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Watson Dairy Consulting - Corporate Social Responsibility

The challenge before all executives is to achieve a balance between tailoring the CECO job to an organization’s unique characteristics while also providing the CECO with the necessary authority and tools.

DRIVING PRINCIPLED PERFORMANCE & Leading Corporate Integrity. For ethics to be a priority then company ethics must be championed and fully supported.

The Bottom Line: CECOs Add Value
CECOs whose roles are clearly and properly defined and who are empowered to create and maintain strong ethics programs:
• Help provide shelter from severe sanctions in the event of legal/regulatory difficulty;
• Contribute to the establishment of an enduring ethical culture;
• Help other corporate leaders prevent misconduct or effectively address it when it occurs; and
• Provide a public demonstration of the organization’s commitment to integrity.
The Cornerstone: A Clearly Defined Role
To truly be a value-added function, the CECO must have a well defined role and be given adequate resources. This demands a balance between tailoring the job to an organization’s unique characteristics and providing the CECO with the basic authority and tools to successfully fulfill the role.
At minimum, a CECO should be:
• Held accountable to the governing authority while carrying out its
delegated fiduciary responsibilities;
• Independent to raise matters of concern without fear of reprisal or a conflict of interest.

Many executives and boards have not yet realized the potential of their CECOs. Properly constituted, the CECO investment is always worthwhile because, ethical conduct is a key ingredient in building and sustaining investor and stakeholder trust and in protecting society from organizational misconduct. culpability for missteps in ethics and compliance to the board of directors and senior leaders. The job is now far more than a CEO, CFO, or CLO can reasonably fulfill without assistance. The responsibilities of the chief ethics and compliance officer as a key player in protecting the organization’s governing authorities are now immense, ranging from training the board of directors to oversight of an internal audit of the compliance function itself.

The Issue
The stakes are high for every organization as research indicates that one in two employees still observe what they believe to be at least one act of misconduct each year, and the penalties are more severe for organizations that have not taken adequate steps to prevent and detect such behavior. Expectations of voluntary disclosure of transgressions to authorities and cooperation in government investigations are also heightened. A hard-won reputation can be lost in minutes through one scandal.

Watson Dairy consulting provides fully independent strictly confidential ad hoc Non Exectutive Director Services to manufacturers to help reduce corporate risk to the company, it's officers and shareholders

Corporate Social Responsibility is one of the increasing challenges facing Manufacturers, particularly those supplying the very young, very old, infirm or vulnerable in society.
Increased public awareness of environmental and human rights behaviour coupled with environmental fines and class action cases ensures that there is an increasing requirement for companies to identify, manage and communicate how they are implementing and monitoring their performance.
Taking into account today's informed investor and consumer, coupled with rapid mass internet communication then most CEO's would agree that ensuring responsible business practices is no longer an option but a new tool that has to be added to the set and properly used. The workforce, government and community as well as investors are increasingly taking into account corporate responsibility as a reduction of risk with a long term global perspective
The FTSE4Good Index is a growing investment index in the UK which indicates that this responsibility is set to increase.
A fully implemented Corporate Responsibility strategy gives clients and stakeholders the confidence that the company is addressing this area with full integrity whilst reducing risk.

What is exactly is Corporate Responsibility?

Corporate social responsibility (CSR), also known as corporate responsibility, corporate citizenship, responsible business, sustainable responsible business (SRB), or corporate social performance, is a form of corporate self-regulation integrated into a business model. Ideally, CSR policy would function as a built-in, self-regulating mechanism whereby business would monitor and ensure its adherence to law, ethical standards, and international norms. Business would embrace responsibility for the impact of their activities on the environment, consumers, employees, communities, stakeholders and all other members of the public sphere. Furthermore, business would proactively promote the public interest by encouraging community growth and development, and voluntarily eliminating practices that harm the public sphere, regardless of legality. Essentially, CSR is the deliberate inclusion of public interest into corporate decision-making, and the honoring of a triple bottom line: People, Planet, Profit.

The practice of CSR is subject to much debate and criticism. Proponents argue that there is a strong business case for CSR, in that corporations benefit in multiple ways by operating with a perspective broader and longer than their own immediate, short-term profits. Critics argue that CSR distracts from the fundamental economic role of businesses; others argue that it is nothing more than superficial window-dressing; others yet argue that it is an attempt to pre-empt the role of governments as a watchdog over powerful multinational corporations.

Infant Formula Manufacturers Corporate responsibility.

The reducing cost of technology coupled with rapid technology developments in nanotechnology, fractionation, testing and analysis of milk and other constituents for various health benefits is changing the market rapidly. Dairy Companies are investing huge sums of money into R&D and protecting findings with patents. This rapidly moving marketing environment ensures that the pressures are on for CEO's to ensure that full due diligence is observed in clinical trials and product marketing, and launch. The new food labelling regulations have ensured that many companies are now revising their claims and procedures.The responsibility link between the CEO, Marketing, R & D, Quality and corporate oversight board needs to be strengthened in many companies operating in the field of human nutrition. Any conflict of interest between CSR and corporate profits must be clearly identified and removed.

Leadership requires risk takers.

Risk takers need risk assessments coupled with marketing departments being made fully accountable and required to obtain signed authority from R&D for deviations from recommendations.

Infant Formula Manufacturers operate in a highly emotional and highly profitable sector and so the risks and reqawds are greatly increased. (as are the threats)

Decisions taken today on recipe and ingredient changes or label claims on health benefits should be formally structured with a final signature for CSR. The incident in China during 2007 with Melamine in infant formula may have been prevented had full due diligence on the formulations and Infant Formula Qualtiy Systems been carried out. The seriousness of the incident resulted in death sentences on suppliers and life inprisonment for senior executives who also narrowly escaped the death penalty. Despite this outcome the legal actions continue to today. Decisions are often taken by Marketing departments to market Infant Formula in developing countries using questionable ethical practices. Decisions made by Marketing departments lacking in CSR sometimes result in class action claims. A lack of CSR can haunt a company for years. Regardless of the product no longer being on the shelves, prosecutions can take place years after an incident has passed or a label claim deleted.

An analogy is the banks and the global collapse of the financial system. The banks and governments knew the risks 20 years ago but decided that everyone does this so why should we not?.

The Triple Bottom Line (TBL)

"People" (human capital) pertains to fair and beneficial business practices toward labour and the community and region in which a corporation conducts its business

"Planet" (natural capital) refers to sustainable environmental practices.
Natural capital is the extension of the economic notion of capital (manufactured means of production) to environmental goods and services. Natural capital is thus the stock of natural ecosystems that yields a flow of valuable ecosystem goods or services into the future. For example, a stock of trees or fish provides a flow of new trees or fish, a flow which can be sustainable indefinitely. Natural capital may also provide services like recycling wastes or water catchment and erosion control. Since the flow of services from ecosystems requires that they function as whole systems, the structure and diversity of the system are important components of natural capital.

"Profit" is the economic value created by the organisation after deducting the cost of all inputs, including the cost of the capital tied up. It therefore differs from traditional accounting definitions of profit. In the original concept, within a sustainability framework, the "profit" aspect needs to be seen as the real economic benefit enjoyed by the host society. It is the real economic impact the organization has on its economic environment. This is often confused to be limited to the internal profit made by a company or organization (which nevertheless remains an essential starting point for the computation). Therefore, an original TBL approach cannot be interpreted as simply traditional corporate accounting profit plus social and environmental impacts unless the "profits" of other entities are included as a social benefits.

Could your CSR systems for your business and it's formulations be strengthened by an independent confidential review?

For more information or to discuss your requirements please:

  • Infant Formula label claims global range reviews and risk assessment
  • New novel product label claims risk assessment
  • Independent confidential liaison with country food legislators
  • Raw materials/ingredients/recipe review and consolidation
  • Supply chain - confidential strategic alliance development
  • Competitor range evaluation
  • Recipe formualtion legal limits confirmation

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Contact John Watson

John Watson
Office: +44 1224 861 507
Mobile: +44 7931 776 499
jw@dairyconsultant.co.uk

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We are a longstanding member of the Society of Dairy Technology and have Fellowship of the Institute of Food Science and Technology.

 

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