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Preparing risk assessments, monitoring union activities, and maintaining vigorous compliance and corporate social responsibility (CSR) programs are all ways to avoid becoming a target of labor-driven campaigns to assail your corporate brand, according to experts.
Today’s international unionization campaigns are more appropriately called “corporate campaigns” because they are orchestrated not just by trade unions, but nongovernmental organizations (NGOs), community leaders, politicians and religious groups, according to global law firm Baker & McKenzie’s Brand Attack, a report on labor relations from the firm’s Future of Work series.
“[Corporate campaigns] attack the brand, not just the company. They target top executives and shareholders, and they focus on human rights violations—issues like child labor, human trafficking and unsafe working conditions that are more likely to garner public attention and damage the company’s reputation among consumers, business partners and investors,” said Kevin Coon, a partner in Baker & McKenzie’s Toronto office.
The purpose of a corporate campaign is still “primarily to increase union membership and expand union power and influence on corporate management,” said Coon. But instead of organizing workers from the bottom up, unions are exerting pressure from the top down, attacking the company’s reputation and advancing public policy positions, he said.
As a result, governments around the world have been imposing stricter regulations on corporate behavior. Just having good relations with unions or works councils on issues such as wages and benefits is not enough, said Coon. “Labor relations has grown beyond the employer-employee relationship to encompass issues like human rights, sustainability and general corporate compliance. Faced with these pressures, multinationals should develop strategies to avoid becoming the target of corporate campaigns and action plans in the event that they do,” he said.
Are You at Risk?
Operations in developing countries are especially vulnerable for multinationals due to underdeveloped and poorly enforced labor laws. “Because of the less-developed nature of labor laws in these countries, it is often easier for unions to find labor and human rights violations to exploit,” said Coon. “Local management may be less sophisticated in their practices and more likely to lack the knowledge and resources to comply with basic labor standards now commonplace in the industrialized world,” which puts the multinational parent company at greater risk, he said.
How to Avoid Becoming a Target
Baker & McKenzie offered the following steps companies can take to protect their brand:
Conduct a comprehensive risk assessment. It’s important to conduct assessments in countries that pose the greatest risk, which are typically developing markets, according to the report.
Ask questions such as:
“At a minimum, it should include a review of wage and hour issues, health and safety conditions, and compliance with collective bargaining agreements because those are the most common catalysts for corporate campaigns,” said Coon.
It’s also crucial to evaluate your corporate compliance program and codes of conduct, he said, looking for areas that could be easily exploited:
Examine the issues that make the organization vulnerable based on the nature of the business. Child labor in the textile industry or environmental issues in the chemical industry are high-profile examples.
Evaluate the company’s supply chain—the hundreds of third-party suppliers, manufacturers, transporters, brokers, distributors and franchisees that make, market, deliver and sell its products.
“These business relationships are often the most vulnerable area of a multinational’s operations because companies have limited control over these third parties, but great liability for their actions,” said Coon. “In the factory fires and building collapses that killed hundreds of garment workers in Bangladesh, it was the multinationals’ subcontractors who owned and maintained the unsafe buildings. Yet it was the big-name retailers whose clothing they were making that made headlines.”
Fix problems, monitor progress. Pick your top vulnerabilities and create an action plan to remedy the issues, then monitor your progress; the report advises:
Align CSR strategically. Developing an integrated CSR decision-making structure that includes the labor function is critical to counteracting corporate campaign claims, according to the report. “Identifying your greatest vulnerabilities can also inform the issues you target in your corporate social responsibility program,” said Coon. An effective CSR program should anticipate the very issues you are most likely to get criticized for. “If you’re a fast-food company, for example, you may want to get involved in anti-obesity campaigns, such as sponsoring health screening programs and 5K races,” he said.
Coon also advised that companies document CSR efforts and results. “These steps will not only help you become a better corporate citizen, but give you positive actions to keep in your back pocket to counteract negative publicity in the event you do become a target.”
Create a crisis team. According to Coon, one of the biggest mistakes companies make is failing to develop a plan to address potential corporate campaigns. “When a labor crisis hits, they waste valuable time scrambling internally to determine who should handle it, often assuming it would fall under the purview of human resources.”
The labor relations function typically has overall responsibility for executing the contingency plan and directing the response to brand attacks in collaboration with representatives from departments such as communications, government affairs, public relations, legal, compliance, CSR and HR, according to the report.
Join voluntary initiatives. Addressing the labor rights issues in your sector can provide a forum for sharing information about current and future labor trends and campaign tactics, as well as help maintain a positive public image.
You’ve Been Targeted: Now What?
Companies that have assessed their vulnerabilities, ensured labor law compliance and monitored international unionizing trends may still become the target of a brand-attack campaign, but the “good news is that they are prepared to minimize the damage,” said Coon.
If your company comes under attack, Baker & McKenzie recommend:
“In places like Europe, however, which have much stronger labor union cultures, taking legal action could make things worse by bringing more unwanted attention to an already tense situation,” said Coon. “In all cases, regardless of location, you must carefully weigh which strategies are likely to be most effective in responding to the campaign while preserving your reputation.”
Roy Maurer is an online editor/manager for SHRM.
Follow him at @SHRMRoy
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