Covers all five stakeholder categories

• Shareholders

• Communities

• Marketplace

• Environment

Figure 4.17. The stakeholder categories.

Marketplace is the arena of a company's product or service; its supply chain; production processes; distribution; competitors; alliances and partnerships, local, national and international; and all industry requirements and regulations. The quality of the product is part of this circle, and the attitude or beliefs consumers have about this product. Also included are the inherent dangers for the whole "product category." Shifting values in the arena of food products, for example, would be included here - like the growing awareness of parents about the dangers of sugar consumption for children; the caution about beef purchases; the growing demand for organic foods; or the European aversion to GMOs.

The environment comprises the final terrain in the stakeholder model, yet provides the underlying support for and encompasses all other terrains. The environmental terrain therefore influences and affects all others. It includes all natural macro and micro systems and the quality of those systems: soil fertility and micro organisms; pollination; water quality and availability; air quality; availability of natural resources - minerals, timber, flora and fauna, fisheries. In short, the environmental terrain includes any natural aspect of our planet that supports life or that is a requirement for life. Stakeholders in this terrain are comprised of all the advocacy groups that represent or speak for the natural processes of the earth, its systems, materials, habitats, and creatures.

Currently in development is a follow-on tool that assists a corporation in a more complete stakeholder mapping process that assigns stakeholder partners to roles within each stakeholder category, identifies top stakeholders in each area, and collates those to key success factors for a particular business and industry. The result is

a powerful mapping process that outlines the next steps for a comprehensive stakeholder engagement program.

Because the audit is a software-based tool, information that is gathered digitally can be sorted in a variety of different ways to indicate areas of action for supporting selected business results. Thus, the strength of creating this software "meta-tool" as a higher order analysis device that aggregates data across many CSR/SRI standards means that the range of analysis approaches available to a corporation is increased. Business planning can be accomplished using the standard business criteria listed above, or by the five stakeholder categories, or by each individual contributing CSR/SRI standard.

The CAP Gap Audit™ assessment tool grades a corporation's CSR/SRI performance and generates "readiness" indicators for the top-ranking standards. Risk areas are flagged, performance is documented, and results are delivered in a concise high-impact executive report or on-site presentation. Figure 4.18 illustrates one of the reporting features - Readiness Indicators - for the major accountability standards that the CAP Gap Audit reprises.

The analysis features of the CAP Gap AuditTM allow participating companies to understand their current business opportunities and risks and use the compiled data to direct their efforts to bottom-line business planning.

An additional benefit is one reporting framework that can relieve "survey fatigue," which is often experienced at leading companies that want to report to a

Figure 4.18. Readiness indicators.

variety of standards organizations. The CAP Gap AuditTM can provide one comprehensive executive report that includes:

• Benchmarks of a company's performance against the 17 standards at once;

• Repository of CSR/SRI information from which data can be sorted for a variety of purposes;

• Information needed to create an annual report to meet world class standards;

• Flagged areas of performance and risk - information that will assist in setting priorities and aligning cross-departmental activities;

• Customized responses to standards groups and NGO questionnaires;

• Benchmark measurements against 20 business benefits;

• "To-do" lists by business areas to create linkage and assist in transformation across business units;

• Graphically presented and easy-to-understand data.

4.7.3 Conclusion

The CAP Gap AuditTM is the product of a five-year Future 500 project supported by member companies and organizations such as Bank of America, Mitsubishi Electric, Nike, Det Norske Veritas, ERM, Manning Selvage & Lee, Pitney Bowes, WSP, Coca-Cola, and the Coors Foundation. Leaders from these participating organizations collaborated in the creation of the audit tool either by providing supporting grants for its development or becoming beta-users for its execution and refinement.

Additionally, a group of CAP alliance partners have been convened to provide follow-up consulting or mitigation measures that assist companies in implementing policy and operational changes in key areas targeted by the CAP Gap AuditTM or improved business planning processes.

The audit is generally conducted on site; key executive team members are brought together to discuss aspects of their stakeholder strategy. In the experience of the Future 500 consultants, this is often the first time a cross-disciplinary group of managers has assembled to share critical path information on environmental health and safety issues. This information gathering session is often the beginning of a process of cross-functional collaboration and stakeholder planning within the corporation.

Fundamentally, this audit tool is designed to improve accountability and business planning processes, which, in turn, boost corporate adaptability and market responsiveness to enhance the economic, social, and environmental "triple bottom line" of participating corporate partners. As the field of CSR/SRI continues to develop and mature, we anticipate that tools like the CAP Gap AuditTM will be refined to assist industry leaders in benchmarking best-in-class standards for particular industries.

The CAP Gap AuditTM is one of a new generation of CSR tools that has been developed specifically to accelerate the process of stakeholder engagement, which "is increasingly a part of mainstream business practice" (Net Impact for the Forum for Corporate Conscience, 2004). The CAP Gap Audit™ methodology improves a company's strategic decision-making processes by illuminating stakeholder partner categories and highlighting areas of potential concern, as well as those areas where a company is top-of-class. In the current business environment

Leadership companies no longer see stakeholder engagement as an optional means to 'touch base' with a variety of interest groups; but rather as a critical part of their business strategy. In many cases, companies are using stakeholder engagement to enter challenging markets, resolve or head off confrontations with stakeholder activists, and improve or preserve their reputation in communities and the marketplace.

— Net Impact for the Forum for Corporate Conscience, 2004

In summary, understanding and responding to the CSR/SRI world of standards is no longer considered a "cost of doing business" by industry leaders but rather as an approach to strategic planning that is critical to business survival in the current climate. The Fortune 500 CAP Gap Audit™ is an important tool to consider in the creation of strategic business policies, practices, and stakeholder alliances.

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SUGGESTED READING

G. Eckes, Six Sigma for Everyone, John Wiley & Sons, Hoboken, New Jersey, 2002. G. H. Watson, Six Sigma for Business Leaders: Agenda to Implementation, Goal QPC, Salem, New Hampshire, 2004.

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