Corporate managers…and especially, corporate lawyers….often ask why would a company manage beyond compliance with legal requirements? The best way to understand why is to look at real-life situations and corporate decisions.
In an October 2nd address to the International Institue for Conflict Prevention and Resolution’s Corporate Leadership Award Dinner in New York, John Ruggie offered up some examples that clarify why beyond compliance strategies make good business sense. These examples demonstrate how managing beyond compliance can help to bridge disputes between corporations and communities:
Remarks by SRSG John Ruggie – Alternative dispute resolution (ADR)…”is a promising approach for dealing expeditiously and effectively with conflict, not only in the workplace and B2B sphere. I’ll turn in a moment to how it might play out in my world of business and human rights by helping to resolve disputes there, especially between companies and communities…Here is [an] example. A large commodity mining company in Africa, a subsidiary of a transnational firm, reports to its parent that all is well because it has won six of the seven lawsuits brought against it by local communities…But executives at the parent company are deeply puzzled, because with each lawsuit won the local dispute seems to escalate, not decline, while the parent company’s international reputation is taking ever bigger hits…The lesson to be drawn from these cases is this: a serious misalignment exists in each instance between legal requirements and prevailing social expectations…
Sometimes, it isn’t easy for a company lawyer to accept beyond compliance with the laws as a business strategy. But, I’m a lawyer and a former corporate lawyer and executive. Based on in-the-corporate-trenches experience, I have to appeal to corporate decision-makers and strategists: Don’t just ask, what does the law say about our accountabilities…ask as well, what do stakeholders legitimately expect? Corporations aren’t going to kow-tow to stakeholder expectations all the time, but it may make good business sense to anticipate their expectations and reactions. Changes in laws often happen AFTER shifts in prevailing social expectations and norms. It’s worth your while to stay ahead of those curves…if you want your company to be “top quartile”, “leading”, “cutting edge” or sometimes, just competitive.