united nations global compact Leading Countries Retreat

Learning, Practice, Results. In Good Company

United Nations Global Compact
Leading Companies Retreat
Summary Report
Toward Global Corporate Citizenship


On June 26-27, 2008, representatives from
13 multinational United Nations Global
Compact (UNGC) signatory companies, four
academics, and representatives of the spon-
soring organizations, the Boston College
Center for Corporate Citizenship, the United
Kingdom’s AccountAbility, and the UN Global
Compact (with the support of Accenture and
GE Corporation) met in a Leading Companies
Retreat. The goals of the two-day meeting
were to share best practices, obstacles, and
learning among the participants about their
movement toward global citizenship and to
formulate a non-prescriptive approach to
implementation of the UNGC in multina-
tional companies

By
Sandra Waddock
Philip H. Mirvis
Kwang Ryu
With Asya Anderson, Sylvia Kinnicut,
and Allison Lee

The meeting was sponsored by:

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UNGC Leading Companies Retreat www.BCCorporateCitizenship.org


Dear friend,

The Global Compact Office, in a close and very satisfactory partnership with the Boston College
Center for Corporate Citizenship and AccountAbility, invited a group of global companies
participating in the Global Compact to a two-day retreat at the end of June 2008. It was the first
time we had the opportunity of discussing at length the expectations of transnational companies
concerning our initiative and their experience in implementing the Global Compact principles in
their complex and vast organizations.

The experience has been very rewarding and potentially crucial for the future development of the
compact.

A vast pool of experience in using the Global Compact as a framework for progress was set on the
table during the two-day retreat. In the light of what these companies suggested, our challenge is
to systematize the implementation experience while scaling it up and expanding its reach. Their
detailed explanation of the implementation process and their current plans illustrates that they are
using a strategic approach and practice to integrate the Global Compact principles. Indeed, these
companies are well beyond embedding the Global Compact in their business and, rather, the “GC
way” is the foundation of their business strategy itself. This, indeed, is very good news for the
Global Compact.

I would say that the challenge now for the Global Compact is to create, out of the accounts
presented and the performance of many other champions that were not present at this event, a
narrative based on the experience of these companies and spread it throughout the Global
Compact networks.

We have also noted that participating companies are willing to take up the challenges posed by
the Millennium Development Goals, the new horizon of global crises (such as energy and food)
and the need for global business to participate more fully in this global agenda. They demand new
forms of global dialogue, they hope for an increasing role in global leadership, and they would like
to engage in platforms that can materialize private/public complementarities to build new policy
frameworks where companies can operate as good global corporate citizens. In sum, they are ready
to support new collaborative strategic formations for global management in a world of constraints.

These demands, sprinkled with calls for more proactive engagement platforms convened and
facilitated by the Global Compact, are seen, and even requested, as the next big step that needs to
be taken to allow for full functionality of the Global Compact to be achieved.

All in all, the retreat, the main aspects of which are summarized in this report, opened up a new
perspective: through a frank and open dialogue with the champions of the initiative, the Global
Compact Office can gain plenty of insight for the future; and in their turn, leading companies
can get inspiration out of the contact with their peers and with thought leaders. In that sense,
the retreat held in June is a very positive experience that should be repeated and enlarged for the
benefit of the Global Compact as a whole.

Sincerely,

Georg Kell
Executive Director
UN Global Compact

www.BCCorporateCitizenship.org UNGC Leading Companies Retreat


Toward Global Corporate Citizenship

What follows are observations on the dialogue and
a synthesis of the issues and insights from that
meeting that we hope will prove useful to other UN
Global Compact signatories as well as to companies
considering signing on.

IV UNGC Leading Companies Retreat
www.BCCorporateCitizenship.org UNGC Leading Companies Retreat IV
www.BCCorporateCitizenship.org


The UN Global Compact Two years later, in 2001, the UN Global
In 1999 then Secretary General of the United Compact (UNGC) was formally launched as
Nations Kofi Annan gave a groundbreaking an organization. At its core were nine (now
speech at the World Economic Forum. Annan 10) aspirational principles, all based on glob-
issued the following clarion call to the leaders ally agreed UN treaties and declarations. The
of the world’s largest and most powerful UNGC provides a framework for businesses
companies present: committed to aligning their strategies and
operating practices with universally accepted
I want to challenge you to join me in principles in the areas of human rights, labor
taking our relationship to a still higher rights, the natural environment, and anti-
level. I propose that you [corporate corruption (see roster on page 3).
leaders] . . . and we, the United Nations,
initiate a global compact of shared Today the UNGC is the world’s largest corpo-
values and principles, which will give a rate citizenship initiative with 5,600 total
human face to the global market. members and 4,300 companies participating
as signatories.
Globalization is a fact of life. But I
believe we have underestimated its A purely voluntary initiative, the Global
fragility. The problem is this. The spread Compact has two objectives: internalizing
of markets outpaces the ability of soci- the 10 principles in business strategy and
eties and their political systems to adjust activities globally, and catalyzing actions by
to them, let alone to guide the course business in support of the broader UN goals,
they take. History teaches us that such particularly to address the world’s develop-
an imbalance between the economic, ment problems, in line with the UN Millen-
social, and political realms can never be nium Development Goals.
sustained for very long. . . .
This meeting of leading multinational compa-
We have to choose between a global nies focused on whether and how the Global
market driven only by calculations of Compact’s 10 principles are being imple-
short-term profit, and one which has mented in companies known to be progres-
a human face. Between a world which sive and forward-looking with respect to both
condemns a quarter of the human race their own values and their participation in
to starvation and squalor, and one which the UNGC. The idea was that what had been
offers everyone at least a chance of pros- learned to date about the implementation
perity, in a healthy environment. Between process by these leading corporate citizens
a selfish free-for-all in which we ignore might prove useful to other companies in
the fate of the losers, and a culture in their global citizenship journeys.
which the strong and successful accept
their responsibilities, showing global
vision and leadership.

www.BCCorporateCitizenship.org UNGC Leading Companies Retreat 1


June 2008 Leading Companies Retreat
Building an Approach to Implement the Global Compact Principles into
Core Management Systems in Multinational Companies

Participating company representatives:
- Ms. Jill Huntley, Accenture
- Mr. Tomás Conde, BBVA
- Mr. Edgar Rodriguez Gonzalez, CEMEX
- Mr. Salvatore Gabola, The Coca-Cola Company
- Mr. Bo Miller, Dow Chemical Company
- Mr. Vinay Rao, Infosys Technologies Ltd.
- Mr. Christian P. Frutiger, Nestlé S.A.
- Dr. York Lunau, Novartis Foundation for Sustainable Development
- Ms. Susanne Stormer, Novo Nordisk A/S
- Mr. Nick Welch, Royal Dutch Shell
- Ms. Belén Izquierdo, Telefónica S.A.
- Mr. Sean Fitzgerald, Ketchum
- Mr. Charles Bartels, Manpower
Participating academics:
- Dr. Carolyn Woo, Dean, Mendoza School of Business at Notre Dame
- Dr. James Walsh, Gerald and Esther Carey Professor of Business Administration of the
Stephen M. Ross School of Business at the University of Michigan
- Dr. David Cooperrider, Director of University Center for Business as an Agent of World
Benefit at Weatherhead School of Business, Case Western Reserve University
- Dr. Sandra Waddock, Professor of Management and Senior Research Fellow, Center for
Corporate Citizenship, Carroll School of Management, Boston College
Hosts
- Dr. Manuel Escudero, UN Global Compact
- Dr. Bradley Googins, Boston College Center for Corporate Citizenship
- Mr. Steven Rochlin, AccountAbility
Staff
- Dr. Philip Mirvis, meeting facilitator, Boston College Center for Corporate Citizenship
- Mr. Kwang Ryu, Boston College Center for Corporate Citizenship
- Mr. Joe Sellwood, AccountAbility
- Mr. Guy Morgan, AccountAbility
- Ms. Asya Anderson, UN Global Compact
- Ms. Sylvia Kinnicutt, Boston College Center for Corporate Citizenship
- Ms. Allison Lee, Boston College Center for Corporate Citizenship

2 UNGC Leading Companies Retreat www.BCCorporateCitizenship.org


The UN Global Compact’s 10 Principles

The Global Compact’s 10 principles in the areas of human rights, labor, the environment, and
anti-corruption enjoy universal consensus and are derived from:
• The Universal Declaration of Human Rights
• The International Labor Organization’s Declaration on Fundamental Principles and Rights
at Work
• The Rio Declaration on Environment and Development
• The United Nations Convention Against Corruption

The Global Compact asks companies to embrace, support, and enact, within their sphere of
influence, the following set of core values in the areas of human rights, labor standards, the
environment, and anti-corruption:

Human Rights
• Principle 1: Businesses should support and respect the protection of internationally
proclaimed human rights
• Principle 2: Make sure that they are not complicit in human rights abuses

Labor Standards
• Principle 3: Businesses should uphold the freedom of association and the effective recog-
nition of the right to collective bargaining
• Principle 4: The elimination of all forms of forced and compulsory labor
• Principle 5: The effective abolition of child labor
• Principle 6: The elimination of discrimination in respect of employment and occupation

Environment
• Principle 7: Businesses should support a precautionary approach to environmental
challenges
• Principle 8: Undertake initiatives to promote greater environmental responsibility
• Principle 9: Encourage the development and diffusion of environmentally friendly
technologies

Anti-Corruption
• Principle 10: Businesses should work against corruption in all its forms, including extor-
tion and bribery



The UNGC lists several advantages of increasing oil and energy prices, depleted
membership: natural resource stocks, and failing ecological
systems, are creating new problems for soci-
• Demonstrating leadership by advancing eties and putting new demands on compa-
responsible corporate citizenship. nies.
• Producing practical solutions to contem-
porary problems related to globalization, The increasing power and global reach of
sustainable development, and corporate multinational corporations combined with
responsibility in a multi-stakeholder the diminishing ability of nation states to
context. deal with problems that too frequently reach
• Managing risks by taking a proactive across borders has put big business into a
stance on critical issues. paradoxical position: blamed for causing
• Leveraging the UN’s global reach and or contributing to many of the world’s ills
convening power with governments, busi- but looked to for responsible conduct and
ness, civil society, and other stakeholders. increasingly for remedies. Global surveys
• Sharing good practices and learnings. find that citizens around the world today
• Accessing the UN’s broad knowledge in not only hold businesses responsible for the
development issues. safety of their products, fair treatment of
• Improving corporate/brand management, employees, sustainable use of raw materials,
employee morale and productivity, and and reducing their environmental footprint,
operational efficiencies. but also for redressing human rights abuses,
lessening the rich-poor gap, and preventing
Context for global corporate citizenship the spread of HIV/AIDS, among many other
Adoption and implementation of the Global matters that might have once resided in the
Compact’s 10 principles take place in a context domain of public policy.1
of unprecedented global change and global
problems of increasing magnitude. Issues like The past decades have seen concerted efforts
climate change, potential water crises, overpop- by MNCs and businesses of all types, under
ulation, and the labor and human rights prob- the banners of corporate social responsibility,
lems in the extended supply chain of many citizenship, sustainability, etc. to get their
large multinational corporations (MNCs) are “own house” in order and begin to assume
only some of the pressing matters with which a more proactive and inclusive engagement
businesses have to contend in today’s world. with society.2 This takes form variously in
Many of these problems and the dynamics they stakeholder consultations, increased corpo-
generate are new to business. And many are rate transparency and nonfinancial reporting,
beyond solution by any given firm or sector attention to and accountability for triple
and require wholly new ways of operating if bottom line performance (economic, social,
any solution is to be achieved. environmental), and the like. A select set
of leading firms are moving their citizen-
Around the world global pandemics like the ship into the commercial marketplace by
HIV/AIDS crisis, rising rates of obesity, and producing “green” products and services,
chronic malnutrition, plus scarcities in food, reaching the world’s poor through and base-



of-the-pyramid innovations, increasing access be abstracted from the conversation without
to health services, medicines, communica- attribution to any specific individual or firm.
tions, and other technologies, improving the
nutritional value of foods-and-beverages, and Background information on specific company
in other ways exemplifying the business case actions and implementation strategies are
for “doing well by doing good.” presented with the companies’ permission.
Evidence of their practices are presented
Still, there are big and persistent gaps throughout this document on an anecdotal
between the public’s expectations of business basis.
and ratings of its social and environmental
performance. Recent data from the Reputa- Business in a leadership role
tion Institute documents that in 25 countries The Leading Companies Retreat began with
studied, an average of just one in five people remarks from representatives of the three
agree that “most companies are socially conveners, an introduction of the participants,
responsible.”3 Significantly, business leaders and spirited debate about the leadership role
themselves acknowledge a significant gap of business in global society.
between their rhetoric versus the reality of
their firm’s social and environmental perfor- MNCs have come to play a profoundly impor-
mance. Along this line, a 2007 survey of 391 tant role in the twenty-first century, signifi-
CEOs of UNGC signatory companies found cantly different from at any time in the past.
large numbers agreeing that the public expec- Their global reach, ability to efficiently inno-
tations have increased in the past five years, vate and problem solve, their knowledge
with many believing that they will continue of brand management and how to reach
to increase. These CEOs also report gaps in customers, and the vast resources that the
embedding citizenship into their strategy and largest of them control place them among the
operations and into their Board governance. most powerful institutions in the world. The
The gap is even wider when it comes to benefits of globalization to business—open
embedding it into their supply chains.4 markets, global labor supply, lower commu-
nication and transportation costs, decreased
It is in this context that the Leading Compa- regulations—have offered the world rising
nies Retreat took place. The insights and standards of living, given consumers lower
lessons in this document are drawn from the prices and a greater variety of goods and
conversations and presentations that took services, and provided access to technology
place over the course of the two-day meeting to ease their life and work burdens. However
at Boston College in June 2008. The text these benefits have not come without costs
tracks the major subjects discussed at the and criticism, well documented by scholars
meeting featuring key points made by each and development groups, and familiar to
presenting company and academic discus- attendees of this meeting. The emergence of
sant. A synthesis that follows in each area the corporate responsibility movement and
is unattributed because the retreat followed the guidance provided by initiatives like the
Chatham House rules, in which learning can UNGC attest to movement afoot in these



regards. corporations.

By the time the UNGC was formally launched There are, of course, plenty of examples of
in 2001, many MNCs had gone or were going MNCs and domestic corporations that have
through significant internal struggle over adopted constructive visions and clear social
heightened public expectations, challenges by and ecological values at their highest levels.
the media and stakeholders, and uncertainty Still, it is the process of driving down the
about their responsible role in society. At vision and values into the everyday actions
this retreat in Boston, many of the corporate of the corporation—the implementation
participants spoke to their belief in markets task—that is core to making the journey from
but added that markets work best with “good rhetoric to reality. The companies represented
governance, active civil society, and an under- at the retreat are on this journey. What were
standing of and accountability for the social their motives for signing on to the UNGC?
and environmental consequences of business
activity.” Motivations for Participating in the UNGC
Understanding why MNCs choose to adopt
Diminishing state resources over the past the UNGC principles—and what motivates
decades along with increased globalization their ongoing participation—illustrates
of commerce means that MNCs are increas- several drivers of their global citizenship
ingly being called upon to deal with issues agenda:
that used to be considered primarily in the
public policy or civil society arenas. Here, too, • Identification with values: One of the major
the participants acknowledged that social and reasons these MNCs joined the Compact
environment issues posed material risks for is that the 10 principles represent an
their businesses, on the one hand, and also extension and reinforcement of existing
select business opportunities, on the other. company values. The decision to embrace
But they acknowledged that to truly address the principles reflects “who we are.” MNCs
global issues “no business can do it on its are spread out globally, often the product
own.” This stimulated reflections about why of multiple acquisitions and mergers. In
companies joined the UNGC. key respects, the values they articulate,
including commitment to UNGC prin-
When Kofi Annan called for a “global compact ciples, serve as a common standard or kind
of shared values and principles, which will of “glue” that holds the extended enterprise
give a human face to the global market,” he together. Many MNCs have updated their
clearly hit a nerve in some leading corpora- values statements and codes of conduct
tions, which were already struggling to give over the past decades to speak to their
corporate values life and meaning to their global workforce and take account of the
employees, shareholders, and customers, and practical dilemmas posed by globaliza-
to gain a measure of the trust from others in tion. Participation in the UNGC is a way
society who are more skeptical about their of affirming these values and, over time,
work and suspect of the motives of large



testing and refining them in practice. • Power of association: Some companies
find that it is useful to join because there
• Competitive advantage: Some early signa- are issues being raised relevant to their
tories found that signing on to the UNGC industries, because new recruits are asking
put them into a leadership position and about whether they are involved, and
provided a platform for potential competi- because they find that their employees and
tive advantage through differentiation. other stakeholders take pride in the fact
This means communication about UNGC that the firm has made a commitment to
membership within and outside of the principled action through a global associa-
firm. Of course, stepping out into the tion. In addition, there is learning occur-
lead is not without risks, especially when ring in peer networks that they need access
social, environmental, or governance prob- to—being part of the UNGC allows firms
lems are found in a company, as is likely to participate in forums where exchanges
to happen in all big human enterprises. take place through the convening power of
Other sources of competitive advantage the UN and where, on occasion, they can
derive from external validation from other even meet with competitors.
actors in society and from meeting and
exceeding stakeholder expectations by • Being part of the solution: A final reason
taking the lead on issues important to their for initial and sustained participation in
interests and constituencies. Here the the UNGC is to become part of the process
UNGC helps companies put those issues of solving some of the world’s prob-
on the table. On the other hand, compa- lems, especially when those problems are
nies that joined when the Compact was affecting the corporation itself. The prin-
already firmly established noted that they ciples themselves, coupled with the UN
were at risk of possible competitive disad- Millennium Development Goals, speak
vantage because industry peers and stake- to high human aspirations that appeal
holders had joined. to some companies and are embodied in
their visions. In addition, since the UNGC
• Driving principles into action: Implementa- fosters multisector collaboration, raises
tion of the principles can also drive prog- important issues, and provide numerous
ress within operational units, through learning forums and tools, it can be a ready
more transparent reporting and more and relevant vehicle for MNCs to take
structured thinking about the specific action on important global issues. Impor-
issues outlined by the 10 UNGC prin- tantly, the concept of becoming part of the
ciples. This creates a new role for corpo- solution allows companies to begin taking
rate responsibility discussions about what seriously the “what’s next?” question with
types of questions need to be asked, what respect to corporate responsibility and
reports, analyses, and inquiries need to be their core purpose, as well as dealing with
developed internally, and why, how, and specific principles and related social issues.
what initiatives should be replicated.



These pragmatic motives for signing the contend that there may be a new conscious-
UNGC principles were discussed openly ness emerging among MNCs and their
at the Leading Companies Retreat. Still, it leaders, one that puts business proactively in
was acknowledged that the decision to join a leadership role to improve society. In this
was not easy or smooth in all cases. For frame, some companies are already serving
instance, some of the leaders in a U.S. signa- as role models for others, making signifi-
tory had raised objections to the labor prin- cant investments in developing countries to
ciple about collective bargaining, concerned help people move out of poverty, while others
that this would put the company “on record” work effectively in disaster situations, have
in support of labor unions. In others there made fresh commitments to relieve disease
were concerns that support for the principles and suffering, or sought to foster other social
would open their firm to litigation should any benefits through their businesses.6
“violations” of the principles ensue. There
was also mention of peers in companies who At a basic level the aspirational power of the
regarded participation in the UNGC more or UN Global Compact is about the animating
less as “window dressing”—a “nice but not power of such ideas and about promoting
necessary” commitment or even a public rela- such movement within and across firms and
tions exercise with little relevance to running sectors around the globe. The next set of
the business. discussions focused on how UNGC principles
have been integrated with the “value systems”
By comparison, other participants found the of firms and might help to transform the very
UNGC an “inspiring document” that had purpose and role of leading multinational
practical relevance and import for their firms. corporations.
The inspiration and practical value is reflected
in the motivations of the majority of the Principles and company values
participants in the UNGC. A 2007 survey of The companies present, at the leading edge of
participants found that many joined because corporate responsibility, found real resonance
it “increases trust in the company” (cited by with their corporate values and the UNGC
63 percent of members polled) and helps the principles. Like many firms, moreover, they
firm “address humanitarian concerns” (cited are attempting—through word and deed—to
by 52 percent).5 determine how the world could be better off
because of the company’s business model and
While not discounting the short-term finan- resources. Several companies in the midst of
cial expectations on companies, and the this transition spoke at the meeting of their
limits to virtue in markets, there are some experiences. Nestlé S.A., for instance, is trans-
who contend that companies will be both forming from a food and beverage to a nutri-
able and willing to deal with the social and tion, health, and wellness brand. Telefónica
ecological problems they are implicated in has embraced the “spirit of progress” to
and that a new era of business-driven corpo- enhance people’s lives, the performance of
rate responsibility has begun. Moreover, some business, and the progress of communities.”



A snapshot of their remarks: Experiences: UNGC principles help to
prompt reflection, trigger internal debate,
• Nestlé S.A., from Switzerland, included inform the scan and update management
the UNGC principles directly into its systems, communicate internally and
Corporate Business Principles as of 2002. externally and to facilitate a post-merger
Compliance with these business prin- need to link the organizational cultures of
ciples, which also commit to other guide- the previously separate companies Sandoz
lines on specific areas (WHO, ILO, ICC and Ciba.
business charter, etc.), is audited internally Challenges: Defining responsibilities clearly
and externally. The Corporate Business without isolating them from one another
Principles later became the cornerstone of and operations of the business; after
Nestlé’s three-layered corporate responsi- several years as a UNGC signatory finding
bility model which goes from compliance, new ways to maintain the inspiration of
to sustainability, to Creating Shared Value the 10 principles, and creating learning
(CSV). As part of its business strategy, the systems.
company commits to generating value for
both its shareholders and society in the • Telefónica, founded in Spain, used the
countries in which it operates. principles to transition from using its
Experience: UNGC Principles serve both ethics code as a “defensive tool” to a
an “aspirational” and a “catalytic” function. “support tool” for cultural change, from
Challenges: Development of comprehen- image improvement to a key driver for
sive metrics to measure the company’s generating revenues, reducing costs, and
development impact; develop healthier and measuring client satisfaction.
more nutritious products that generate Experiences: Business principles, consis-
both consumer benefit and create busi- tent with the UNGC framework, help mini-
ness value; translate the UNGC labor and mize the company’s impact on its value
human rights principles into practical chain and reinforce social aspirations, such
guidelines. as digital inclusion and philanthropy.
Challenges: Changing attitudes to recog-
• Novartis, also based in Switzerland, used nize corporate responsibility as a driver of
the principles to spearhead good busi- the business; incorporating diverse stake-
ness conduct. This meant refocusing its holder views; ensuring across-the-board
citizenship on “how you do business” and communication of ethics and integrity in
“what businesses you are engaged in.” The everyday jobs; promoting social inclusion
pharmaceutical crated a corporate steering and maximizing social impact. The key
committee, devised new, issue-related poli- premise: Doing the business right.
cies, conducted audits, revised its appraisal
systems to incorporate values and respon- These presentations prompted discussion
sible behavior, undertook e-training of about how actual implementation of the
staff, and aligned its assessment/incentive UNGC principles demands careful atten-
systems. tion to and reflection on the company’s own



core values to determine where and how the issues, and by stimulating attention to corpo-
principles can drive a firm’s economic, social, rate policies and performance in these areas.
and environmental agenda. It was noted, for Several of the companies at the retreat used
example, that for companies seeking to make the UNGC principles to raise needed ques-
their own values come alive, the core prin- tions, undertake analyses, dialogue with staff
ciples of human rights, labor rights, sustain- and critics, prepare reports, and consider
ability, and anti-corruption embedded in the what kinds of initiatives should be under-
Global Compact provide both a supportive taken or replicated. Here are some examples:
and enabling framework that can enhance
what is already developing in a firm. By • Dialogue about “Who We Are:” “What kind
comparison, for companies new to the of company are we?” “What do we stand
demands of global citizenship, the principles for?” “Where are the gaps between stated
provide guidelines that help them move more values and operating practices?” Adopting
quickly down a path of greater responsibility. principles of responsibility as broad and as
fundamental as those of the UNGC invites
For much of the world outside of corpora- companies to consider their values and
tions, the credibility of corporate responsi- purpose afresh and to dig deeper into the
bility initiatives is questioned, particularly content of their business principles, codes
when there is a sense that companies are of conduct, and compliance frameworks.
using them to enhance their reputations or
deflect criticisms, or solely for the purposes • Surface issues and challenges: Some issues
of profit-taking. Motivations do matter and, are not clear, and moral dilemmas arise in
despite tensions that might exist between the business world even when there are
doing good and doing well, both sets of principles, values, or a code of conduct to
motivations are typically at play when firms help guide decision making. Should, for
adopt responsibility principles. There was example, UNGC member companies work
in the meeting a view that reputation-based in countries where there are human rights
approaches to corporate responsibility and abuses? What happens if they acquire or
“signing up” to the UNGC principles could contract with a subsidiary that is working
only take a company so far. How do compa- in one of those places, or that doesn’t
nies integrate the UNGC principles into their conform to other UNGC principles? Under
company value systems and visions? these circumstances, companies can use
their own codes, the UNGC principles, and
How to Bring Vision and Values to Life such to consider the moral, commercial,
The process of implementing Global Compact and values-based risks in handling these
Principles can serve as a “lever” for driving matters. Outcomes may not satisfy all
progress within companies and into opera- stakeholders.
tional units by putting matters like human
and labor rights, environmental concerns, • Communicate with stakeholders: Many
and corruption onto the corporate agenda, companies face skepticism and a lack of
by structuring thinking and debate on these trust from critics who believe that corpo-



rations, particularly MNCs, care only companies might not be used to define or
about self-interest. Creating authenticity redefine values but rather to test them in a
in large corporations involves moving global context and add nuances to existing
away from PR spin toward embracing real thinking, language, and frameworks.
principles and values that translate into
action. At the same time, companies are However, other companies, even very large
profit-making entities and seek business ones, are considerably less far along this path
continuity, a form of sustainability for the of bringing values to life—or have yet to even
firm. Reporting on the UNGC principles begin. And many small and medium-sized
and the public disclosure of progress enterprises (SMEs) have neither a framework
made can help companies to “walk the nor many tools and resources available to
talk” and show responsiveness to external help. There are clear opportunities in these
stakeholders, including other businesses, cases to spread these best practices and scale-
customers, potential recruits, and NGOs. up the implementation of principles like
the UNGC’s and to assist companies to take
• Lift up corporate purpose: The 10 UNGC steps, appropriate to their culture, values, and
principles speak primarily to business particular strengths and limitations.
conduct. A discussion of the principles–
–internally and with stakeholders—can Another concern centered on the role of
also generate new possibilities for action middle managers and employees in effecting
and innovation. Several companies keyed needed change. For middle managers and
aspects of their corporation vision to the employees, driving down the UNGC’s prin-
UN Millennium Goals and other goals with ciples into the corporation means finding new
wide societal and global impact. This takes templates for action that incorporate things
companies to the fundamental question: like stakeholder input, sustainability objec-
“What will it take to go beyond compliance tives, and accountability tools. Supportive
to true transformation based on principles structures, like an organization-wide steering
and values?” committee, responsibility goals, and training
were emphasized. In bringing values to life,
This discussion on the UNGC principles and it is not just the principles that need to be
corporate value systems led to diverse reflec- taught and understood, but also the “how to”
tions on how MNCs can (and do) work. Many of making change in operating practices. One
firms present at the retreat have corporate example raised in the meeting was that of
visions supported by strong statements of line managers who attended a workshop on
values, drive their internal codes of conduct sustainability prior to a major new construc-
into supply and distribution chains, and use, tion project, were excited about the concepts,
among other tools, key performance indica- then went out and did things exactly as
tors (KPIs) to motivate and document imple- before. The message back to management:
mentation of the company’s own values. It “Look, we go out to work with a template
was agreed that UNGC principles in such telling us how to do this work and that’s how



it needs to get done. If you want things to • Aspiration: A final theme centered on
change, you have to tell us how to do things the aspirations of an enterprise. Discus-
differently.” sant David Cooperrider reflected how the
UNGC had sought to unite the strengths of
In summing this discussion three themes markets with the power of universal ideals.
about vision and value systems associated A new corporate responsibility agenda is
with global citizenship were stressed: moving firms from a stance of “doing less
bad” to “doing more good.” This involves
• Authenticity: One broad theme that replenishment and regeneration in society
emerged clearly was that adoption of the and the natural environment. It means
principles and implementation of values connecting principles to policies to opera-
needed to be based in authenticity. One tional practices and learning mechanisms.
change that demonstrates authenticity It also means setting bold goals.
is when questions are raised related to
values or principles, like “Does this specific Principles as a business driver
action really fit with our values or social The next section of the retreat concerned how
commitments?” “Have you thought about companies used the principles as a driver of
an alternative approach?” These types business activities and value creation. Three
of questions come up in decisions about main avenues were highlighted: 1) incor-
recruiting, hiring, and promotions, about porating the principles into compliance,
making investments where considerations accountability, and management control
for energy, water, human rights, or sustain- systems; 2) representing the principles in
ability are in play, and about many other internal and external communication and
matters. Companies can gauge to what social reporting; and 3) addressing the prin-
extent core values have been driven into ciples in new kinds of products and services,
operations when every employee can—and both philanthropic and commercial.
often does—ask those types of questions.
Three of the MNCs, based in mature markets,
• Alignment: A second theme concerned spoke of how they used their principles to
the alignment of values throughout an shape their business agenda. BBVA’s agenda,
enterprise. The UNGC principles and a for one, includes financial inclusion, respon-
company’s values provide a template that sible lending, and community investment,
helps guide action at the corporate level. among others. Dow Chemical, seeking to
The principles also need grounding at the be the “largest, most profitable, and most
local level, where different geographies, respected chemical company in the world,”
cultures, and specific issues, such as child was inspired by the UN Millennium Develop-
labor, human rights, and land management Goals when it set its 2015 Sustainability
ment, necessarily raise new questions and Goals. Royal Dutch Shell, a leader in transpar-
may mean different implementation strate- ency and social reporting, is focusing its exper-
gies—all guided by principles. tise on a CO2 management strategy which is



influenced by values and principles. A brief food, housing, and human health.
look at each: Experiences: UNGC helps to reinforce a
strategy focused on four themes: 1) driving
• BBVA (Banco Bilbao Vizcaya Argentaria), financial discipline and low cost; 2) setting
based in Spain, emphasizes “sustain- the standard for sustainability; 3) investing
able value creation” based on “profitability for strategic growth; and 4) building a
adjusted to principles,” and three strategic “people-centric performance culture”;
pillars: principles, innovation, people. partnerships with other UN agencies and
Beyond a commitment to developing groups; multi-party ventures.
society, corporate responsibility is a driver Challenges: Overcoming past controversies
for “differentiation and sustainable value and reputational difficulties in the face of
generation.” a rapidly changing product-market busi-
Experiences: UNGC is a framework to ness model; building a principle-centered
improve business by increasing the compa- performance culture; creating a culture
ny’s chances of being selected for socially and strategy that uses chemistry to address
responsible investment portfolios, working the world’s most pressing challenges—in
through human resources to make the an environmentally sustainable way.
financial sector more attractive, particu-
larly in Latin America; working on finan- • Royal Dutch Shell, based in the Nether-
cial inclusion and financial literacy to help lands and the U.K., revised its Business
create future markets. Principles in 1997 after environmental
Challenges: Overcoming reputational risk by and sociopolitical crises. UNGC prin-
delivering value in a balanced way to stake- ciples are overlaid on existing strategies
holders; using community investments and standards, and are managed through
and product innovations to build a strong a management control framework that
license to operate; pragmatically deter- includes assurance, reporting, and trans-
mining how to operate responsibly across parency. Company core values emphasize
numerous countries. integrity, respect for people, honesty. The
company also has made a commitment to
• Dow Chemical Company, from the U.S., contribute to sustainable development and
has focused on improving what is essential to help secure a responsible and sustain-
to human progress by mastering science able energy future.
and technology––and also the human Experiences: Developing and testing
element, the one not found on the peri- scenarios on energy futures.
odic table. Dow is not only continuously Challenges: Moving forward based on
working to minimize the impacts of its possible scenarios that deal with hard
operations but is also striving to provide truths, e.g., global energy demand is
society with greater value by producing rapidly growing, while supplies cannot
products that help mankind address its keep up, and more energy means more
most pressing problems such as water, CO2 (global warming); determining what



each unit can contribute to positive energy their values, such a framework ensures
outcomes through a process of enlightened that companies “walk the talk.” Corporate
self-interest. responsibility can be implemented through
the management framework used to drive
As participants debated how values could other types of change, which include
drive business activity, one leader present decision making criteria and methods
reminded, “Strategy isn’t set by a code or prin- for monitoring, reporting, and transpar-
ciples, but by what the world needs and what ency. One company spoke of connecting
we’re capable of delivering.” On this count, its corporate responsibility implementa-
another observed that companies have a tion to a risk-management framework. In
choice: they can basically leave it to society to turn, one of the academics presented an
figure out what is going on, or they can create approach to “total responsibility manage-
a set of business principles that frame how ment” that provides a comprehensive
the company wants to do business respon- implementation framework.7
sibly and roll them out company wide. This
sharpened conversation about how compa- • Connect actions to mission: In the most
nies might move from a “value- or principle- successful cases where principles have
based” commitment to corporate responsi- become a core driver for value creation and
bility to effective on-the-ground practices. business growth, mission is the key lever,
as it represents “What we do.” Mission
How to Put Principles into Practice connects corporate aims to capabilities,
Several “levers” crucial to implementation and aspirations with resources. Several
were noted: noted how the compliance and reporting
systems of leading MNCs are beginning to
• Lead the process: Select companies spoke “look the same.”
about the need for and value of leadership
in implementing corporate responsibility. • Take an integrated approach: Discussant
One company used a CEO-driven, top- Carolyn Woo noted that each company’s
down approach to integrate its principles, approach to implementation was built
developing training sessions at all levels, on its unique personality, the salience of
and building on labor, safety, environment, particular issues for the business, and the
and anti-corruption policies and practices development of an integrated approach
to create a business-based platform of to corporate responsibility. Recognizing
shared value. differences in timing and circumstances,
the conferees noted that this involves
• Establish a framework: For other com- embedding corporate responsibility into
panies, the key was developing a manage- policies and processes, making it part of
ment framework that places at its core the the corporate governance system, and
value proposition of responsibility and using it to create value propositions in the
sustainability. In situations where compa- marketplace. In one company corporate
nies have already worked hard to articulate responsibility is positioned as a driver for



generating revenues, reducing costs, and management is crucial; operating with
growing the firm into a leadership position multicultural workforce and multiple legal
in its industry. This reflects a company- frameworks; extending company ethos to
wide effort that began with redefining its suppliers and vendors.
vision and then devising the machinery
needed to ensure that the company could • CEMEX, based in Mexico, is a leader in
do its business right. social innovation and wants to deepen its
employee engagement and build middle
It was acknowledged that there are multiple management understanding of corporate
drivers of the corporate responsibility agenda citizenship.
and that these, too, vary from firm to firm Experiences: UNGC provides a mechanism
and in different markets and social contexts. for companies to learn from one another.
Accordingly, we heard next from two compa- CEMEX built out its Patrimonio Hoy
nies not based in OECD (Organization for program to provide small loans for families
Economic Cooperation and Development) to build houses, a combined business and
countries. social strategy.
Challenges: Developing measures of social
• Infosys, established in 1981 in India before impact; developing in-house systems to
liberalization and reforms, the company move strategy globally; linking short-term
joined because the UNGC principles and long-term needs and interests, particu-
reflect the company’s philosophy toward larly in tough economic times; training
employees, clients and all other stake- and educating middle management; and
holders. The company’s values encompass integrating the web 2.0 culture into the
customer delight, leadership by example, company’s culture.
integrity and transparency, fairness, and
pursuit of excellence. It was the first These two presentations resurfaced the
company in India to provide audited quar- importance of UNGC principles in emerging
terly reports (a practice now mandatory in markets where they help to signal to host
India). It also shows human resources as governments the responsible role that private
an asset on its balance sheet. enterprise can play. In the same way, they
Experiences: UNGC principles aligned inform a framework for “soft-governance”
with business drivers: employee recruit- within the firm. Noting the use of principles
ment/retention/development, supporting to frame implementation of corporate respon-
local communities, resource management sibility in these cases, discussant James Walsh
(energy, water, paper), green building prac- reminded that corporate responsibility hinges
tices, pursuing fair and transparent busi- importantly on the business needs of com-
ness practices, and abiding by the law of panies. Many, in turn, spoke of its import to
the land. customers, business partners, and employees
Challenges: Local environment has not and the need to apply continuous improve-
always been conducive to operating with ment to corporate responsibility. A company
principles, so maintaining leadership exemplifying this presented last.
on ethics, fairness, and human resource



Novo Nordisk, based in Denmark, offers Considerations on putting principles
an integrative approach to principle-based into practice
management: corporate responsibility is Integration of the 10 UN Global Compact
represented in its values and practices (the principles into company strategies and oper-
Novo Nordisk Way of Management) and ating practices is critically important to the
its products, services, and partnerships. Its long-run effectiveness of the UNGC initiative.
values are: accountable, ambitious, respon- The 2007 UNGC survey of member compa-
sible, engaged with stakeholders, open and nies finds that large majorities are embed-
honest, ready for change. ding key principles into codes of conduct and
Experiences: Incorporated UN Millennium policies, but fewer are doing so in regard to
Goals into its objectives and audits its “triple management and employee training, and
bottom line” performance through internal measurement and accountability, and fewer
value audits, employee involvement and still in commercial strategies and practices.
external assurance. Collaborates with major
NGOs or multi-lateral organizations on For the majority of companies at this retreat,
specific initiatives. the Global Compact principles aligned with
Challenges: Dilemmas, interactions, and trade- their values and have become embedded,
offs in operating with the triple bottom line more often than not in a explicit way, into
within an industry that has low public trust; their mission, management systems, and
emphasizing innovation but simultaneously market development strategies. These com-
dealing with risks; building the ‘business panies have covered a first stage of the
case’ to support full embedding of the triple journey from adopting the Global Compact
bottom line across organizational areas and Principles as a framework for continuous
business tasks. progress on corporate citizenship to the
beginnings of a second stage where the prin-
Other companies at the retreat that signed the ciples have helped to generate the strategies
UNGC early on used it to help unite cultures of the business itself.
after a merger, drive a new strategy or corpo-
rate vision, or create a systematic approach Still, several factors seemed to be important to
to implementation. For one company, that address along the way:
involved internal reflection on company
values, analysis and research on social issues, • The DNA question: In many companies,
building a leadership structure that connects corporate responsibility issues and prin-
across functions and areas of expertise, estab- ciples are still not driven down into the
lishing a help desk, elaborating relevant poli- middle and lower levels of the organi-
cies with detailed guidelines that help define zation. Further, it is clear that in many
responsibilities clearly, and linking principles companies values inform but do not drive
to management systems. strategies, which can raise some question
about their relevance when “reality bites”
or tough times hit. To the extent that values



actually are baked into the strategy and part across the company, generating alignment
of the value proposition of the firm, they of values and strategic approaches, while
are more apt to endure. still providing necessary flexibility at the
local level, if basic operational processes
• Soft values and hard structures: There have been developed that help drive those
is some tension between implementing values throughout the enterprise.
principles via a values-driven versus more
structured, metrics-based approach. Vision • The role of metrics: One thing that can be
and values can bring the principles to life, effective for companies trying to integrate
but structural arrangements reflect how principles into practice is to ensure that
power is allocated in the company. Only they are incorporated into the company’s
when values are embedded in operating “dashboard,” “key performance indica-
strategies can they effectively be trans- tors,” balanced scorecard, and similar
lated into goals and everyday business mechanisms which are used to manage
practices. To make this work requires and control the enterprise. In many cases
supportive structures with real authority data are available, but need to be consoli-
and centrality. In many companies, the dated and analyzed for decision making.
individuals responsible for implementing It is particularly important that results
responsibility are located in staff jobs on values-driven metrics be included in
and have scant connection to operations. the reward system, since managers and
This is what makes coordinative struc- employees will work toward metrics on
tures, responsibility matrices, and oper- which they are being rewarded. Further,
ating reviews a crucial part of integrating and importantly, if metrics are to be useful,
principles into practice. In this way, the they need strong constituencies who need
shift toward high-impact implementation and understand them, and who can—and
is accompanied by a parallel shift from will—use them. Just as the quality move-
communicating performance to a new ment was driven in part by customer
emphasis on governance arrangements. demands, so is it helpful in the first stages
to identify constituencies interested in key
• Global policies and strategies and local social and ecological issues.
engagement and operations: Other
issues arise between what happens at The leap in implementation observed—truly
headquarters and what needs to happen a new stage in implementation where the
within different business, functional Global Compact principles have become part
and geographical units of an MNC— of the business strategy itself—is happening
that is between the global and the local as a new stage develops, one which is likely to
or “glocal.” Cultural issues, and different encompass innovations developed in collabo-
business models in different units (or ration with actors across sectors and to foster
functions), can be guided by a common a capacity and willingness to engage in novel
set of values, core strategies, and policies ways around problems whose magnitude goes



beyond any one nation’s or institution’s capac- Many of the companies at the Leadership
ities. A summary of the collective conversa- Retreat are venturing into this socio-commer-
tion on these matters follows. cial frontier, validating the point made by
Peter Drucker that social and ecological
To the frontiers of global corporate problems are often business opportunities
in disguise.8 The key is innovation, whether
citizenship
technological, bottom of the pyramid, social
In a very real sense, serious efforts to imple-
entrepreneurial, or collaborative, yet the ques-
ment the UNGC’s 10 principles demand
tion is how to scale up successful initiatives.
significant organizational change that goes
well beyond traditional notions of corporate
The corporation’s role in solving global prob-
social responsibility in the form of compli-
lems remains unclear, with acknowledgement
ance or philanthropy. The challenges in the
that there are limits to what companies can
world today, many MNC leaders are coming
or should actually do. At the societal level, it
to recognize, are not simply about how things
appears that there are not many companies
are produced (though important), but also
willing to stick their metaphoric heads up lest,
about what goods and services are produced,
like the sunflower that rises above the rest,
what purposes they serve, and for whom.
those heads get chopped off by social critics
Companies’ offerings, along with consumers’
or leave the company at a competitive disad-
choices, create major consequences for the
vantage. And there are few CEOs doing that
natural environment, resource use and distri-
today, with some notable exceptions, some
bution, and societal health, making the funda-
among the companies attending the retreat.
mental issue one of transformation. The
Certainly, there is some risk involved in step-
Boston College Center for Corporate Citizen-
ping forward, particularly in an era of intense
ship has termed this a movement that takes
competition and heightened attention to
firms beyond current criteria associated with
short-term financial results, yet the pressing
being a “good company.”
needs of the world demand courageous and
more creative leadership from corporate
On this count, there are clear shifts in the
leaders as companies continue to assume
marketplace demands for healthier, more
greater global responsibility.
energy efficient, and socially useful prod-
ucts and services. Studies suggest that the
This challenge is compounded with the fact
LOHAS (Lifestyles of Health and Sustain-
that partnerships (public/private, sectoral or
ability) market will grow from $200 billion
across sectors, or related to a specific issue)
in sales today to $420 billion in three years
with a broad scope and wide societal impact
to $845 billion by 2015. The related “ethical
are not very well developed; differing agendas
consumer” market is also growing, not only
of public authorities and companies, lack of
in western societies but around the world.
trust among potential partners, and the lack
For leading companies, the combination of
of a truly multilateral dialogue are obstacles in
market opportunities and value-based princi-
this area.
ples has become a means of optimizing both
shareholder and stakeholder value.



Yet, for many years, the state role in gover- • Co-create multi-sector partnerships and
nance has been diminishing. Now there is innovation: In the context of the retreat,
increasing recognition, particularly on the the willingness of MNCs to undertake
part of leading companies, that the rules of new partnerships for specific issues and
markets, the rules of competition, the rules of regions became apparent—“Business can’t
the game for business—as well as supports do it alone.” This theme resonated through
and infrastructure––demand better global discussions but led several of the compa-
governance. Certainly there is an emerging nies present to form partnerships with
need for global governance to deal with big other businesses, NGOs and governments,
issues—the food crisis, a water crisis in the and to take the lead in forming multi-
future, climate change, humanity pushing the sector alliances aimed variously at respon-
limits of natural resources, and similar issues sible supply chain practices, lending,
that go well beyond the ability of any single health care, and environmental sustain-
nation-state to handle. Given the global clout ability. Plainly co-creative multisector
of corporations, it is evident that nation-states collaborations need to go well beyond
and multi-lateral institutions cannot establish traditional approaches to public-private or
any kind of global governance without corpo- social partnerships, but they demand new
rations participating in the process. understandings of the language, culture,
operating dynamics, and goals of each
Reflecting on these developments, four items sector involved. Many collaborations fail on
rise in prominence on the evolving agenda of just these grounds, and there are of course
leading MNCs: many significant barriers to multiple orga-
nizations working together effectively to
• Take a leadership role: How do companies address big problems like climate change,
deal with the risk imposed by “sticking the coming water crisis, or social equity.
their heads up” above the crowd and One important skill to develop involves
assuming a leadership position? How learning how to lead-in-partnership.
do individual leaders gain the courage
and credibility to step forward? One step, • Establish or join new forms of global
highlighted at the meeting, is defining an governance: The move toward multisector
ennobling mission and setting far-reaching innovations hinges on business gaining
goals. This was evident among attendees a clear and compelling voice in public
in their embrace of select UN Millennium policy. It was noted that too often the
Development Goals, in setting ambitious corporate responsibility and government
corporate responsibility agendas, and in relations arms of MNCs are not aligned
public commitments to “make a better and that companies often “talk” about posi-
world” in their areas of expertise through tive social change but put their “money”
the business models and offerings. behind politicians and policies that impede
it. Many of the leading companies at the
retreat recognize the need for better public



policy and for regulatory frameworks that orative formations for global management in
create a level playing field on which they a new world of constraints.
can operate successfully, without loss of
competitive advantage if they take social UNGC––where to from here?
risks, adopt higher standards, or engage in What are the prospects for progress on these
collaborative activities. An initiative like the four fronts? Some might argue, as Micro-
Global Compact could play a significant soft founder and former CEO Bill Gates did
role concerning this new frontier. in January 2008 at the World Economic
Forum, that there is a need for a new form
• Get ready for corporate citizenship 2.0: of capitalism—a “warm” version, or what
Finally, the firms present also acknowl- Gates termed a more “caring capitalism,” to
edge being neophytes on capitalizing complement the “cold.” One conclusion of the
on the internet and web social networks two-day Leading Companies Retreat is that
and technologies for purposes of iden- principle-driven approaches fall on the warm
tifying issues, communicating intent, side because they emphasize an enlightened
dialoguing with stakeholders, and mobi- self-interest that squarely places businesses in
lizing global involvement in pressing the societies and ecologies in which they exist,
social issues. Some of the urgency arises working for the betterment of all.
from the “power of one,” that is, the power
of a single individual or a few, to use the The UNGC principles have, in some leading
internet in ways that damage a brand glob- corporations, reached the point where they
ally, no matter what the facts might be have begun to significantly inform business
or the context involved. But more critical strategies and operating practices. Communi-
was the unrealized opportunity to scale up cation of this progress has been and remains
corporate responsibility and shared valued important. Included here are some “lessons”
creation that citizenship 2.0 ( a term from these leading companies on implemen-
coined by Telefónica) could offer. tation of the UNGC principles (See box on
page 21.)
Summing up, we see among these compa-
nies a shift from internalization of the Global Is it advisable for multi-lateral organizations
Compact principles, which will continue, to express views on the subject of corporate
toward tangible action on their societal and strategy and regulation beyond “universal
global impact. There is a sense of increasing principles”? Devising the world’s leadership
challenges and pressures on MNCs to be part framework and best practices on corporate
of global solutions. There is a latent demand citizenship is a bold agenda. Demand for
for new forms of global dialogue, for leader- corporate responsibility and sustainability
ship in the global arena, and for new forms has grown rapidly for the past 20 years, and
of complementarity with nation-states and companies are responding to those demands
multi-lateral organizations in order to jointly in many and different ways. The UNGC has
produce new policy frameworks and collab- been one important agent helping to accel-



Implementing the UNGC Principles: Best Practices

While some leading corporations have developed rigorous and systematic approaches to
managing their corporate responsibilities, using the Global Compact as a critical support, many
are considerably less far along this path. What has been learned and already written about in
numerous other UNGC documents, toolkits, and frameworks of action on corporate citizen-
ship, however, already provides a significant foundation for implementation, as do the experi-
ences of companies that have taken the lead on the implementation process. Rather than rein-
vent this wheel (although, of course, new ideas and additions are always welcomed), what is
really needed is to figure out how to convey the lessons that have already been learned by the
leaders to others less far along and to small and medium-sized enterprises (SMEs), which typi-
cally do not have the resources of an MNC to devote to social or ecological programs.

Clearly, many more companies need to learn what the leading companies have already
learned so that some of the social and ecological ills of the world can be better handled.
Interestingly, one conclusion from the practices of companies already engaged in imple-
menting the UNGC principles was that the tools, frameworks, and approaches needed may
already exist. Like other management approaches (e.g., total quality management or environ-
mental management), systemic approaches are needed and they need to be put into place
with the same kind of clarity and operationalization that these other systems have. These
approaches share certain characteristics:

• They are usually based on values, core principles, or value-based new developments.
• Dialogue with stakeholders, internal (employees) and external, is an integral part of all of them.
• Most take a continuous improvement approach.
• Transparency and reporting are very important.
• Rigorous analysis, similar to that for any other business problem, is required of companies
implementing corporate responsibility programs, whether internally around business prac-
tices or externally.
• Companies need to determine the relevance of issues and their significance to the
company and establish priorities.
• Corporate responsibility is typically integrated via the mission, vision, and code of conduct,
which when done effectively become core elements of the strategic framework of the
company. This integration implies changes in processes and procedures that ensure that
responsibilities are taken seriously.
• Leadership commitment and change of culture throughout the organization, as well
as structural changes to locate institutional oversight of corporate citizenship in the
company, are all needed.



erate and, to some extent, align this response among business school faculty at Case
through its principles of corporate respon- Western Reserve and among human rights
sibility, initiatives in the financial sector and experts at Harvard University, provide the
business education, and with select stake- kind of in-depth engagement that deepens
holders from NGOs and governments. Can it understanding and motivates action.
do more? Should it?
3. Promote partnerships and power sharing:
During the retreat, many of the MNCs high- The next stage will require stating bold
lighted a number of areas for potential action. goals, bigger than any one company can do
These include: alone, and requires “power sharing” across
firms and sectors. None of the current
1. Vigorously disseminate what we already UNGC’s 10 principles speak to partnership
know: We don’t really need new tools; the or power sharing across firms. Perhaps it
existing ones work, and there are exem- is time to develop the second goal of the
plar companies. Many of the tools and best Global Compact (to contribute to broader
practices of the MNCs have relevance for goals for development and a sustainable
not only other big companies, but also for and fairer globalization) into a roster of
subsidiaries and SMEs around the world. corporate responsibilities for consideration
The UNGC has recently developed and by members?
made available a toolkit on environmental
management. Development of other prac- 4. Establish policy and governance frame-
tical tools and dissemination of existing works: When issues are too big for one
ones is essential to the widespread implan- company—or one government—to deal
tation of UNGC principles. Tools also with, corporate responsibility principles
need to be applied across functional areas, are insufficient to address them. For issues
not just at the corporate level (e.g., within like climate change, the food crisis, or
marketing, procurement, accounting, child labor which transcend corporate and
R&D, operations) country boundaries, the UNGC is posi-
tioned to help develop and disseminate
2. Increase member collaboration: The next guidance on policy and governance frame-
stage for the UNGC and its progressive works. Perhaps these subjects, too, could
participating companies is one of innova- be part of the UNGC’s platform?
tion, co-creation, and joint work on social
problems. This requires collaboration Future Directions for the UNGC: Three
across sectors and across the business
Scenarios
community, even working with competi-
With these directions in mind, inspired by
tors. The UNGC annually has a full roster
the two-day conversation at the Leading
of hosted or co-hosted meetings to develop
Companies Retreat, we suggest three possible
and disseminate knowledge and prac-
scenarios for the future of the UN Global
tices. Very targeted ones, such as meetings
Compact.



Scenario 1: UNGC principles remain goals of place a new emphasis in setting out inclu-
aspiration and intent. sive initiatives and guidelines for corporate
collective action with regional and/or global
In this scenario, the UNGC continues to impact—that is, the Global Compact develops
focus on dissemination of its principles a new emphasis and global tools for prog-
and their continued application through ress concerning its second goal (catalyzing
dialogue and convenings. To a certain extent, actions by business in support of the broader
the UNGC principles have begun and will UN goals, particularly to address the world’s
continue to help to bring a wave of political development problems, in line with the UN
and economic reform, especially in devel- Millennium Development Goals).
oping countries, by guiding the conduct
of MNCs and informing the practices of Development and articulation of guidelines
emerging market corporations and industries. on the operation of extended supply chains,
protection of cross-national ecosystems, scal-
However, there are limits to this approach. able partnerships for development, and other
Over the next decades the price of commod- areas of global concern could help to inform
ities—oil, cotton, copper, etc.—will continue the principle-based decision making of
to escalate and the sustainability of the global companies. Many other groups have expertise
economy will be called further into ques- and a voice in these regards, but the UNGC is
tion. Imbalances in the global economy will uniquely positioned to identify and articulate
threaten the profitability of businesses and the scalable approach behind the practices
sovereignty of nations. Business leaders and and give them global authority.9
policy makers cannot afford to ignore the
implications. A key question is whether the Multinational companies are faced with chal-
UNGC and the actions and initiatives it facili- lenges of integrating two factors that affect
tates now will speak to these conditions. corporate behavior: different cultures and
peoples. Setting universal guidelines can help
Many foresee a need for a new era of global companies “think through” global operations
governance for corporate responsibility. and the practical implications of how they
Unless the UNGC expands its agenda and source materials and labor, produce products
scope, its principles could become less signifi- and services, and distribute their earnings.
cant for driving changes inside of business.
UNGC signatories will remain a part of the Many new management techniques such as
“club,” but will seek elsewhere for solutions to open-innovation, stakeholder consultation,
global problems of business and society. employee engagement, dynamic pricing, and
triple bottom line accountability schemes are
Scenario 2: UNGC sets guidelines for practical helping firms to achieve greater corporate
business applications on corporate collective responsibility. In many instances, however,
action with regional and/or global impact. there are no overarching principles behind
these practices that are agreed upon nor are
In this scenario, the UNGC and its members there any principle-based guidelines on their
responsible implementation and use.


united nations global compact Leading Countries Retreat

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