, that reflect those aspirations.

  • Accounting. The company collects and analyzes information on its social and environmental performance and prepares a report.

  • Auditing. The performance information and the report are independently audited .

  • Reporting. The report is published among employees and stakeholders.

  • Embedding. The company takes lessons learned from the process and makes changes to its policies, procedures, and systems in order to improve their performance. [16 ]

One of the fundamental tenets of AA 1000 is that a company is very much dependent upon collaboration with its stakeholders in order to create an ethical supply chain, and it is this emphasis on consultation and collaboration with business partners that helps to make implementation of standards such as SA 8000 more effective. Constantly evolving, AA 1000 is in the process of being streamlined, and has recently developed five specialized modules, which include:

  • Assurance Framework. A GAAP-like set of accounting principles, process standards, and procedures for social and sustainability auditing, important for creating comparability between different company reports .

  • Governance and Risk Management. Designed to help companies develop performance metrics and report to investors on the company s efforts to manage social and environmental risk. This module covers issues such as forms of governance, the composition of various governance brokers within a company, how stakeholders gain access to company leaders, how company leaders are involved with ethical and social performance management, incentive programs for promoting sound and ethical performance among employees, and how ethical and social performance is incorporated in decision making.

  • Integration of AA 1000 Processes with Existing Management and Metrics Systems. A module that helps match up information gathering and reporting techniques with standard quality and performance tools such as the Balanced Scorecard. It provides tools for identifying current systems that can provide governance and social and environmental reporting information, with guidance on how to prioritize, embed, and integrate the information. This is an important addition, because it helps to link to other well-respected standards.

  • Stakeholder Engagement. This module provides guidance on how to develop a stakeholder program, including guidelines for addressing conflict of interest issues, tools for assessing the effectiveness of stakeholder engagement programs, and guidelines for documenting the outcomes .

Accountability in Small and Medium Organizations. This module modifies other elements of the framework in order to help smaller companies to participate. [17 ]

Among the benefits that come from this type of a stakeholderfocused approach is the fact that the AA 1000 framework encourages specific dialogue with business partners, activists, and community leaders in a way that tends to quickly identify areas of social or environmental risk or abuse that are often ignored or purposely overlooked through an impersonal survey or questionnaire.

[15 ] Robert B. Pojasek, How Do You Measure Environmental Performance? Environmental Quality Management, October 4, 2001.

[16 ] AA 1000 Assurance Standard: Guiding Principles, Consultation Document, AccountAbility, June 2002.

[17 ] AA 1000 Assurance Standard: Guiding Principles, Consultation Brief, Account-Ability, March 2002.