Get on Board: Director-Level Involvement Has a Direct Link to Human Rights Performance

Recent reports of human rights violations in the fast fashion sector, clean technology industry and yes, even this year’s World Cup in Qatar all reinforce the obvious: If your organization is not paying attention to the risks of such violations across your value chain, you can be darned well sure that the awful details will make their way across conventional and social media. A company can hire a crisis management firm and explain away all they want, but the images will continue to tell the story.

Transparency about human rights isn’t only about self-policing; there is a strong correlation between disclosure and performance on this challenge, according to a recent report from the World Benchmarking Alliance. Since this organization first started analyzing the human rights record of the global business community in 2017, it has found that respect for human rights is increasing. Nevertheless, there are still plenty of gaps that is causing human suffering worldwide while putting many companies’ reputations at risk.

What makes the biggest difference when it comes to a company’s human rights performance? According to this survey’s findings, companies that elevate such responsibilities to the most senior levels of management overall have solid records on this front. From the Alliance’s perspective, the companies that saw their human rights scores increase from zero in a few years did so because of their boards’ involvement. “Out of the companies that improved the most on [human rights], the majority (75 percent) have senior level responsibility for human rights and allocate resources and expertise for the day-today management of human rights within their operations and supply chains,” concluded the report’s authors.

On the other hand, 70 percent of the companies that still score a zero do not have any such resources at the senior management or board level at all. 

Clearly, it’s not enough to have a written and public commitment to respect and address human rights. You’ve seen the prose on many a sustainability section of a company’s web site — the prose is fairly formulaic: “At Company XYZ, we believe we need to take on climate change and we are also committed to respecting human rights.”

That isn’t enough: Companies need to explain how they are executing on these commitments. To that end, only about 25 percent of the companies the Alliance surveyed have actually disclosed how they engage with individuals and organizations on these challenges. So, how do many companies actually handle grievances related to such problems? Well, no one really knows, as more than 90 percent of the companies surveyed do not share how they engage with workers, communities or groups such as NGOs that are behind a grievance.

Therein lies the big problem behind the currently level of human rights performance within the global business community: At best, the Alliance describes companies’ current M.O. as overall, “hands off.” The conventional approach is to have a “code of conduct” or a set of policies that explain to a company’s suppliers how to handle human rights problems; however, the support and monitoring of such programs is often lacking. The risks that often land companies in hot water — child and forced labor, land rights, women’s rights and fair wages — often fall by the wayside, until such violations end up public and shared across various media platforms. To the Alliance’s point, only about one-third of all companies actually articulate their policies related to such challenges. Further, transparency on these problems are lacking, as only 2 percent of the companies surveyed actually disclose the number of people who are affected by such violations.

Finally, COP27 offers this reminder: Any level of commitment to taking on climate change doesn’t mean a company can turn a blind eye to human rights. Global leaders increasingly talk about a just transition, that is, climate action plans that are also socially equitable and include the needs of the most disadvantage community. But as human rights activists made clear in the weeks leading to, and during, COP27, the world’s climate and fight for human dignity worldwide are inextricably linked — one cannot succeed and ensure fairness for all without the focus on the other. In fact, another Alliance survey found that companies with a solid human rights score also show promise when it comes toward the shift to a just transition — and again, companies that score low on that index are flagging and flailing when it comes to addressing climate change.

As many workers worldwide are underpaid, would it be too much of an ask to connect human rights to executive pay? Not from the Alliance’s perspective. “Linking corporate performance on human rights to executive compensation,” concluded the group, “could increase accountability and incentives to respect human rights at the highest levels of the company.”

Image credit: Kuzzat Altay via Unsplash