UN Global Compact – Organizing the Corporate Human Rights Function

UNGC LogoU.N. Global Compact on Emerging Corporate Good Practices for Organizing the Human Rights Function

The recently released Good Practice Note from the United Nations Global Compact Human Rights and Labour Working Group on organizing the human rights function internally advises companies that there is no single ‘right’ answer to how to organize the human rights function. To illustrate this point the publication leads readers through various models that have been utilized by corporations seeking to comport with the principles laid out in the UN Guiding Principles on Business and Human Rights (“Guiding Principles”).

The Good Practice Note (which was prepared for the Working Group by Shift) makes clear that effective corporate approaches take into account an individual company’s particular operational and organizational context. How corporations organize to accomplish the human rights function internally is a matter of self-assessment and corporate determination.

The report assists companies with this process. The Working Group assessed the practices and experiences of several companies (primarily large, multinational corporations) to identify the specific models utilized by these corporations to organize their human rights function. The models provide useful benchmarks for similar companies to consider when conducting their own decision making process on how to organize and manage their own human rights function.

Presented through four easily accessible sections, the report framework facilitates utilization by senior corporate managers in both functional and operational roles. Individual corporate experiences are framed through four identified models utilized to implement the human rights functions within the corporation. While the report itself goes into significant detail on the potential advantages and disadvantage for each model, general discussion and observation for each of the four highlighted models follows:

          1.   Cross-functional working groups. Cross-functional working groups are organized to bring together different departments from across the company to create a shared responsibility for leading and implementing the human rights function within the organization. Corporations often undertake this approach when adopting a change management strategy to facilitate internal vertical and horizontal program implementation within the organization. However, to ensure sustained implementation beyond roll out, specific roles and responsibilities – to include individual accountability and standards – must be clearly defined at every level of the organization to ensure ownership at each corporate activity throughout the enterprise.

           2.  Hosting a ‘guide dog’ function within existing business departments. Here companies elect to nest the human rights function within an existing corporate functional area. This approach provides a designated clear point of contact and “home” for human rights within the corporation, but care must also be taken to ensure that human rights function accountably and oversight is not inadvertently undermined, or given mere lip service to established corporate compliance standards, by placing the function outside of established business unit reporting chains. Conversely, the “guide dog” approach may grow the capacity of human rights within an organization by encouraging operational business units to view the human rights function as a supporting resource by which to gain technical advice and assistance without fear of repercussion.

           3.  Legal and/or compliance-driven ‘guard dog’ models. This approach is taken when companies place the human rights function within their legal or compliance division. Compliance and accountability is emphasized and may be appropriate given the context of the corporation’s organizational structure and operational model but can occur potentially at the cost of open dialogue with business units on human rights functional management or potential impacts. Here, too, ownership of the human rights function may be perceived as a corporate and not a business line responsibility.

           4.  Separate responsibilities allocated across different departments. Delineating clear and separate responsibilities across different departments (i.e. corporate sustainability, risk management, and human resources) for the human rights function allows corporations to benefit from the combined specific expertise, perspective, and capabilities that different functional areas bring to bear. This can insure a more comprehensive approach to managing the human rights function as well as implicitly communicating the message that it is a core company function – central to everything the company does. However, companies must also carefully consider the central coordinating requirements, priority alignment, and decision making protocols incumbent when responsibilities are shared among separate organizational elements.

Managers will take particular interest in the provided advantages and disadvantages for each of the four corporate models identified in Section II, as well as the nine emerging good practices developed from analyzing the ways in which companies “have tailored the design of these basic models to achieve a more well rounded approach that combines features of more than one model” in Section III.

Building from the analysis of the models (Section II) and the emerging good practices developed from this analysis (Section III), Section IV concludes the report with the concept that no ‘one size fits all’ approach exists for companies to consider in determining how to best structure the “right” company-specific human rights function. The report concludes that each company is different with specific operating contexts, corporate culture, existing policies and processes, the nature of its business activities and corresponding human rights risks, and how far along the company is in meeting its human rights responsibilities.

The corporate focus in determining the appropriate company-specific approach should therefore be on helping managers to first ask the right questions. Asking questions that self-examine and consider the “who, what, why and how” of a company’s operations may help to provide the best direction to companies as “they design – and re-design – the function”. To assist in this process the section provides key questions for companies to consider as they initially structure or assess an existing corporate human rights function.

Large, multinational companies that are undertaking their responsibility to respect human rights by developing and implementing a human rights function will want to take advantage of the U.N. Global Compact Human Rights and Labour Working Group’s work and read the Good Practice Note reviewed here. The findings of the Working Group offer not only insights from the experiences gleaned from other multinational companies conducting related activity, but also a careful consideration of the emerging good practices and key questions to ask that were developed from the models and approaches identified from these experiences.