We need to talk about … corporate governance

There is much discussion going on about company behaviour. ECCR has made submissions to the government and to Parliament as part of consultations about corporate governance. The current debate is for every company and all in our society and ECCR wants to stimulate discussion and encourage greater understanding about these issues within the faith sector.

To help ECCR members promote dialogue at church and congregational level and to bring greater understanding of corporate governance issues within their neighbourhood, we have developed some materials:

  • Tri-fold promotional leaflet – can be found in Word here or in pdf here
  • Detailed notes – can be found here;
  • ECCR submission to government – can be found here.

What can you do?

Would a local business or Rotary group foster a discussion group in your area?

What about the Chamber of Commerce or the Round Table or Churches Together?

These could take two formats:

  • Private for the benefit of the participants
  • Public with an idea of educating a wider audience about the issues

and might include:

  • Directors of local companies
  • Local trade union leaders
  • Providers of infrastructure (local/county councillors & council departmental managers)

There could be more than one such gathering, perhaps with different participants for some of them. We’ve suggested below some issues that can be discussed. (Detailed notes to support those discussions can be found via the link to notes above)

Some questions to consider

  • What is a company for?
  • What is the nature of its supply chains?
  • What’s the company’s impact on the environment?
  • How are companies ‘governed’?
  • What about its people?
  • How does it approach human rights?
  • What can shareholders do?
  • What is good ‘stewardship’?

Do let us know how you get on – we would love to hear from you. Contact: corporate.responsibility@eccr.org.uk

Take part in Good Money Week

ECCR was a founder member of National Ethical Investment Week, which in 2014 was rebranded as Good Money Week, co-ordinated by the UK Sustainable Investment and Finance Association (UKSIF). Good Money Week brings together individuals, financial advisers, charities, faith, community and student groups and financial institutions to raise awareness of the importance of sustainable and ethical investment and finance.

There’s more on the UKSIF website – http://goodmoneyweek.com/ It says: ‘Ethical investment’, ‘socially responsible investment’, ‘sustainable finance’, ‘ethical banking’….. we are talking about all these things when we say ‘Good Money’. Whatever you want to call it, we simply mean thinking about the social and/or environmental impact of your money whether it’s in a bank account, investment, ISA, and/or pension fund.

They also offer suggestions on how you can take action:

Speak to a financial adviser about sustainable and ethical investment options

Become a sustainable investor – you can invest as little as £5 in a renewable energy project or think about opening a  sustainable and ethical ISA

Use your #PensionPower and ask your pension fund whether they allow members to meet them to talk about the issues that matter

Tweet your bank and ask them for information about how your money is being used in positive ways – socially, culturally and/or environmentally. Use the hashtag: #mymoneymatters

Email your MP and ask them to support Good Money Week

Churches can take part in Good Money Week by using resources from the “Your Faith, Your Finance” website for Home Groups – >http://www.yourfaithyourfinance.org/group-discussion//p>

You can also focus on the theme during Sunday worship. Worship materials used at ECCR’s 25 Anniversary Service are available at: http://eccr.org.uk/wp/wp-content/uploads/2016/03/ECCR-25th-Celebration-Programme-and-Order-of-Service.pdf

Take Action on Trafficking and Forced Labour

In partnership with Finance Against Trafficking (FAT) and ECCR corporate members – Us (formerly USPG) and Rathbone Greenbank – ECCR recently released the report ‘Forced Labour, Human Trafficking & The FTSE 100’.

As the Modern Slavery Act 2015 comes into force, companies face unprecedented scrutiny in ensuring their supply chains are free from forced labour and human trafficking. New guidance, within the report gives faith investors the knowledge to challenge companies and ensure they are working to the highest standards in this area and in so doing, help protect some of the world’s most vulnerable people.

The questions below are questions that faith investors can ask in order to hold companies to account in this area.

Suggested Questions for Companies
The following questions can be directed at companies by shareholders, pension fund investors or investment managers:

  • What steps are you taking to ensure compliance with the Modern Slavery Act?
  • What actions have you taken to evaluate and address the risks of forced labour, slavery, human trafficking, and child labour within your product supply chains?
  • What policies have you put in place to identify and elimi-nate risks of forced labour, slavery, human trafficking, and child labour within your supply chains, and what actions have you taken in relation to, or in the absence of, such policies?
  • How will you ensure that audits of suppliers within your supply chains are conducted to investigate working condi-tions and labour practices and to verify whether suppliers have systems in place to identify risks of forced labour, slavery, human trafficking and child labour within their own supply chains?
  • How will you manage your suppliers to ensure that the manufacture of products and the recruitment of labour is carried out in compliance with applicable legislation re-garding forced labour, slavery, human trafficking, and child labour?
  • What steps have you taken to establish and maintain internal accountability standards and procedures for employees or contractors that fail to meet company standards regarding forced labour, slavery, human trafficking, and child labour?
  • What training have you provided to your employees and personnel with direct responsibility for supply chain management regarding forced labour, slavery, human traffick-ing, and child labour?
  • How will you ensure that labour recruitment practices comply with corporate policies and/or efforts to eliminate practices that contribute to forced labour, slavery, human trafficking, and child labour?
  • How will you ensure that remediation is provided to those who have been identified as victims of forced labour, slavery, human trafficking, and the worst forms of child labour within your supply chains?

Suggested Questions for Fund Managers and Pension Fund Trustees
If your investments are held by investment managers or pension funds, you can ask the following questions to ascer-tain the extent to which they are raising concerns about forced labour, slavery, human trafficking, and the worst forms of child labour with the companies in which they in-vest your money. This will encourage them to do more in this respect.

  • What are you doing to ensure that the company in which you are investing on my behalf is taking adequate measures to ensure that forced labour, slavery, human trafficking and child labour are not present within its supply chain?
  • With how many companies have you raised concerns or asked questions about the risk of forced labour, slavery, human trafficking, and child labour either within their own operations and/or those of their suppliers?
  • In what ways have you engaged with companies on the issue of modern slavery?
  • How will you be monitoring companies’ compliance with the Modern Slavery Act?
  • In what ways have you engaged with national and interna-tional policy makers on business and human rights agendas?
  • What industries and asset classes do you consider to be higher risk for the incidence of modern slavery?

Take Action on High Pay

Executive remuneration has been growing much faster than average wages or share value – and company boards have largely failed to curtail this. So it’s the responsibility of shareholders to apply the pressure on boards to get a grip on high pay.

Can you get involved? Yes! L­arge shareholders have a key role here. But the majority of individuals will also be shareholders in FTSE 100 companies through their pension funds or ISAs – and everyone can ask their fund manager to take action with companies to curb excessive executive pay.

What you can do:

Engaging for pay equality: Questions for companies
The following questions could be directed at companies by shareholders, pension fund investors or investment managers.
  • What is the ratio between the total remuneration of your highest and lowest and highest and median paid employee?
  • Do you pay all employees and contract staff working on your premises at least a Living Wage? Has the company considered becoming a certified Living Wage Employer?
  • How many workers and what proportion of your workforce is employed on temporary contracts or contracts without any guaranteed hours?
  • What is the company doing to ensure that living wages are paid throughout its supply chains?
  • How are employee perspectives taken into account when developing company strategy and setting pay?
  • What is the company doing to ensure that its leadership succession plans prioritise the development of internal talent?
  • Does the company accept that there can be business risks associated with growing levels of inequality in the UK? Do you consider that you have any ethical responsibility to help reduce levels of economic inequality?

Questions for fund managers and pension fund trustees

If you have investments held through investment managers or pension funds, you could ask them the following questions to ascertain to what extent they are raising concerns about pay inequalities with the companies in which they invest your money and to encourage them to do more in this respect.

  • What are you doing to address low pay and insecure work within the companies you invest in on my behalf?
  • How many companies have you raised concerns with or asked questions about pay inequalities?
  • Do you publish information about how you have voted the shares/funds you manage in respect of company remuneration policies and reports?
  • Do you specifically consider pay inequalities when deciding how to vote on company remuneration?