ISO standard provides valuable guidance for directors operating internationally

I read June/July 2018 Boardroom ‘Blind spots in the supply chain’ where Amy Williams described Rob Fyfe, then Icebreaker CEO’s handling of human trafficking in their supply chain. Fyfe offers questions directors should be asking to ensure that they provide sufficient air time given the significant risk to brand and reputation that trafficking represents.

While New Zealand enjoys a high ranking internationally on such matters we tend to take it for granted and trade on our good reputation. As a result, insufficient consideration is made in the board room when our supply chains involve other countries.

Directors are well served by the principles of best practice and code of practice in the Institute of Director’s Four Pillars of Effective Governance. When considering practice outside of New Zealand, directors should refer to ISO 26000, the guidance standard for social responsibility. Developed by representatives from 110 countries it provides the internationally agreed minimum accepted standards across 7 core principles;

1. Accountability
2. Transparency
3. Ethical behaviour
4. Respect for stakeholder interests
5. Respect for the rule of law
6. Respect for international norms of behaviour
7. Respect for human rights

When operating in countries where human rights are not protected, conflict arises with company values, policies and its brand promises. The standard advises that advantage should not be taken where laws do not provide protection for local workers, and international norms of behaviour should be respected. These norms include reviewing the nature of the organisation’s relationship and activities within the country, seeking opportunities to influence relevant organisations and authorities to remedy the conflict, and avoiding being complicit in the activities that are not consistent with these norms.

With the improved connectedness of today’s world, and increasing use of complex global supply chains, directors must be more mindful of internationally accepted standards in addition to New Zealand best practice principles.