A board of directors can help structure, support and monitor a company's CR initiatives.
Currently in Australia there are no regulatory requirements for going beyond responsibility to shareholders, but there are plenty of initiatives companies can take if they are willing.
Corporate Social Responsibility reports are becoming increasingly common, and there is plenty of guidance available to companies unsure about where to start.
Whether yours is a publicly-listed company or not, the Australian Securities Exchange Corporate Governance Principles and Recommendations are a useful resource.
Dead-Set Winners (low cost/effort - every company should do these)
- Ensure women make up 20% of board directors (and aim for 50% in future)
- Work to define the company's values and ensure they're reflected in every aspect of your business
- Be clear about who the stakeholders in your business are (including, but beyond shareholders)
- Consider what reasonable expectations those stakeholders might have of your company
- Delegate oversight of corporate responsibility functions to a board member/s
- Delegate responsibility for corporate responsibility functions to relevant senior executives
- Include corporate responsibility functions in performance evaluations of senior executives
- Have relevant board members and senior mangers undergo corporate responsibility training
- Have the company board state the corporate responsibility standards that will guide their work and their expectations of management
- Include environmental, social and governance information in your annual report
- Be able to justify executive salaries, increases in those salaries, and bonuses
- Keep your remuneration report as concise as possible and as easy as possible for less sophisticated investors to understand
- Give a considered response to the shareholder non-binding vote on your remuneration report
Good Practice (require moderate investment and will provide moderate return)
- Have the board assess the non-financial risks to the company and brand
- Commit to using triple-bottom-line reporting (including environmental and social factors in addition to financial)
- Produce a corporate responsibility report
- Consider using one of the available sets of guidelines to monitor/report on your CR programs (such as the Global Reporting Initiative or the London Benchmarking Group Australia/New Zealand)
- In addition to shareholders, acknowledge other stakeholders in your business: employees; employees' families; company directors; customers; suppliers; the wider community; members of your supply chain; government
- Define what you consider to be the reasonable expectations these stakeholders can have of your company, and make sure those reasonable expectations are documented in the company's code of conduct
- Practice multi-stakeholder engagement: engage all stakeholders (including the wider community) when making decisions or addressing problems that affect them - you may receive some valuable input, and prevent a backlash later
- Work towards greater accountability appropriate to each of your stakeholders
- Be prepared to share your expertise - if you are succeeding in CR, offer your know-how to others
Cutting Edge (high cost/effort with high returns)
- Disclose non-financial risks
- In your corporate responsibility report, acknowledge shortcomings and criticisms, as well as successes
- Have the company's corporate responsibility report (or corporate responsibility matters in the annual report) independently verified
- If you're having your report verified or assured, be absolutely clear with relevant staff about how rigorous the process is, and that they must be able to account for all information they provide