A Way Forward The Commonwealth Business Council Guidelines For Corporate Citizenship

Business in the Commonwealth has become increasingly aware of its role in helping to make globalisation work in a way that combines economic advance with social development. Indeed, many Commonwealth companies are leading the way by demonstrating good corporate citizenship in action, “living out” the business principles that they have established and articulated in different ways.

The Commonwealth Business Council (CBC) Business Principles – developed out of CBC member companies collaborating to pool their experience and perspectives – consist of core values, responsibilities to stakeholders and a set of principles for how a company conducts its affairs. All companies and entities – no matter their size – are expected to adhere to these business principles. The principles apply not just to private sector entities but are relevant also to public bodies and in the voluntary sector. The CBC Business Principles are established under three headings: core values; responsibilities to stakeholders; and principles.

The CBC Guidelines for Corporate Citizenship provide guidelines of good corporate citizenship derived from CBC corporate members in Asia and beyond. They are a useful template for an international approach to CSR which has relevance and rigour in an Asian context and have emerged out of the characteristic Commonwealth consensus approach.

1. Values

The company will be guided by values and work towards reflecting them in its business operations:

  • Core Values – having clear values and a Code of Ethics such as honesty, integrity, fairness and openness, clearly stated and followed in practice;
  • Transparency – being actively open in structure, process and disclosure; establishing and maintaining communication with key stakeholders;
  • Tackling Corruption – adopting agreed codes, being persistent in enforcing them internally and in external dealings; and
  • Human Rights – recognising the implications for the business of a respect for human rights; having a policy and acting on it.

2. Corporate Governance

  • The company will manage its business with strong and effective corporate governance implemented by the board according to the following principles:
  • Compliance – ensuring that the corporation complies with all relevant laws, regulations, and corporate commitments;
  • Profitability – ensuring that the company is profitable and provides a reasonable return on the assets it employs;
  • Leadership – exercising leadership, enterprise, integrity and judgement in directing the corporation so as to achieve continuing prosperity for the corporation and acting in a manner based on transparency, accountability and responsibility;
  • Accountability and Responsibility – recognising and differentiating accountability linkages (to shareholders and statutes) and responsibility linkages (to other stakeholders); establishing reporting mechanisms to support these linkages;
  • Board Qualifications – ensuring that through a managed and effective process, board appointments are made that provide a mix of directors, each of whom is able to add value;
  • Checks and Balances -
  • ensuring that no one person or block of persons has unfettered power and that there is an appropriate balance of power and authority on the board which is, inter alia, usually reflected by separating the roles of chief executive officer and chairman, or by having a balance between executive and non-executive directors;
  • Management – appointing the chief executive officer and at least participating in the appointment of senior management, ensuring the motivation and protection of intellectual capital intrinsic to the corporation, ensuring that there is adequate training in the corporation for management and employees, and a succession plan for senior management;
  • Strategy – determining the corporation’s purpose, values and strategy, and implementing its values in order to ensure that it survives and thrives, and ensuring that procedures and practices are in place that protect the corporation’s assets and reputation;
  • Monitoring – monitoring and evaluating the implementation of strategies, policies, management performance criteria, and business plans;
  • Evaluation – regularly reviewing processes and procedures to ensure the effectiveness of its internal systems of control, so that its decision-making capability and the accuracy of its reporting and financial results are maintained at a high level at all times; regularly assessing its performance and effectiveness as a whole, and that of the individual directors, including the chief executive officer;
  • Risk Management – identifying key business risk areas including technology and performance indicators of the business enterprise and monitoring these factors; and
  • Disclosure – proving shareholders and markets with necessary and timely information material to the company’s performance and risks.

3. Relationships

  • The company will seek to develop and maintain strong relationships with its stakeholders and communicate effectively with them:
  • Customers – recognising the primacy of customers to business success; ensuring that product safety, effectiveness and value are maximised;
  • Shareholders – recognising shareholders as the primary stakeholder with a need for a good return on investment and growth in the medium term; understanding particularly the position of those with smaller shareholdings;
  • Employees – respecting employees; treating them fairly and with cultural sensitivity; enabling them to develop their potential through skill and technology transfer; recognising employees’ contribution to company success; recognising international agreements on the right to freedom of association and collective bargaining; eliminating all forms of forced labour; dealing with the problem of child labour;
  • Suppliers – conducting relationships fairly; disseminating information on corporate citizenship to them; assisting them to achieve continued improvement against agreed codes of practice in areas such as health and safety, human rights in the workplace; sharing knowledge, technology and ideas;
  • Local Communities – engaging in dialogue with relevant community representative organisations and seeking to contribute to long-term development;
  • Government – engaging in open and constructive dialogue to improve the policy and practice environment for business and to assist government to foster corporate citizenship in the business community; and
  • Civil Society – engaging with civil society organisations on a basis of respect, and within a framework in which both sides are committed to be open, transparent and accountable with respect to their financial and public support base.

4. Impact

  • The company will assess and seek to minimise any potential adverse impacts on the environment and local communities:
  • Environment – practicing and encouraging environmental responsibility and minimising environmental footprint;
  • Consumer Awareness and Product Impact – raising awareness of consumers regarding contents, safe use, and disposal of products;
  • Building Capacity – working to build capacity in dealings with host, local, and national communities; and
  • Impact on Other Species – recognising and limiting negative impacts on other species.

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    Author Information

    Arif Zaman is adviser, Commonwealth Business Council (CBC), and also serves as Principal of the Reputation Institute and Visiting Faculty, Henley Business School. He is also a member of the CSR Standing Committee at the Federation of Pakistan Chamber of Commerce and Industry.

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