The Business Case for Directors to address human rights issues in their organisation and supply chains

Taking a human rights approach to business is not just another rebranding of corporate social responsibility initiatives or philanthropy. Philanthropic giving is, of course, to be encouraged by any socially responsible company, but building a medical clinic, or supporting a local NGO, cannot offset complicity in child labour practices, or discriminatory treatment of workers.

Integrating human rights goes to the core of a business.  It requires implementation of policy commitments, efficient management structures, and on-going due diligence procedures. But many directors are not sure of why they need to do more than simply the minimum that the law requires.

10 reasons why Directors should be concerned

Here are 10 reasons why Directors should be concerned about how they tackle human rights whatever their business size and notwithstanding where they operate:

1. The Law: increasingly legislation requires companies to disclose their human rights issues. See the  UK and Australian Modern Slavery Act, the EU Non-Financial Reporting Directive and the human rights reporting requirements under the Companies Act 2006:
2. Directors can be held personally liable for negligence under the Companies Act 2006 provisions
3. Directors are obliged to sign off the ‘Slavery and Human Trafficking Statement’ under the provisions of the MSA. Whilst there is no criminal liability, damage to reputation and civil claims could ensue
4. Reputation – protecting the company’s reputation, particularly the brand is now seen as a key reason to develop a sound approach to human rights.
5. Managing supply chain risk – companies that want to become resilient must address their supply chain risks, particularly in respect to human rights
6. Investor’s scrutiny – human rights is increasingly a key issue for investors.
7. Reducing costs – by streamlining business functions and improving risks and management functions
8. Attracting the best recruits – a Harvard business school study has revealed that companies that are ethical get more than 45% unsolicited employment applications
9. Meeting employee expectations of good corporate citizenship
10. Meeting customer requirements – customer boycotts of goods companies over 2.6 billion dollars a year
11. It creates value or opportunity for companies
12. It’s the right thing to do.

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