Ethical Performance
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government told to take the lead

February 2000

A major inquiry led by eight of the prime corporate movers on social responsibility has told the UK government it must significantly step up its efforts to promote ethical business practice.

The long-awaited report of the committee of inquiry, which was set up in 1997 with the support of prime minister Tony Blair, says the government should begin to push business into ethical policies by ‘brokering voluntary agreements, leading by example, advocacy, education and exhortation, leveraging supplier relationships and regulation’.

While it says progress has been good so far, it warns that ‘the engagement of government is crucial if ... corporate commitments to achieving the highest ethical, social and environmental standards are to be properly recognised and encouraged’.

In its report, A new vision for business, the inquiry, which was led by high level representatives from eight companies – The Body Shop, Tesco, Diageo, Unipart, BP Amoco, BT, Wessex Water and NatWest – sets out a ten point ‘Millennium Challenge’ for the government.

It calls on the Department of Education and Employment and the Department of Trade and Industry to develop a management code on ethical, social and environmental responsibility which should be promoted through ‘business intermediaries’, and says the government should ‘actively consider’ setting up a directory of good practice on corporate governance and business ethics.

The Cabinet Office should report annually on its environmental performance and promote socially responsible behaviour through departmental procurement and purchasing policies, the report adds.

The civil service should become a leader in family-friendly employment practices, and the DTI should begin a high-profile campaign on the ‘competitive advantages and potential efficiency gains’ of ethical supply chain management.

For its part, says the report, the business community needs to embrace the socially responsible agenda ‘in a proactive way’ – which means many more small and medium-sized enterprises (SMEs) getting involved.

‘There is too much reliance on an existing leadership cohort’, it warns. ‘The upbeat conclusions of this inquiry ... are unlikely to be borne out in practice without more engaged ownership of this agenda by a higher proportion of SMEs.’ The government ‘has an important role to play in that process’.

The prime minister said that while he did not agree with everything in the document, he welcomed its general thrust. He added that it ‘rightly identifies a task for government in helping set the best framework in which business can succeed’.

Mark Goyder, director of the Centre for Tomorrow’s Company, said that he believed the report would usher in ‘a new era of accountability by business’.

The inquiry, which was chaired by Tom Cannon, chief executive of the Management Charter Initiative, a quango that sets standards for management training, sought views from more than 150 organizations and individual experts.




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