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tests begin on charter for small companies

April 2001

Auditors have begun testing an ethical business charter that will encourage social responsibility among small and medium-sized enterprises (SMEs).

The project, set up by the internet-based company GoodCorporation.com, aims to have more than 10,000 companies accredited by 2005, helping SMEs to enter a field that has so far been dominated by large companies (EP7, 2000).

If pilot audits show the project is viable, the company, chaired by Vicky Pryce, chief economic adviser for KPMG, will be looking for up to $2.1million (£1.5m) of second-round finance. Pryce said many SMEs wanted to demonstrate their ethical credentials but were not in a position to undertake complex social audits.

The GoodCorporation charter, drawn up by the Institute of Business Ethics, covers five stakeholder groups: employees, customers, suppliers, shareholders and local communities. Companies must sign up to several commitments relating to each group, and the charter specifies the evidence necessary to demonstrate each commitment.

Members of the network will, for example, have to have ‘a fair remuneration policy everywhere they operate’. They will have to respect local wage laws and say how they set pay levels.

Auditors ranging from big accountancy firms to individual consultants will check compliance with the charter requirements. The cost of subscribing to the network will be £2000 – £10,000, depending on the size of a company.

Organizations involved in the testing include Ladbrokes, ARM Holdings and the environmental campaign group Greenpeace.




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