Employees in the context of CSR

1. Employees as stakeholders Shareholders own, but employees CONSTITUTE the company Nowadays most important resource/ production factor for a company o Example: Apple, Google, KMPG etc. (intellectual work) Representation of the company and creation of the (majority of) value added Dependency of employees on companies due to salaries 2. I) Workers rights (1) Right to freedom from discrimination In business context: When employees receive preferential (or less preferential) treatment on grounds that are not directly related to their qualifications and performance in the job (Crane& Matten, 2010) Inequalities between individuals exist reasons for choosing one over another should be based on qualifications that in principle could be fulfilled by anyone Sexual and racial harassment line between harassment and office romance or joking = pretty much blurred it's the context that matters (character, personality + national culture) Measures against discrimination Equal opportunity programs: Introduction of procedures ensuring that employees and prospect employees are treated equally and fairly. Affirmative action (AA) programs: Target those who might be currently underrepresented in the workforce (Active recruitment, Fair job criteria, Training programs for discriminated minorities) Promotion to senior positions (2) Right to privacy Individual's right to control information about oneself, and to control situations, where such information could be gleaned (3) Right to due process Most common processes where the right to due processes is particularly important: promotion, disciplinary proceedings, firing (4) Right to participation and association Financial participation: allows employees a share in the ownership or income of the corporation Operational participation: delegation, information, consultation, co-determination

(5) Working conditions Principle of informed consent: communication of the risks involved at work Precautionary principle (6) Right to fair wages Basis for determining fair wages: expectations placed on the employee + their performance towards goals measured by working hours, prior training, risks involved, responsibility for assets , meeting of targets etc. (7) Right to freedom of conscience and speech Ex: Whistleblowing (8) The right to work Is the right to work automatically a right of employment? Does the right to work imply equal working conditions?

II) Duties Duty to comply with labor contract Duty to comply with the law Duty to respect the employers property

3. Employing people worldwide: The ethical challenges of globalization (1) National culture and moral values Employee rights are seen differently in different countries importance of understanding culture while dealing with people from overseas o Fair to treat people differently? Problem of absolutism vs. relativism o Absolutism: ethical principle valid everywhere o Relativism: ethical principle adapted to culture, history, social background General rule: Human rights by UN Ethical right or wrong depends on economic situation (2) The Race to the bottom MNCs choose countries that offer preferable working conditions o lower environmental and social standards lower costs

Competition between 3rd world countries can lead to downward spiral of protection o Hard measurement of evidence But: broader potential responsibility for MCNs: set up of background institutions o trade union, health and safety standards

(3) Migrant labor Acceptation of lower salaries and poorer working conditions Protections needed Employment of migrant labors : illegal but employment only basis to become legal residents grey zone of ethical issues

4. Enablement of employees to learn about CSR (1) Employing specialists (2) Partnerships with other companies or NGOs, governmental agencies a. International labor organization (ILO) (3) Codes of conduct = Declarations of intent to guide corporate action i. European convention on human rights ii. OECD guidelines for multinational enterprises iii. Un global compact (4) Impact measures a. Financial metrics + trend towards calculating social and environmental impact in order to measure the impact of the organization on the various stakeholder groups (5) company structures and policy a. Decision by whom, when, where sustainability will be managed (6) Purchasing and supply chain initiatives a. Dialogue with suppliers on importance of sustainability in supply chain (7) Communications and dialogue a. Annual reports, booklets b. Sustainability reports measure action, enable stakeholders to assess company performance - transparency c. Stock market indices: Dow jones sustainability Index (8) Employee training and workshops (9) Company visits: Learn and interact with other employees/companies (10)Employee volunteering opportunities a. Contribution of knowledge and skills to social and environmental projects corporate citizenship 5. Does it pay off? Engagement in CSR in terms of employees affects: Turnover Absenteeism Income/return for shareholders Productivity/performance

References: Crane, Andrew & Matten, Dirk. Business Ethics, Oxford, University Press, 2010: Chapter7: Employees and Business Ethics, pp.288-337 Haugh, H.M. & Talwar, A. How Do Corporations Embed Sustainability Across the Organization? Academy of Management Learning & Education, Vol. 9, No. 3, 2010, 384-396 Tower Watson ISR, Hay Group, Gallup, Corporate Leadership Council, in: Ethical Corporation Journal (2010) 'Briefing: employees', October edition, p. 11-20