Leadership 101 – The Role and Responsibility of Directors – Part 11

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Please note that this pertains to South African Legislation, the King Requirements and Best Practice.

Ethical Leadership & Corporate Citizenship is the topic for today.

So let’s get right to it . . . What does this mean? The gist is that “Responsible Corporate Citizenship implies an ethical relationship between the Company and the Society in which it operates.”

Here are some of the key questions that Directors should be asking.

1. “Corporate citizenship, sustainability and stakeholder inclusivity requires judgement, balance and compromise. Does the Board have the right composition skills and reliable data to make these types of judgement calls?”

For me personally this means that the members of the Board must be able to differentiate between doing what is right and doing what is easy.

We live in a world where people’s own agenda, greed and personal goals are more often than not, out before the good and well-being of the Company, its employees and often even its own supply chain.

Yes making a profit has to be one of the main objectives of a Company or Organization, but you need to be aware of the consequences and beware of the cost.

2. “Have we assessed the moral and economic imperatives of Corporate Citizenship? Have we taken this into account when reviewing our Corporate strategy?”

This ensures that the manner in which the Company operates and that strategy that is implemented is both moral and ethical.

3. “Citizenship and sustainability risks may be obscure or indirect. How do we identify and manage those risks as well as opportunities?”

4. “Do we have policies in place that will guide every level of the business in terms of expected behaviours and practices and with reference to our interaction with all material stakeholders?”

The saying “if you fail to plan then you plan to fail,” certainly rings true here and is very pertinent to building a successful and sustainable business. Policies and procedures ensure that processes are properly followed.

5. “Do we measure the impact or lack thereof, of our Corporate Citizenship initiatives?”

Again in my opinion, “if you can’t measure it, you can’t manage it.” Making sure that processes and procedures are regularly updated and that they correctly used will highlight discrepancies in inconsistencies before they become damaging or huge problems.

Next time we will have a look at specifically what the requirements are around Governing Stakeholder Relationships.

 

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