BLIHR | Step 1

STEP 1: Understand how human rights can be embedded into your business culture

Business culture – including corporate identity, purpose, values and ways of working – can enable or create barriers to effective integration of human rights. Often, underlying attitudes and norms of behaviour in relation to human rights can undermine the most coherent policies, processes and procedures. For corporations, this can be exacerbated if incentive systems, evaluations and targets reinforce unethical choices. This is the case in all areas of doing business, and often magnified when new concepts – such as human rights – are introduced.

In response to this issue, BLIHR companies have developed a set of questions to begin exploring the dynamics of your business. This tool appears in the Appendix of a larger BLIHR publication Human Rights Corporate Accountability Guide: From Law to Norms to Values.

EXECUTIVE SUMMARY

Taken from Human Rights Corporate Corporate Accountability Guide: From Law to Norms to Values, John F Sherman and Chip Pitts

In order to be held to account for its impact on human rights, a company must internalize human rights principles into the shared values embraced at all of its levels that drive its businesses on a day to day basis. Shared values comprise a company's culture, which may or may not always align with its stated goals. Ensuring a robust corporate culture that supports and respects human rights is critical to preventing business-related human rights abuses.

To achieve this culture, a company should take an integrated approach.

First, the company must understand what the law forbids (e.g., directly abusing human rights and being complicit in human rights abuses by others) and what the law requires (e.g., identifying, mitigating, and reporting upon risk).
Second, the company must take into account so-called soft law arising from the growing international web of multi-stakeholder initiatives and public and private codes and norms. Although these norms are technically voluntary, they have significant bite in practice, as a result of the absence of a centralized command-and-control system of international law. This has been characterized as a new ―law merchant, so named for self-regulatory rules and principles based on usages and customs that medieval European merchants followed in order to fill in the gaps created by what was, at the time, an unresponsive civil law.
Finally, the company must internalize these internal and external standards by living up to their letter and spirit. This requires sound management and authentic leadership, resulting in the adoption of human rights values as core corporate values that manifest themselves in day-to-day actions.

INTERNAL TRANSPARENCY AND CONFIDENTIAL HOTLINES

To reinforce the value of respecting human rights, leaders should create an open and trusting environment that encourages the reporting of accurate information – good or bad — on a timely basis. This places a premium on internal transparency and systematic study of failures. Some may believe that it is better not to know of problems since knowledge creates a duty to address them effectively, the failure of which might give rise to legal liability. However, in the long term, responsible companies know that they can lower their risk profile – including their exposure to legal risks — by discovering and solving problems before they become massive and intractable, and break out into the public arena through litigation and divestiture campaigns. Indeed, risk identification and mitigation is nothing new; it is inherent to the requirement of robust internal financial controls.

Confidential hotlines, which permit employees to make anonymous reports about corporate misconduct via phone, email, or web, have become a standard corporate practice, are maintained on a global basis by many multinational companies and are mandated by law and regulation in the United States and the United Kingdom However, they are regarded with distrust some countries due to concerns over data privacy and possible abuse. They do not fit well into corporate cultures in countries with the memory of totalitarian regimes that encouraged citizens to spy and report on one another. Significant issues also arise when companies are complicit in failing to respect data privacy, as in the case of Yahoo! providing information to the Chinese authorities. Finally, anonymous complaints — usually a minority of hotline complaints — can be hard to investigate and resolve as a practical matter.

While confidential hotlines have their place – i.e., to protect the identities of employees who are afraid to come forward for various reasons – they do not substitute for a broader affirmative commitment by companies to encourage the reporting of problems, to investigate and resolve those problems in a timely manner, and to identify and fix any systemic issues that are revealed. Listening to and addressing such complaints can be a source of continuous learning and improvement when it comes to the real impact of business operations on human rights.