Launched at its Davos meetings, the World Economic Forum (‘WEF’) report sets out five key questions for boards to consider regarding their conduct towards stakeholders.
The Global Future Council on Human Rights, a body of the WEF, presented the guidance which offers board members five key questions to consider when weighing their company’s approach and conduct towards stakeholders. The report says board “oversight of the relevant mechanisms for managing these issues is essential”.
A board should ask these five questions to determine how well it responds to the interests of those most affected by company operations:
1. Does the company know who its affected stakeholders are?
2. Does the company have the appropriate mechanisms in place to understand the potential adverse human rights impacts on affected stakeholders and how to respond appropriately?
3. Is the board sufficiently engaged in overseeing these mechanisms and ensuring their effectiveness?
4. Does the board have the right skills, experience and knowledge to undertake these tasks?
5. Does the board have the right monitoring and review mechanisms in place to undertake these tasks?
The advice in the guidance will help counter examples of big company boards that were unaware of the true social impact of their business, including human rights abuses and even fatalities. Human rights challenges can come from without a company’s operations, it’s supply chain and other business relations, or indeed from outside the business—as the world is now witnessing in Ukraine.
Whatever the reason, it is critical that companies have the right mechanisms in place to ensure that affected stakeholders are at the centre of every analysis and decision and that the voices of the most vulnerable are heard all the way up into the boardroom itself.
You can read the guidance by following the link.