Responsible Business Guide: A Toolkit for Winning Companies

RBG
Responsible Business Guide: A Toolkit for Winning Companies
Apart from regulations, companies themselves exercise internal controls against
mismanagement, typically in the form of rules and regulations, standard operating procedures,
and limits to authority manuals. Company hierarchies are another accountability mechanism.
Externally, there are more and more independent watchdog bodies, including government
agencies like the Competition Commission of Pakistan, trade unions, and non-governmental
organizations like Transparency International or Consumer International, often with national
affiliates, keeping track of company decisions and their impacts.
In today’s consumer-driven environment, the market itself is assuming the role of a corporate
accountability mechanism. Aware consumers are making buying decisions as large, wellconnected
groups. For example, the threat of a boycott of Danish goods in Muslim countries
caused immediate diplomatic action by the Danish government to mitigate the threat.
Fifteen years ago, the threat of a ban on Pakistani footballs in a World Cup year brought
the global football industry to rally behind local producers, helping them tackle issues
surrounding child labor.
Equally as important as accountability is transparency, which implies that a company’s
owners or managers will not only assume responsibility for their decisions but will
communicate their reasons openly within and outside the company to stakeholders. For
companies, transparency implies direct, open communication between company decisionmakers
and key stakeholders such as employees, shareholders, and consumers. The annual
general meeting of shareholders is a regulatory instrument to implement transparency and
accountability. Other common ways are through websites, company newsletters and media
messages, and increasingly advertising. Taken together, these two concepts manifest the
measure of a company’s governance.
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