Develop clear policies
As we learned in the previous module, step 1 of the due diligence process is to embed RBC into your organisation. You can do this by developing a clear policy. All departments and people in a company should understand what they are accountable for at each step of the process.
Embedding into the organisation
Due diligence starts with having clear, recorded agreements about who is accountable for what. Incorporating these agreements into existing procedures or policies delivers the best results. These could be procurement or sales procedures, regular risk assessment & evaluation (RI&E), supplier selection procedures or the code of conduct. Employees are often already familiar with these procedures and ways of working.
It also helps to link due diligence efforts to remuneration policy and job descriptions or profiles. When purchasers are not only judged based on financial targets, they will be more motivated to discuss other topics with suppliers. When the sales department is contacted about frequent, last-minute changes to orders, a practice that has significant consequences in the supply chain, they will be more inclined to work with customers to explore other possible solutions. This turns due diligence into the natural way of working.
Prerequisites
Several things are important for effectively embedding due diligence into an organisation.
Involvement of senior leadership
It is incredibly important that the executive board and senior leadership team recognises the importance of RBC, specifically the role of due diligence, and actively communicates this to employees. Senior management must also allocate people and resources to implement the due diligence process.
Creating support in the organisation
To gain support for changes that contribute to due diligence in the company, it is essential to explain why protecting human rights, animals and the environment is crucial. This topic should become a recurring theme in communication with employees. Active communication about the company’s commitment to human rights and the environment also improves employee engagement.
Availability of capacity
One of the top challenges for small companies is limited capacity. They must manage existing personnel and resources wisely. Clearly defining roles and responsibilities and making due diligence a central element of working methods provides leverage to implement due diligence.
New skills
The due diligence process might require new skills and a fresh perspective on existing business processes. It may sometimes be necessary to train or support employees in their new tasks. These may include talking with suppliers or customers about difficult subjects such as child labour.