With increasingly significant social responsibility pressures and UK laws like the Bribery or Modern Slavery Acts, any public exposure by regulators or media of alleged misbehaviours by well-known businesses, or by people they use as suppliers or agents, highlights the endless scrutiny of what companies do or neglect to do.
There is an industry out there watching what corporates get up to, and alleged corruption or abuses of human rights will soon attract attention, and of course that is a good thing.
While in general Human Resources professionals rarely get asked to contribute to mitigating business risks unrelated to managing employees, and will presumably know little or nothing about alleged corruption or human rights abuses in their employer or its supply chain until the story breaks, the aftermath of allegations will burden the company with a big task of regaining employee trust and confidence.
Employees may feel stigmatised by association with their accused employer, and the bigger the name the bigger the possible stigma of course. It is a bad day in Human Resources when employees and possible recruits are questioning the company's ethics and employees begin to feel ashamed to say who they work for. There may be legal consequences in some cases but generally the issue is about difficulty recruiting or keeping the most talented people, and trying to build employee engagement when employees might think their leaders are mainly looking after themselves.
As ever with reputation, a good name takes years to build and minutes to lose. The HR challenge may then be struggling to pick up the pieces and sort out what to tell employees and other stakeholders.
The recipe for a peaceful life in HR and happy employees is of course to do nothing wrong in the first place, or have a very good story to swiftly tell if accused of wrongdoing, hence it makes much sense for companies to engage more with HR on areas of risk they may be able to identify and help with. That undoubtedly includes knowledge of the human resources management of the supply chain and any forced or child labour risks which may be lurking.
Without a doubt even corruption risk is best managed by, at the very least, well run training programmes including third party suppliers, with reinforcement through disciplinary procedures and contract terms of zero tolerance towards corrupt practices or human rights abuses.
As post-Brexit the UK strives to enlarge its world market for trade and investment, the issues highlighted here will get worse. There is an urgent need to equip UK companies to understand any serious risks of certain markets or ways of doing business, and this has to be an essential training requirement which both limits risks and may also give a measure of legal defence in some cases.
There is a Brexit related imperative of quickly upskilling HR and executives about not just compliance risks but also the cultures and expectations of target markets with which many UK companies are as yet unfamiliar but now will need to know much better.
Michael Sippitt
Director