How useful are voluntary codes of practice in achieving corporately responsible behaviour - Essay Example

How useful are voluntary s of practice in achieving corporately responsible behaviour? How useful are voluntary s of practice in achieving corporately responsible behaviour? Introduction It has become a necessity for corporations to regulate themselves regardless of the rules and guidelines in place to regulate them. Ability of industries to regulate themselves is composed of programmes that are not actually needed by law, but are meant to supplement the law and provide the necessary conducive environment for corporations to operate in. These programmes consist of initiatives such as policies, environment codes of conduct and consensus with government. These self regulations by corporations can be termed as voluntary corporate initiatives (Australia. Department of Agriculture, Fisheries and Forestry, ed., 2001). Nevertheless, voluntary codes of practice are most important as they avail an all round environment inside and outside the corporation. This paper looks at the benefits of voluntary codes of practice in achieving corporately responsible behaviour. Responsibility and accountability are two vital terms that are used day in day out in governments and corporations. Government plays very decisive and important roles in monitoring corporations. It does this by structuring regulatory guidelines required to protect the society and environment upon which all corporations under its jurisdiction have an influence over (Berleur, 1996). This enables it to solve the intricate challenges that are as a result of development. While the government can formulate, pass, amend and impose rules and regulations governing actions of corporations, it is not omnipresent. Hence, government cannot be everywhere every time to make sure that rules and regulations are followed in equal measure by all corporations. The modern world is characterised by corporations, both big and small that go beyond the borders of their parent countries to offer services and goods in other countries (United Nations Environment Programme. Industry and Environment, 1998). The benefits of voluntary codes of practice in achieving corporately responsible behaviour are as a result of the contributions that they make towards streamlining corporations, improving efficiency and productivity (Global Forum on International Investment, ed., 2002). Voluntary codes of practice are beneficial in many aspects like increasing the financial savings of a corporation due to efficacy in resource and energy usage, decrease in waste treatment cost, decreased regulatory cost and enhanced access to finance and insurance. They also enhance the public view of the corporation which results to advantages in the market, motivation for employees and an easier relationship with the government (Gibson, 1999). Voluntary codes of practice also result in an edge over competing corporations due to the enhanced public image and greater financial power. The benefits and usefulness of voluntary codes of practice are capitalized on most when they are implemented without public consent but on the corporation’s own initiative and also without government enforcement (Visser, Matten, Pohl & Tolhurst, 2010). They are inbuilt initiatives that are deeply rooted in the values and traditions of the corporation that enable them to serve the purpose and mission of the corporation along with ensuring that there is uniformity in the behaviour of the corporation’s constituent (Mamic, 2004). Voluntary codes of practice are useful in achieving corporately responsible behaviour by motivating organizations and companies to manage themselves through self regulatory means and ways that are of benefit to the environment and the community (Jenkins, 2001). For example, if a corporation operates in an area where it exposes the community living nearby or around it to hazardous waste that causes ill health to that community, it is up to the corporation to take the responsibility of developing strategies that will either protect the community from the waste or provide compensation for the affected members of the community. Most importantly, the company or organization should voluntarily develop waste treating means that will reduce the harmful effects of the waste. They ensure that the corporation shall not have to wait for the government to force them to comply with environmental rules and regulations that govern the specific area the organization is based at (Jenkins, 2001). When corporations group together to form an association, they are bound by the terms that are used to set up that association. Many associations have been set up by individuals and corporations alike. Associations avail a platform whereby voluntary codes of practice are formed and followed. How do they do this? An example is the Canadian Direct Marketing Association. The association has a voluntary code of practice whereby its members have to meet the conditions of various voluntary codes of practice to be and remain members of the association. This way the members are able to achieve corporately responsible behaviour by following the voluntary codes of practice set by the association (Anheier & Toepler, 2009). In fact, only members of the association that are compliant with the codes of practice can show the association’s logo on advertisements and on goods and products they produce. One voluntary code of practice that members have to follow is that of ensuring privacy of their clients. This is an ethical code. The other voluntary code of practice that members have to follow is minimizing of the sharing of information about their clients. These codes of practice are not enforced by the association, nor are they mandatory; it is up to the members to comply. They result in an acceptable corporate behaviour (0ffice of Consumer Affairs, 2010). All over the world, corporations must meet certain set standards and ensure that whatever activities they participate in, they are ethical. Ethics are an important part and parcel of the day to day activities of corporations. Voluntary codes of practice are useful in ensuring that corporations are ethical. Ethics are important rules and guidelines that govern the behaviour of a corporation. It’s common place for corporations that undertake similar activities to join up and form an international organization that represents them as one united body. An example of an international organization is Consumers International which is a non – profit foundation that joins the activities of around 200 consumer groups around the world. Consumers International has formulated a consumer agreement for world business. This agreement is not mandatory nor is it enforced by any authority or individual (0ffice of Consumer Affairs, 2010). The agreement ensures that members of Consumers International comply with certain levels set up regarding marketing customs, competition, ethical conducts like bribery, handling of client complaints and guarantees (OECD, 2000). Organizations that voluntarily want to follow the agreement are subject to checks at the beginning by Consumers International to ensure they are compliant in their behaviour as outlined in the agreement. Corporations are becoming more sensitive and aware of their responsibilities as corporations and the need to improve it along with their track record on how they deal with human rights. It is through their behaviour that they are deemed to have or to have not infringed on the right of any individual. Many corporations have made protecting human rights part of their corporate strategy. This corporate strategy has not been fulfilled by seeking the guidelines of a regulatory body. It has been fulfilled through the adoption of voluntary codes of practice by corporations (Tueller, 2005). Voluntary codes of practice associated with human rights are motivated by corporations that aim to deliver value in their day to day behaviour and activities. Such voluntary codes of practice that are geared towards protecting the rights of each and every individual govern corporations ensuring that they have a high observation of human rights (the Stationery Office U. K., 2009). Basically, it is advantageous to them as issues connected to human rights are sensitive to the public as well as to the corporation itself. It is this benefits that are due to their compliance with the voluntary codes of practice outlined which drive the corporations towards practice of acceptable corporate behaviour. Benefits of compliance include an improved corporate reputation, management of finances which would have been used in case of law suits against the corporation due to violation of human rights and enhanced public confidence in the corporation. Hence, voluntary codes of practice are useful in ensuring corporately responsible behaviour through their connections with human rights which are fundamental principles that are pillars in today’s democratic world (Keller, n.d.). Various corporations are involved with the production of chemicals which if not properly managed will lead to poisoning or result into harmful effects. Such corporations have a corporate responsibility which apart from the laws set to govern their operations guide the in their day to day activities (Rasche, 2010).They are not able to meet their corporate responsibilities without following certain voluntary codes of practice. An example is the Canadian Chemical Producer’s Association that has a responsible care program (0ffice of Consumer Affairs, 2010). This program consists of rules and guidelines that govern how these corporations manage chemicals that they produce. The guidelines in the program stipulate that association members ensure that chemicals they produce are safe and environmentally safe. For companies to be members of the association, they must comply with voluntary codes of practice outlined in the program. Through voluntary codes of practice, their behaviour as chemical producing companies is under control and they are responsible and accountable for the management of the chemicals they produce (0ffice of Consumer Affairs, 2010). Voluntary codes of practice are beneficial and useful in various ways especially in ensuring corporately responsible behaviours. The best thing with them is they do not need enforcement at all. It takes an initiative of a group of willing corporations to set up and comply with voluntary codes of practice. They compliment the laws set up to govern corporations while improving the public image of these corporations along with availing benefits such as encouragement of responsible corporate behaviour, address concerns of the consumers such as privacy, quality, health, human rights and the environment. They also provide interactions between corporations that are less expensive and better informed. Bibliography Anheier, H. K., & Toepler, S., 2009. International Encyclopedia of Civil Society. Springer. Australia. Department of Agriculture, Fisheries and Forestry, ed., 2001. Report of the FAO/Government of Australia Expert Consultation on Good Management Practices and Good Legal and Institutional Arrangements for Sustainable Shrimp Culture, Brisbane, Australia, 4-7 December 2000, Issue 659. Food & Agriculture Org. Berleur, J. J., 1996. 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