Throughout the last decade, the UN Global Compact expelled 2,048 companies, roughly 25% of its membership, for serial failure to submit Communication of Progress (COP) reports. The COP is an annual GC membership requirement of companies that asks them to describe progress on ten principles clustered around four areas of corporate responsibility: human rights, labour, the environment and anti-corruption.
The companies expelled from the 'company of the good' failed to submit reports for two consecutive years. No country was spared the embarrassment. My own country felt the blow when 47 companies experienced the rough leather underside of the UN boot. Most would say, "Well, it's about time!" "A company that cannot honour its commitments tarnishes the credibility of those who do and the integrity of the Compact as a whole."
But who else is affected by a company unable to hold to its commitments? Let's pull out the list.
The company's employees are among the first to feel the shame. These are the people who have been encouraged to believe in the company, to be loyal to the company and to give the company their best. I can't think of a quicker way to create unease among your people than to not deliver on your commitments.
And what about the community where the company does its business; what about its patrons? Perhaps the company hopes they won't take notice. But like burrs on a dog's coat, the story has a way of getting around. Does it not? How will community buy-in be captured when trust has waned?
Next on the list is the supply chain and its range of actors confused by your compliance standards. Do you have any? Should they relax their own?
The final stakeholder is the environment, often the last to be considered because its voice cannot be heard and impact on the environment is often not immediate. Perhaps it helps to think of children when considering the environment as stakeholder of our actions/inactions. Like children, the environment has no voice, except through representation. The abundance of research that exists to correlate abuse and neglect of children with negative outcomes later in life should present a powerful metaphor when examining our environmental footprint.
To all you deniers out there - you are part of a social web of influence. Everything you do, as well as everything you don't do sends a complex message that affects us all with intended or unintended consequences.
To anyone who has ever been caught in a bad romance, this one is for you!
How else does a company's failure to meet its commitments affect its inner and outer circles?
photo credit: Bill Ward Lego Hearts February 2009 via flickr