The growing criticality of taking on human rights issues in the connected marketplace

By Sarah Sorensen
October 14, 2010

The network has accelerated the globalization of business, connecting stakeholders and resources (talent, partners, raw materials, capital) in ways that are really changing the way business is conducted around the world today. One interesting by-product is that most multi-national organizations are finding they need to deal head on with many humanitarian issues they would normally like to try to avoid - simply because they are now taking place within their own walls.

Because of this, I believe we may be on the cusp of some big changes in the way businesses view human rights issues; many may start to take a leading role in increasing the visibility and urgency of critical human rights issues because they realize it is in their best interests and tied more directly than ever before to the sustainability of their organizations.

In talking to diversity chiefs at multi-national businesses, there is a general awakening occurring among companies that labor, partner and other stakeholder strategies need to shift to account for the truly global nature of business. This is causing the spotlight to turn to a company's HR policies, practices and programs, as organizations understand that creating a more diverse and inclusive culture could be the strategic differentiator and enabler in today's connected marketplace.

The reality is to compete, companies need to be wherever the talent is - employees of companies headquartered in one country no longer need to be located in that country. (Just look at the big blue-chipper IBM, who has as many workers in Brazil, China, India and Russia as it does in the U.S.) Businesses also need to work with the right range of regional and international partners to stay attuned to customer preferences and be ready to serve customers, wherever they may be located. This creates the potential for a whole host of interpersonal and relationship issues.

Many companies are starting to double up their efforts to create a diverse and inclusive culture, because it takes productive cross-cultural collaboration to be successful in this hyper-connected world. It takes both investment in policies, systems and tools, and the constant monitoring and nurturing of an accepting culture. This may entail some touchy feely stuff that may not be the forte of many businesses, but those that can embrace it will find they are better able to facilitate truly useful ongoing communications between people who are located thousands of miles apart, practice different religions, come from backgrounds poles apart, etc. As might be expected, the challenges of creating a culture of equanimity and acceptance today are even more diversified than even just five or ten years ago.

They encompass not only cultural issues and philosophical differences, but also legislative barriers. For instance, how does a company create a culture that engenders acceptance for all employees, when many countries they operate in do not have anti-discriminatory laws and may actually punish segments of the population for being in the minority, such as the 85 countries that criminalize homosexuality. Or how does a company encourage open discussions of all the issues to ensure optimal, circumspect decisions are made when employees have legitimate fears around providing an opposing view, stemming from a lifetime of government censorship, in a country such as China or Iran? Or how does a company put programs in place to maximize the productivity of women, who are outpacing the growth of the male labor force in many parts of the world (the U.N. Global Compact's recommends that women should make up at 30% of an organizations leaders at all levels to prom), when they are operating in a country, say Pakistan or the United Arab Emirates, where women are systematically discouraged from entering the workforce and make up less than 30% of the entire professional talent pool?

These types of issues used to be silo'd in HR or legal, focused around compliance, but for today's multi-national company, they are becoming overarching business issues that can affect the bottom line. Take Africa's 50-plus economies, which are growing at a remarkable pace, with real GDP increasing by an average of 4.9 percent a year between 2000 and 2008. The continent represents an attractive emerging market for businesses, particularly given the structural reforms several African governments have started to implement to encourage economic investment (McKinsey estimates that, by 2010, 18 African cities will hold a combined spending power of $1.3 trillion). When you factor the growth of China, India, and other developing economies, you can see the size of the opportunities represented.

But to participate and effectively compete in these markets, you need some kind of local presence, which means local employees, partners, suppliers, distributors, etc. Now consider the literacy rates in Africa are among the lowest in the world, and 62% of the 155 million illiterate adults in sub-Saharan Africa are women. To tap the opportunities on the African continent, literacy rates turn from being a humanitarian problem to a business problem.

And this is where I am hopeful; we have seen that when something affects the profitability of business, business tends to take a more active stance to try to remove the barrier. We have seen this from the likes of Google's dealings with China, but there is a long way to go.

Almost everyone could benefit - even those companies that are doing a lot of things right. For example, the UN estimated that in the United Kingdom, 75 per cent of the companies on the FTSE 100 Index on the London Stock Exchange do not meet basic levels of web accessibility, thus missing out on more than $147 million in revenue from persons living with disabilities.

Dealing with these issues are becoming core to creating a positive, productive work environment that ensures a business is capable of seizing opportunities, driving innovation, and maximizing market relevancy; the winning companies will be those that can turn everyone's problems into their biggest opportunities for success. By paying attention to human rights issues and driving solutions that improve the human condition, businesses will find there's a lot of sustainable upside to their bottom lines.

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