Social Assessment
of
Mal Warwick Associates
and
Response Management Technologies
August 2006
FINAL
Prepared by Pure Strategies, Inc.
Timothy Greiner
47R Englewood Rd.
Gloucester, MA 01930
(978) 525-2214
tgreiner@purestrategies.com
www.purestrategies.com
Prepared by Pure Strategies, Inc.
Table of Contents
1.
Executive Summary _______________________________________________________ 1
1.1.
Outstanding CSR Practices _____________________________________________ 1
1.2.
Recommendations ____________________________________________________
1.2.1.
Build CSR into Human Resource Systems _______________________________
1.2.2.
Integrate CSR Objectives into the Supply Chain __________________________
1.2.3.
Network and Coordinate Firms in the Direct Mail Industry on CSR Issues ______
1.2.4.
Adjusting Current Programs__________________________________________
2.
2
2
2
3
3
1.3.
Aligning the Company around the CEO’s Business Priorities ________________ 4
1.4.
Evolution of CSR at MWA/RMT________________________________________ 5
MWA/RMT Social Assessment Findings _____________________________________ 6
2.1.
Compensation _______________________________________________________
2.1.1.
Wages __________________________________________________________
2.1.2.
Non-Wage Benefits ________________________________________________
2.1.3.
Retirement _______________________________________________________
2.1.4.
ESOP___________________________________________________________
2.1.5.
Profit Sharing _____________________________________________________
6
6
7
8
9
9
2.2.
Governance _________________________________________________________ 9
2.2.1.
Board of Directors _________________________________________________10
2.2.2.
Business Management ______________________________________________10
2.3.
Corporate Responsibility in the Value Chain ______________________________ 11
2.3.1.
Production Vendors ________________________________________________11
2.3.2.
List Management __________________________________________________11
2.3.3.
Code of Conduct __________________________________________________12
2.3.4.
Vendor Social and Environmental Assessments ___________________________12
2.3.5.
Increase the Environmental Integrity of Product Offerings __________________13
2.3.6.
Streamlining MWA/RMT Business Processes ____________________________15
2.3.7.
CSR in the Direct Mail Industry _______________________________________16
2.4.
MWA/RMT Community ______________________________________________ 16
2.4.1.
Corporate Culture _________________________________________________16
2.4.2.
Turnover ________________________________________________________17
2.4.3.
Work-Life Balance _________________________________________________17
2.4.4.
Diversity ________________________________________________________18
2.4.5.
Work Rules and Workplace Flexibility __________________________________19
2.4.6.
Ergonomics ______________________________________________________19
2.5.
Training & Advancement ______________________________________________ 19
2.5.1.
New Employee Training ____________________________________________20
2.5.2.
Position Descriptions and Internal Advancement _________________________20
2.5.3.
Tuition Reimbursement _____________________________________________21
2.6.
External Community and Philanthropic Giving ____________________________22
2.7.
Ethics ______________________________________________________________23
2.8.
Environmental Practices at MWA/RMT Offices in Berkley, CA ______________23
3.
Appendix A: Sample Vendor Code of Conduct ________________________________25
4.
References ______________________________________________________________27
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1. Executive Summary
Mal Warwick Associates and Response Management Technologies (MWA/RMT)
contracted with Pure Strategies, Inc. to prepare a social assessment of the Company’s
operations. The assessment, which examines social equity and environmental issues
at the Company, had two primary goals. First, evaluate MWA/RMT practices
compared to other companies—be they in the direct mail industry, the socially
responsibility business community, or conventional U.S. business. Second, identify a
discrete number of concrete actions the Company could take to improve its
corporate social responsibility practices.
1.1. Outstanding CSR Practices
MWA/RMT excels in many corporate social
responsibility (CSR) areas. The Company founder,
Mal Warwick, has introduced many innovative
practices into the Company in part through his
affiliation with the Social Venture Network and
other progressive business and non-profit
organizations. Pure Strategies’ assessment of the
Company’s CSR efforts found outstanding practices
in the numerous areas.
Corporate Social Responsibility
“Operating a business in a manner
that meets or exceeds the ethical,
legal, commercial and public
expectations that society has of
business. Corporate Social
Responsibility is a guiding principle
for every decision made and in every
area of a business.” (Business for
Social Responsibility, USA)
Profit sharing
In the United States, only one in eight workers
benefits from profit sharing (Palazzi and Starcher
2006.). To our knowledge, no other private business awards 30% of profits to all
employees. The most common practice in the direct mail industry is to give the lion’s
share of profits to a few partners, and much smaller awards to the remaining
employees. Even in the CSR community, such high levels of profit sharing are rare.
Non-wage Benefits
MWA/RMT offers benefits that exceed benefits provided by comparable employers
in the Bay Area according to the Bay Area Direct Mail Benchmark Survey (Bay Area
Survey). These benefits include full medical, disability, dental, and life insurance for
all employees. Company 401K, paid time off, and combined vacation, sick time and
personal time also exceed the Bay Area Survey and national averages.
Corporate Culture
MWA/RMT employees like working at the Company. Through interviews and a
recent employee survey, Pure Strategies found high levels of employee satisfaction,
comfort with the Company mission, alignment with its progressive values, and
support for the new CEO.
Philanthropic Giving
MWA/RMT’s corporate giving program, both the cash-matching and paid volunteer
components, is outstanding. MWA/RMT gives generously to the local community,
setting aside 10% of profit for donations to deserving non-profits. The Company
provides a 100% match for each employee.
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Work Rules
MWA/RMT allows a number of employees significant flexibility – permitting some
workers to telecommute and others to work shifted schedules. Roughly 23% of
employees participated in the program in 2005-06. In addition, employees are
allowed up to three paid hours for doctor appointments. Of course, not all
employees are permitted the same flexibility. Some jobs simply do not permit it (e.g.
production management) and in other cases, managers do not approve of it.
1.2. Recommendations
1.2.1. Build CSR into Human Resource Systems
CSR in Position
Descriptions, Bonuses
and Performance
Evaluations
Mal Warwick Associates’ commitment to social equity and environmental causes is
tied directly to the convictions and practices of its founder. But as the founder
continues to move away from the day-to-day management of the Company, it’s
important to build this function into the DNA of the Company, though channels
such as committees, job descriptions, and performance evaluation systems. The
Company should use its Star Bonus system to reward employees that
contribute significantly to MWA/RMT’s CSR performance. In addition,
specific CSR responsibilities should be incorporated into several positions:
• Chief Executive Officer
• Production Coordinator
• Human Resources Manager
• Production Manager
• RMT President
• Client Consultants
Once built into these positions, performance evaluations should review employee
efforts. MWA/RMT could also establish an internal CSR team, focused internally on
company practices to give line employees an opportunity to contribute. Section 2.5.2
on page 20 reviews this recommendation in detail.
1.2.2. Integrate CSR Objectives into the Supply Chain
Production vendors represent perhaps the greatest opportunity for MWA/RMT to
deepen its CSR commitment. Beyond the use of 30% recycled paper, soy inks, and
the use of union shops, the Company has few CSR policies or practices in its supply
chain.
Code of Conduct:
From a social equity standpoint, most firms start with a basic Code of Conduct to
ensure their vendors comply with legal requirements, including working hours, child
labor, minimum wage rules, freedom of association, and legally mandated benefits.
Ensuring your supply chain meets legal requirements is important not only for
MWA/RMT, but also for its clients. All parties want to avoid the reputation damage
from an accident or major compliance violation at a MWA/RMT vendor. See
detailed text in section 2.3.3on page 12.
Evaluate and Encourage Beyond a Code of Conduct, the next phase of CSR engagement involves evaluating
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Vendor CSR Practices
and encouraging vendor CSR practices. Typically this entails surveying key vendors
and benchmarking best practices, be they energy efficiency or worker wages and
benefits. See detailed text in section 2.3.4on page 12.
Increase Environmental
Integrity Of Product
Offerings
While MWA/RMT pioneered efforts in the 1980s and 1990s to specify recycled
content paper and envelopes and use soy-based inks, the Company has not
aggressively pursued new paper and material sourcing options. Section 2.3.5 on page
13 outlines a series of opportunities in this area:
• Assess Compliance with Current Specifications
• Evaluate Paper Sourcing Options For Environmentally Aware Clients
• Establish Design Standards
• Evaluate PLA-based Window Film
Aligning Values
To Create Value
It is important to note that as a general rule, CSR supply chain strategies will
fail if they only add cost. Instead, CSR strategies either must either reduce cost as in
energy efficiency and waste reduction, or add value as in a union bug. It is important
that MWA/RMT communicate any of the benefits of any initiatives it takes
with its suppliers to its clients. Doing so increases MWA/RMT’s brand value,
improves company reputation, and maintains client loyalty. Some practices may
increase costs, and be of value only to a subset of clients. For example,
environmental groups may be the only client group willing to permit increased paper
costs for using certified sustainably harvested paper products.
1.2.3. Network and Coordinate Firms in the Direct Mail Industry on CSR Issues
Corporate social responsibility practices are growing by leaps and bounds in the
broader business community. Not only is CSR growing among environmentally
focused non-profits, but at conventional retailers like L.L. Bean and large insurance
companies such as AIG. In 2005, the DMA announced the formation of its own
CSR Committee. In an interview with Pure Strategies, committee member Jeanette
Cassano of the American List Counsel, Inc. highlighted the importance of this work,
emphasizing the need for leadership in the area from companies like MWA/RMT.
Whether participating in regional networks of direct mail professionals interested in
the topic or highlighting environmental and social equity practices in their newsletter,
MWA/RMT and its founder have the potential to play a leading role in this
movement. Section 2.3.7 on page 16 details this recommendation further.
1.2.4. Adjusting Current Programs
This section lists a number of smaller adjustments and recommendations for existing
programs and processes. Several of these recommendations endorse current
priorities of the CEO.
Table 1: Recommended Adjustments to Current Programs
Recommended Adjustment
1. Institute an annual performance review for all employees.
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2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
Ensure compensation for the lowest paid workers exceed the
local living wage.
Broaden 401k offerings
Clarify Board member roles & expectations
Restructure the Steering Committee into Strategy and
Management Teams
Better utilize the National Change of Address Database
Conduct ergonomic evaluations after new workstations are
installed.
Improve the new employee training process
Establish an internal eco audit team, hold a design charrette
Continue refining position descriptions and career tracks
Better publicize the tuition reimbursement program
Increase employee participation in the philanthropic program
8
10
10
11
19
20
20
20
21
22
1.3. Aligning the Company around the CEO’s Business Priorities
MWA’s new CEO enjoys broad confidence and support throughout the
organization. He is also bringing significant change to an organization that has
changed little over the past decade. The MWA/RMT community generally welcomes
his ideas because of his consultative and inclusive style for developing and
introducing ideas. Nevertheless, change in any organization can be difficult,
particularly for long-term employees comfortable with historical practices and
business processes.
Several of the Company’s new initiatives are critical to the future of CSR
efforts at MWA/RMT. The lack of time staff has to focus on CSR opportunities
such as exploring new paper and material options for mailings, better use of the
National Change of Address database, participation and leadership in national CSR
forums such as that run by the DMA, will not be solved by adding more staff or
piling CSR duties onto already overworked staff.
Streamline Business
Processes and
Standardize Position
Descriptions and Job
Functions
Instead, the Company needs to follow through with efforts to streamline its
company-wide processes. Doing so will make it easier for MWA to meet its
production schedule and free up resources in the production and client consultant
positions to test out new CSR strategies. Similarly, creating more standardized
position descriptions and job functions will give junior staff possible career paths
and offload work from the Company’s busy consultants. Cross training within and
between departments would permit more flextime and other family-friendly policies.
From an employee perspective, the more aligned nature of the future MWA/RMT
has its upside. Greater alignment means improved profitability, more resources for
CSR initiatives, and a better work-life balance for some staff members that work well
beyond their 40 hours per week.
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1.4. Evolution of CSR at MWA/RMT
As a leader in the corporate responsibility movement, MWA/RMT has pioneered a
host of progressive business practices over the 27 years of its existence – including
practices such as profit sharing, working with progressive causes, and providing
generous employee benefits. As Jeffrey Hollander, CEO of Seventh Generation says,
“there is no completely responsible corporation.” Seen through this lens, CSR is
more a journey than a destination. Table 2 depicts this journey towards deeper
commitment, highlighting typical practices at different points along the journey.
Table 2: The Journey toward Deeper CSR Commitment
Place on the
Journey
Typical Practices
Light
Commitment
• The company is primarily concerned with responding to customer complaints.
• It shows no real commitment to social or environmental issues or initiatives.
Compliant
• The company voluntarily takes on environmental and social obligations as needed to
maintain its operations.
• The company is compliant with environmental and operational standards.
Strategic
• The compliant company finds specific areas of CSR to focus on, which are strategic to the
Company’s image and well-being. It develops strategies within one or two aspects of CSR
around which it can develop a competitive advantage and have an impact.
• CSR initiatives, such as supporting a community recycling program, are strategically, not
philosophically, based.
Integrated
• The company has established comprehensive CSR policies in all areas of its operations,
with rigorous performance standards, objectives, and reward mechanisms in place
• CSR informs the decision-making and business operations throughout the Company.
• The company has integrated CSR throughout its business model, not as a strategy, but
from a philosophical perspective – the belief in the need to take social and environmental
impacts into account, and to do something about them.
Fully
Committed
• The company operates in partnership with a group of companies to work together to
improve social or environmental conditions.
• These companies move to a higher level of addressing core questions about sustainable
consumption, use of natural resources, intergenerational equity, and other universal
environmental and social issues.
Source: Adapted from the DMA Environmental Resource for Direct Marketers
Our assessment found Mal Warwick Associates beyond the strategic stage and
exhibiting aspects of both the Integrated and Fully Committed phases. Hopefully,
this assessment provides a compass and a map to help MWA/RMT on its journey
towards even deeper levels of CSR commitment.
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2. MWA/RMT Social Assessment Findings
To conduct this assessment, Pure Strategies visited MWA/RMT on June 6-7, 2006,
meeting with 20 employees and three board members. Telephone interviews were
conducted with four additional employees. MWA/RMT staff, particularly the CEO
and the Human Resources Director, provided helpful information on a range of
company practices, policies, and procedures. Pure Strategies compiled a draft report
and incorporated comments from both its Founder and its CEO.
The assessment findings are divided into eight main sections covering compensation,
governance, the value chain, MWA/RMT community, training and advancement,
philanthropic giving, ethics, and environmental practices. Due to limited resources,
Pure Strategies did not review the CSR implications of internet-based fundraising.
2.1. Compensation
This section reviews company compensation – wages, non-wage benefits, retirement,
and profit sharing. Although each area is discussed separately, together they
constitute the full compensation provided to employees.
2.1.1. Wages
CSR measures for evaluating wages include whether company wages meet a living
wage standard for the local area, the wage spread between the lowest and highest
paid worker, and whether wages are comparable to the industry mean.
Living Wage
The City of Berkley enacted a Living Wage Ordinance (LWO) June 21, 2000. The
ordinance ensures that businesses in a contractual relationship with the City pay their
employees a wage that can support a family at, or above, the poverty level. Effective
June 30, 2006, the current living wage is $11.39 per hour plus a medical benefit
equivalent to at least $1.89 per hour. In addition, employees receive at least 22 days
off per year for sick leave, vacation, or personal necessity1:
The minimum wage paid at MWA/RMT does not meet the LWO unless a portion
of the MWA/RMT’s annual profit sharing is included in the wage calculation.
Should the Company miss its profit target, compensation to the lowest paid
workers could dip below the Berkley LWO. MWA/RMT should ensure that
its lowest paid workers receive sufficient profit sharing to keep their
compensation above the Berkley living wage2.
Wage Spread
There is no small business or CSR standard for the wage spread between a
company’s highest and lowest paid employee. According to the Institute for Policy
Studies-United for a Fair Economy, the ratio total compensation between the highest
Twelve of these required 22 days off must be compensated at the same wage as for a normal working day; 10 of these
22 days may be uncompensated days off.
2 Note Pure Strategies conducted a full salary review of all positions.. The full living wage analysis was shared with the
founder and CEO but deleted from the final report to maintain the company’s policy of keeping salary information
confidential.
1
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and lowest compensated employees average 431:1 for the nation’s largest companies
(Anderson & Cavanagh). In CSR circles, Ben and Jerry’s was well known for its 7:1
salary ratio – although that was later scrapped when the Company found it could not
attract qualified candidates for its first externally hired CEO. Trillium Assets, a small
Boston-based social responsible investment firm, limits the ratio of CEO to median
employee pay to approximately 4:1.
In 2005, MWA/RMT’s salary ratio was 5.6:1; the Company’s total compensation
ratio (salary plus profit sharing and bonus) was 4.5:1; and the median employee ratio
was 2.7:1. These ratios are well in line with CSR standards. The opening of the
DC office and the need to adequately compensate the staff in a very competitive
labor market is partially responsible for pushing the Company’s salary ratio beyond
its historical average of roughly four to one. Currently the Company has no formal
policy on wage or total compensation ratios. It may be worth tracking the ratios and
developing policy to ensure the ratio is kept to a reasonable level.
Compensation
Benchmarking
Pure Strategies reviewed the CEO compensation benchmarking efforts, which
included data from Salary.com and a four-company analysis known as the 2006 Bay
Area Direct Marketing Benefit / Compensation Analysis. The CEO’s analysis
concluded that, when taken together, MWA/RMT wages, profit sharing, and
benefits were equal to the median wages in both surveys. We reviewed these results
with the CEO and saw no grounds for disagreement.
Compensation benchmarking is notoriously difficult, however. In reality, the labor
market sets the standard and ultimately arbitrates whether a company adequately
compensates its workers. Other than at entry-level positions where opportunities for
advancement are limited, MWA/RMT has not had staff leave the Company due to
inadequate compensation.
The CEO has been discussing with some employees whether that MWA/RMT
offers competitive base compensation. If one looks at wages alone, they may be.
However, we found that most staff members discontented with their wages felt their
combined wages, benefits, and profit sharing made up for any deficiency in straight
wage compensation.
The Company lacks any annual formal performance review policy to allow for
performance and/or cost-of-living wage increases. The lack of such a process
makes it difficult for MWA/RMT employees to keep up with inflation and
undermines the Company’s labor market competitiveness. The CEO has expressed
interest in conducting employee reviews annual and conducting a comprehensive
company wide salary review every other year.
2.1.2. Non-Wage Benefits
MWA/RMT offers benefits that exceed the typical benefits provided by
comparable employers in the Bay Area (see Table 3 below). These benefits
include full medical, disability, dental, and life insurance for all employees. Company
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401K, paid time off, and combined vacation, sick time, and personal time also
exceeds the Bay Area Direct Mail (DM) Benchmark.
Table 3: MWA/RMT Non-Wage Compensation vs. Bay Area DM Survey
Item
Work Week
Monthly Health Insurance
401K
Paid Time Off - Year 1
Paid Time Off - Year 6
Paid Time Off - Year 11
*Average
Bay Area DM Survey
High Average Low
40
39
37
$150
$140
$118
5%
3%
1%
33
29
26
39
34
31
44
39
36
MWA/RMT
40
$286*
5%
33
38
43
employee contribution.
MWA/RMT’s 100% employer paid health care exceeds the national average
as well. For example, in 2005, only 41% of employers with 3 to 199 employees
offered any type of heath care coverage to all of their workers. U.S. workers with
single health insurance on average pay 16% of their premium (Kaiser 2005). It’s
worth noting that MWA/RMT’s practice of fully funding health insurance is
standard in the progressive direct mail industry. By the mid 1990’s, all major direct
mail agencies began funding 100% of employee health care cost as a result of the
Clinton universal health care initiative.
MWA/RMT employees value the Company’s non-wage benefits, pointing out the
health insurance and the 401K plan in particular. Other than one recent hire that
expressed a strong design for more vacation time, there were no significant
complaints about the Company’s non-wage benefits.
2.1.3. Retirement
MWA/RMT’s retirement benefits include a 3% 401K contribution and a 2% ESOP
contribution – both based on gross earnings. These contributions were at the high
end of the Bay Area DM Benchmarking Study and exceeded the national average.
According to the 401K Help Center (www.401KHelpCenter), U.S. company 401K
contributions averaged 2.8% of payroll in 2004.
The 401K and ESOP plans are managed by Ameritas. The 401K plan includes 12
mutual funds and a money market fund. This is in line with industry averages. For
example, 80.8% of plans offer 10 or more fund options for participant contributions
(401K Help Center). The average number of funds offered equaled 14. While the
portfolio offers both socially responsible investment options most fund types, they
are all Calvert funds – a family of funds that has underperformed compared to other
CSR funds. Furthermore, there are few options for investors that do not want to
invest in socially responsible funds. The Company should review its 401K fund
options with an eye towards better performing socially responsible funds.
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2.1.4. ESOP
ESOPs are known for aligning employees and management around company
profitability and growth. In MWA’s case, the ESOP will help the Company transition
from a single owner to a majority employee owned business. A 2000 Rutgers
University study found that ESOP companies grow 2.3% to 2.4% faster than would
have been expected without an ESOP for sales, employment, and sales per employee
(Blaise and Kruse 2000). A 1987 study by the National Center for Employee
Ownership of 45 ESOP and 225 non-ESOP companies, found that companies that
combine employee ownership with a participative management style grow 8% to
11% per year faster than they would otherwise have been expected to grow based on
how they had performed before these plans. More recent studies by the General
Accounting Office found the same relationship. MWA should continue its ESOP,
employee stock purchase, and stock bonus plans.
2.1.5. Profit Sharing
MWA/RMT generously shares its profits with its employees. Most direct mail
companies provide the employees with a much small share of annual profits, while
the lion’s share is given out to partners and other executives. Interviews with
employees confirmed that the quarterly profit sharing is a significant piece of their
overall compensation, especially for lower wage employees for whom profit sharing
can be 12 to 22% of their total compensation.
MWA/RMT’s profit sharing practice exemplifies corporate responsibility practices
by giving workers a real financial stake in their company. Few companies have both a
5% 401k / ESOP plan and distribute 30% of company profit to every employee.
Most recently (June 2006), the Company decided to allocate $100,000 of profit to
retained earnings each year – a decision that lowered profit sharing amounts for
employees. The decision was widely accepted by employees and seen as a necessary
move to invest in the future of the Company.
Several employees pointed out the CEO’s presentation on the Company’s finances
helped them to better understand how the business operates and makes money. Pure
Strategies recommends the Company continue to educate its employees on company
finances.
2.2. Governance
From a social responsibility perspective, good governance balances the interests of
employees, customers, investors, lenders, affected communities, and other
stakeholders in strategic objectives and in day-to-day management decisions.
MWA/RMT excels in many governance categories:
• Senior executives are accessible to employees and other stakeholders;
• The Company enables regular communication and consultation between board
members, management, employees and other stakeholders through meetings, its
stakeholder report, and open door policy;
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• Employee representatives sit on both the MWA Board and the RMT Board;
• The board and management embrace a “stakeholder trustee” role while
protecting long-term shareholder value; and
• Executive management recognizes the importance of fair process in making
decisions and communicating them throughout the organization.
2.2.1. Board of Directors
MWA’s Board has several outside directors who are not investors or employees of
the Company. The Board’s role is largely advisory to the founder and the new CEO.
Compensation for outside Board members is nominal - $250 per meeting, or $1,000
per year. The Board has a strong CSR advocate who is also a member of the Social
Venture Network. MWA also plans to review this report with its Board as a means
of assessing future CSR initiatives at the Company.
Several Board members expressed interest in clarifying their role and expectations
regarding the responsibilities of small business directors. MWA should continue to
work with its directors (both independent and employee representatives) on this
issue.
2.2.2. Business Management
For the past several years, a 13-member Steering Committee has provided advisory
services to the CEO. Dan Doyle has signaled his intention to disband this
committee. The Committee has too many members and includes persons whose
positions are not strategically important for developing and implementing company
strategy. In interviews conducted by Pure Strategies, several current Steering
Committee members acknowledge the helpful role the Steering Committee played in
the last few years. During our interviews, employees agreed with the CEO that time
had come to disband the Committee and form a new management structure.
However, interviews with employees, including former Committee members,
provided little guidance on the size and composition of the Committee during
interviews other than the recognition that Vice Presidents and Consultants should be
represented.
Strategy Team
To select members for its new strategy team, MWA/RMT should look to the
key business processes in the organization. In MWA/RMT, these business
processes include:
• Accounting and financial management
• Sales (e.g., account development and administration)
• Production management – both front end (MWA) and back end services (RMT)
These business processes must be well aligned and involved in developing company
strategy and therefore represented on the new strategic management team. With this
as a guide, MWA/RMT could form a five-person team comprised of the CEO, a
financial person, a VP Consultant, the Production Manager, and the President of
RMT.
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Management Team
With the new Strategy Team (ST), the Company will need a larger Management
Team (MT) to implement key initiatives and ensure smooth operation of the
Company. Many of the former Committee members would serve on the MT and
continue to play a vital role in running the Company.
2.3. Corporate Responsibility in the Value Chain
Opportunities abound for MWA/RMT to manage social equity and environmental
issues in the Company’s value chain. The Company has a strong track record of
accomplishment in this area, pioneering recycled content in its paper, working with
union shops, and purchasing supplies from vendors like Give Something Back. But
there are more opportunities for the Company to show leadership and work to align
its value chain with its own progressive values. This section outlines these
opportunities and addresses the issue of how the Company might staff these tasks
given its limited resources.
2.3.1. Production Vendors
Production vendors represent perhaps the greatest opportunity for
MWA/RMT to deepen its CSR commitment. The Company currently uses
several mid-western vendors for much of its printing, lasering, and lettershop work.
Recently, the Company turned to Production Solutions, which in turn bids out the
work to its network of vendors. Beyond the use of 30% recycled paper and a
preference for union shops, the Company has no other regular CSR policies or
practices in its value chain.
Aligning Values
To Create Value
As a general rule, CSR supply chain strategies will fail if they only add cost.
Instead, CSR strategies either must either reduce cost as in energy efficiency and waste
reduction, or add value as in a union bug. CSR supply chain initiatives must also avoid
two other traps – telling a vendor how to run their business and being seen as
moralizing. When done well, CSR supply chain strategies better align and advance
MWA/RMT and its vendor partners.
It is important that MWA/RMT communicate to its clients the benefits of any
of its initiatives involving its suppliers. Doing so will increase the MWA/RMT
brand value, improve the company’s reputation, and maintain client loyalty. Some
practices may increase costs and be of value only to a subset of clients. The use of
the union bug is a good example. Some clients will pay for it while for others, the
few dollars per thousand pieces can increase a mailing’s cost from five to ten
thousand dollars, making the option unaffordable.
2.3.2. List Management
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In direct mail, good list management makes business and environmental sense. It
reduces job cost, improves donor response rates, and reduces needless paper use.
But MWA production staff has difficulty finding the time to check the National
Change of Address Database for large acquisition mailings. Production staff face
short deadlines and a less than efficient business process. It is important that MWA
find ways to improve this function.
2.3.3. Code of Conduct
CSR supply chain initiatives are generally divided into two categories – social equity
and environmental performance. From a social equity standpoint, most firms
start with a basic Code of Conduct to ensure their vendors comply with legal
requirements, including:
•
•
•
•
•
•
•
Working hours & conditions requirements
Non-discrimination
Child labor
Forced or indentured labor
Minimum wage rules
Freedom of association
Legally mandated benefits
Ensuring you supply chain meets legal requirements is important not only for
MWA/RMT but also for its clients. Everyone wants to avoid the reputation damage
that could ensue if press covers an accident or major compliance violation at a
print/laser/lettershop vendor processing direct mail pieces for an MWA client. The
Code of Conduct can be worked into existing contracts or be a stand-alone
agreement between two parties. See Appendix A for a model Code of Conduct.
2.3.4. Vendor Social and Environmental Assessments
For socially responsible businesses and even mainstream consumer brands, it has
become almost a necessity to assess the social and environmental performance of
key vendors. In the past, companies like Nike and Gap that dismissed the issue
suffered serious reputation damage.
Supplier Social
Assessment
Beyond a Code of Conduct, the next phase of CSR social engagement examines how
the vendor handles issues such as:
•
•
•
•
•
•
•
Worker health and safety
Diversity and inclusion
Local community involvement
Use of temporary workers
Wages and benefits
Employee turnover
Basic compliance with wage laws and regulations
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Typical procedures for assessing performance in this area include a desktop review
followed by an on-site visit using a standardize assessment tool. Such a review may
not be as daunting as it sounds. A quick review of one vendor’s website (ARS) found
detailed information about the Company’s medical, dental, insurance, and retirement
benefits. Pure Strategies can assist MWA/RMT with crafting a social equity
engagement plan. Many internet resources are available as well.
Supplier Environmental Similar to the social assessment, MWA/RMT can engage its suppliers in an
environmental
Assessment
assessment. This could include encouraging vendors to conduct energy efficiency
and waste reduction assessments, obtaining assurance that the firm is in compliance
with its environmental requirements, etc. Environmental assessments conducted by
electric utilities, state, and/or university programs often provide win-win solutions to
small and medium manufacturers that lack the resources to conduct their own
assessments.
MWA’s use of Minnesota-based vendors presents an opportunity to partner with one
of the nation’s premier technical assistance organizations. The Minnesota Technical
Assistance Program, located at the University of Minnesota (MnTAP), provides
excellent free technical resources for Minnesota businesses of any kind. MnTAP staff
have printing expertise. Furthermore, Pure Strategies has a personal relationship with
the Director, Cindy McComas. We highly recommend this resource to any MWA
Minnesota vendors. Many small- and medium-size manufacturers find significant
cost savings with environmental assessments conducted by MnTAP. For more
information on MnTAP, visit their website: www.mntap.umn.edu.
MWA/RMT would use results of these social and environmental assessments at its
most important vendors to recommend possible changes strengthen business
relationships, or if necessary, steer business to vendors more aligned with the
Company’s values.
2.3.5. Increase the Environmental Integrity of Product Offerings
MWA pioneered efforts in the 1980s and 1990s to specify recycled content paper
and envelopes, use soy-based inks, and, until recently, specify glassine for envelope
windows. The Company however could more aggressively embrace new paper and
material opportunities available on the market today. The Company should work
with its vendors to determine if these new products meet customer performance and
cost parameters. The DMA lists numerous practices in its publication Environmental
Resource for Direct Marketers. Table 4 presents a partial list of activities MWA could
investigate with its vendor partners.
Table 4: Vendor Environmental Practices
Opportunity
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Assess Compliance
with Current
Specifications
New Paper Sourcing
Options For
Environmentally
Aware Clients
Establish Design
Standards
Evaluate PLA-based
Window Film
The Company has limited capability to periodically assess whether
vendors are meeting its 30% PCR and soy-ink specifications. Suppliers
should be periodically reviewed for compliance with MWA
specifications.
The Company’s innovative 30% PCR stock and soy inks are now the
industry standard. There are many more innovative paper products on
the market today, including:
• Paper with high levels of PCR content;
• Chlorine-free bleached paper;
• Paper made from a combination of recycled stock and virgin fiber
from sustainably harvested forests3.
MWA has limited written design standards. Design choices, such as
paper weight and size, adhesives, inks, and other materials, impacts the
amount of paper used and its recyclability. MWA/RMT should examine
adopting design standards such as:
• Minimizing the number of components in a mailing;
• Considering sizing options to reduce amount of paper use;
• Sizing components to better fit printing presses;
• Reducing the use of staples and non-compliant pressure sensitive
adhesives; and
• Lightweighting paper where possible.
PLA, a non-petroleum, corn-based plastic marketed by EarthFirst,
meets USPS requirements and costs the same or less than glassine
envelopes4.
A Menu of Options
Some of these environmental innovations may add cost and therefore may not be
appropriate for all clients or all jobs. MWA may find that its environmentally aware
clients may not want to offer a premium product for an acquisition mailing, but
instead reserve it for renewals, special appeals, or high gift donors. By experimenting
with these sourcing options and determining their price, delivery and quality,
MWA/RMT can deepen its own and its client’s environmental commitment.
Communicate the
Benefits
MWA/RMT should communicate the environmental benefits of any new paper
sourcing options to its clients. As the recently hired Washington-based client
consultant stated, “marketing the message that MWA/RMT is working with socially
responsible suppliers is very important since our clients represent progressive causes
and we are helping them to do their small part to change the world.” This type of
communication would not lead the MWA/RMT sales proposition, but instead be a
value-added selling point.
There are many simple, internet-based tools for doing so, such as the paper
calculator run by Environmental Defense: www.papercalculator.org. For example,
Here we recommend using paper certified by the Forest Certification Council (FSC). It is the only true
multistakeholder certification system. Other U.S. systems, such as the Sustainable Forestry Initiative (SFI) are industry
initiatives that lack credibility with the environmental community.
4 Polylactic Acid or PLA represents an exciting departure from petroleum-based plastics. It does have a low melt
temperature, meaning it can distort at temperatures near 125°F. Thus it may only be appropriate for use as a window
film on a seasonal basis – i.e., for nation-wide mailings sent from October through April – when ambient temperatures
are below 100°F.
3
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based on the 2000 EcoAudit estimate that MWA mails 260 tons of paper per year,
the Company and its clients would save the following by switching from 30% to
80% PCR content paper:
• Virgin pulp equivalent to 3,120 trees
• Enough energy to power 24 U.S. homes
• Greenhouse gases equivalent to taking 25 cars off the road
• Solid waste equivalent to five garbage trucks
Of course, any new environmental practices require careful analysis – for example,
some high post-consumer content papers do not take inks well. Any material change
should be thoroughly evaluated for price, quality and delivery before being sourced.
Figure 1: Benefit of Increasing PCR Content
Impact
Total Energy (M BTU's)
Solid Waste (lbs.)
Adsorbable organic
halogens (lbs. AOX)
Greenhouse Gases (lbs
CO2 equiv.)
Wood Use (tons)
0%
25%
50%
75%
100%
Percent Reduction
80% PCR
50% PCR
30% PCR Paper
Note: Environmental impact estimates were made using the Environmental Defense Paper
Calculator. For more information visit http://www.papercalculator.org.
2.3.6. Streamlining MWA/RMT Business Processes
While the opportunities for launching CSR initiatives in the value chain seem
unlimited, MWA/RMT resources to carry them out are extremely limited.
Production staff, the likely lead in any effort to push supply chain CSR initiatives,
have difficulty meeting existing work requirements and deadlines. Similarly, MWA
consultants work long hours, leaving them little time to research and devise tests for
their clients to probe the value of various social equity or environmental product
offerings.
The need for better aligning department activities is well known at MWA – the
practice of staff using non-standard procedures adds time and cost to department
processes. MWA’s efforts to streamline business processes are key to freeing
up resources to pursue the CSR value chain options outlined in this section.
Similarly, proper training and use of staff such as client coordinators could
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reduce the burdens faced by some staff members. As one MWA staff member
said, “We spend roughly 30% of our time finding information. If we could work
more efficiently, we could improve our consulting services.” Streamlining the
MWA accounting function would similarly provide new human resources for
improving client services.
2.3.7. CSR in the Direct Mail Industry
No direct mail company, regardless of size, can by itself move the direct mail
industry towards higher levels of social and environmental authenticity. MWA/RMT
should look for strategic places to play a CSR leadership role – much like it did in the
1980’s with its efforts to set industry ethical standards. As Jeanette Cassano of the
American List Counsel, Inc., suggested, the need for leadership in the direct mail
industry from someone like Mal Warwick is critical. “What we need is leadership,
someone that can connect all the environmental advocates in organizations across
our industry, and start to network them through conference panel discussions and
other venues… MWA could also highlight environmental and social equity tips in
their newsletter.”
According to Ms. Cassano, although environmental non-profits including
Environmental Defense, Natural Resources Defense Council, ARP, National
Geographic, and others take the issue seriously, she has found limited interest in the
broader direct mail industry. Our experience with other sectors reinforces the value
of this approach. Working together, companies can set standards such as those for
paper procurement, codes of conduct, or printer certification. Doing so reduces the
time and cost of making changes in the supply chain.
2.4. MWA/RMT Community
2.4.1. Corporate Culture
Pure Strategies’ visit to MWA/RMT found a vibrant, supportive, and enthusiastic
company culture. Staff members work at MWA/RMT because they like the people
there, the flexibility, the opportunity to work on causes they believe in, and the
benefits they receive. Junior level employees spoke of a nurturing environment, one
that was very supportive and where senior leaders provide valuable mentoring. As
one recent hire said, “I’ve had other jobs and was never tied to the Company culture.
But at MWA/RMT, the goals of the Company are great. I’ve never worked at a place
that fit me better.” The recent employee satisfaction survey conducted by the CEO
confirms these findings. For example, the survey found that 75% of respondents are
happy overall working at MWA/RMT and 95% support the direction of the
Company.
MWA/RMT Relations Staff view recent efforts to bring together MWA and RMT employees favorably.
This includes the recent Employee Extravaganza, Bagel Fridays, and periodic events
such as Thirsty Thursday Barbecues, luncheons, etc. The legacy of strained
relationships between MWA and RMT appears to be fading. As one RMT staff put
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it, “I’ve heard about how RMT doesn’t feel like were treated equally by MWA, but I
don’t feel that at all.” Virtually every RMT staff member concurred that the “ugly
stepchild” issue was a thing of the past. A single employee did cast the issue in a
negative light, but then acknowledged the helpful steps Dan Doyle is taking to
address it.
2.4.2. Turnover
MWA’s long-term employee base is one of the organization’s greatest strengths –
providing experience, expertise, and connection to its clients. During fiscal year
2005-06, the Company experienced abnormally high turnover (see Table 5). Several
staff left to pursue other jobs. One staff person was let go for performance reasons.
The turnover rate in the current fiscal year retuned to more normal levels.
Table 5: Employee Turnover and Length of Service
Turnover Rate
Length of Service
Total Years
Total Staff
Avg. length of service
Employee Experience
10+ years
6-10 years
2-5 years
<2 years
FY 2006-07
FY 2003-04 FY 2004-05 FY 2005-06 thru 6/30/06
15%
10%
30%
8%
250
36
7
272
39
7
287
40
7
9
7
15
5
9
9
10
11
12
7
7
14
Turnover rates for employees in the two to five year range should be monitored. In
the recent past, turnover was high among employees in this tenure range.
2.4.3. Work-Life Balance
For most employees, the MWA/RMT work environment allows employees to
adequately balance work and private priorities. However some employees, especially
several consultants, spend a great deal of overtime at the Company. As one
consultant put it, “We set up a culture of overtime here. There is this undercurrent
of expectation that the consultant will work long hours. We also have this attitude
that, ‘a junior person cannot do it, I’ll do it.’
The discussion in section 2.3.6 on page 15 concerning the need to streamline
business processes and effectively use client coordinators is applicable here. These
changes are critical in preventing some of MWA/RMT’s most valuable staff from
burning out.
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2.4.4. Diversity
Diversity is more than merely hiring certain people or acknowledging and/or
tolerating difference. Instead, it’s a set of conscious practices that involves mutual
self-respect and recognizing that personal, cultural, and institutionalized
discrimination creates and sustains privileges for some while creating and sustaining
disadvantages for others. Supportive workplaces build alliances across human
differences to work collaboratively to end discrimination (Iowa State University).
Employee interviews indicate that MWA/RMT has a progressive and open policy of
non-discrimination and a culture that embraces diversity. Measures of diversity in the
employee and management ranks are incomplete proxies for this more robust
definition of workplace diversity. Nevertheless, such measures can provide insight
into the employee base and highlight opportunities to make organizations more
diverse through hiring practices. Data for the last three fiscal years (see Table 6)
shows that MWA/RMT’s employee base has changed slightly over the past three
years, with slightly fewer persons of color and female employees. The Company
workforce is nearly as racially diverse as the Berkley community, which, according to
2000 census data, is 40% persons of color.
Table 6: MWA/RMT Employee Diversity 2003 - 2006
Caucasian
African American
Asian
Other
% Persons of Color
% Female
Fiscal Year
2003-04 2004-05 2005-06
22
27
28
4
4
4
9
7
7
1
1
1
39%
31%
30%
67%
61%
57%
Among managers, the Company is racially more diverse today than any time in the
past three years. From a gender perspective, it lacks male representation in
management positions. The Board of Directors however, is weighted in the opposite
direction, with four males and one female.
Table 7: MWA/RMT Management Diversity 2003 - 2006
Fiscal Year
2003-04 2004-05 2005-06
Caucasian
3
6
4
African American
0
0
1
Asian
0
0
0
Other
0
0
0
% Persons of Color
0%
0%
20%
% Female
100%
50%
75%
MWA/RMT is a small company and one cannot and should not expect equal
representation of all groups. Nonetheless, these data point towards a preference for
hiring and promoting persons of color in the employee and management ranks.
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2.4.5. Work Rules and Workplace Flexibility
Standard MWA/RMT work rules are an eight-hour day, with an hour lunch and two
15-minute breaks. MWA/RMT does allow a number of employee significant
flexibility – permitting some workers to telecommute and others to work shifted
schedules. Employees are allowed up to three paid hours for doctor appointments.
Those employees that use these flexible arrangements value them. Of course, all
employees are not permitted the same flexibility. Some jobs simply do not permit it
(e.g. production management) and in other cases, managers do not approve of it.
Several employees were unaware of the Company’s policy despite the fact that it is
printed in the MWA/RMT employee manual. As one employee opined, “flex time is
inferred, but not laid out in any type of way.”
Table 8: MWA/RMT Work Hours
FY 2003-04
Number of staff using flexible hours
Number of staff compressed weeks
Number of staff telecommuting*
Number of staff part-time (less than 30 hours)
Total Number of Staff
Percent Using Telecommuting and Flextime
7
0
3
0
36
28%
FY 2004-05
7
0
3
0
39
26%
FY 2005-06
6
0
3
0
40
23%
* One employee telecommuted while on maternity leave during 2 pregnancies in this time frame.
The lack of regular systems and cross training in the Company makes if difficult for
some workers to be absent. As one employee said, “If I’m not in the office, I’m
fearful that things will grind to a standstill.” Efforts to improve business processes at
MWA/RMT have the potential to make flextime possible for employees in several
bottleneck areas, including the production department.
2.4.6. Ergonomics
MWA/RMT provides its employees with the office and computer equipment to
make their jobs as safe as possible. Data entry staff, for example, have the largest
computer monitors at MWA/RMT since they spend more time than any other group
of employees in front of a computer.
There was one computer-related repetitive injury in the past three years, and the
Company moved quickly to address the issue. The purchase of new office
workstations is the perfect time to bring in an ergonomics expert to work with
staff to (a) set up the new offices and (b) train one or two MWA/RMT
employees on basic ergonomic practices. Pure Strategies highly recommends
MWA/RMT take advantage of this opportunity.
2.5. Training & Advancement
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Up until recently, there has been little focus on creating career tracks, position
descriptions, and performance evaluation systems at MWA/RMT. The new CEO
has championed these important human resource practices as a means of helping
him to meet strategic business objectives and to create a workplace that better
develops and promotes the skills and talents of its employees.
Human Resources
Staffing
One of the critical future needs at MWA/RMT is to better staff its human resources
function. MWA’s Human Resources Director is also the Company Accounting
Department Supervisor. The CEO has indicated a desire to better staff this function
in the future. This is an encouraging development.
2.5.1. New Employee Training
Several recent hires complained about the poor quality of MWA/RMT’s new
employee training program. The lack of such a training program is not surprising,
given the relatively stable workforce MWA has enjoyed for years. But as the
organization grows and hires new staff, it’s important to develop a basic
orientation program, especially for those hires new to the direct mail industry.
In interviews, employees suggested:
• A booklet filled with basic direct mail and a glossary of MWA/RMT terms,
materials (e.g., envelope sizes), and business processes (how does the production
department operate);
• More formal mentoring processes for new hires, including new consultants;
• Half-day visits to other departments and cross-training to learn how key
functions in the Company operate; and
• Clearly articulating to managers and staff when persons are called on to provide
mentoring and training to new hires.
2.5.2. Position Descriptions and Internal Advancement
Over the past year, the new CEO and the Human Resources Manager have been
working to establish position descriptions and avenues for internal advancement in
the Company. These are very important efforts and key to improving accountability,
giving employees pathways for advancement, and clarifying expectations the
Company has for job duties and performance.
However, the work in this area remains unfinished, in part because it was only
recently initiated, and because of the resistance among some senior staff members to
embrace the changes. These difficulties impact junior staff who came to MWA
seeking a career path. As two client coordinators noted, the lack in internal
advancement opportunities is “the biggest negative” for them at MWA. No small
business can create career tracks for every employee. Nevertheless, the CEO and
Human Resources Director should continue with reforms to standardize job
descriptions and duties, establish career paths, and evaluate performance.
Linking Compensation
MWA/RMT should align CSR performance to compensation for
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To CSR Performance
management and key staff positions in the organization. The Company should
use its Star Bonus system to reward any employees that contribute significantly to
MWA/RMT’s CSR performance. And to maximize accountability, individual “issue
owners” should have specific CSR goals written into their personal objectives. In
other words, their contribution to company CSR goals is part of their job description
and, therefore, their appraisal. It is only by embedding personal accountability in this
way that MWA/RMT will achieve its CSR strategic goals and specific objectives.
Table 9 lists several key company positions and possible CSR job duties.
Table 9: CSR in Position Descriptions
Position
Chief Executive Officer
RMT President
Client Consultants
Production Manager and
Coordinators
Human Resources
Manager
Possible CSR Job Duties
• Defining company strategy or further integrating CSR
objectives into company policies, products, and operations.
• Developing CSR company leadership positions in the direct
mail industry
• Designing, testing, and marking new environmental and/or
social equity options to clients.
• Setting up systems to evaluate social and environmental
practices of suppliers.
• Designing, testing, and marking new environmental and/or
social equity options to clients.
• Evaluating options for offering high levels of environmental
integrity in mailings.
• Setting up systems to evaluate social and environmental
practices of suppliers.
• Increasing participation in the Company philanthropic
program.
• Working with CEO and managers to place CSR job duties
into employee job descriptions.
Once built into these positions, employee evaluations should evaluate these activities
during performance reviews. MWA/RMT could also establish an internal CSR team
focused internally on company practices to give line employees opportunities to
contribute. Pure Strategies also recommends the Company hold a company-wide full
or half-day design charrette to develop concrete strategies for moving CSR into
company operations. The charrette should be strategic in that it comes on the heels
of streamlining efforts meant to improve MWA/RMT’s business processes and
works in tandem with the other high priority recommendations outlined in this
report. The charrette and team could be established during the next MWA/RMT
fiscal year that begins in March 2007.
2.5.3. Tuition Reimbursement
MWA/RMT provides its employees with opportunities to develop new skills and
abilities by providing educational tuition reimbursement. On average, fewer than
10% of employees have taken advantage of this opportunity over the past few years.
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According to one employee, the policy is not well publicized. The Company should
better publicize this opportunity.
During interviews, several managers complained that the tuition reimbursement
program was being used in some cases by recent hires to gain new skills, after which
they left MWA/RMT for new jobs. As one manager put it, “we’re training people to
go get better jobs.” In reality, the dollar amount spent each year on education
reimbursement for employees is nominal – it’s limited to $250 per year for
employees with a tenure of less than one year, and to $500 for all other employees.
New employees aren’t leaving MWA/RMT because the Company paid for part of
their professional training. They are leaving for other reasons – such as the limited
opportunities for advancement at a small company, returning to school, or finding
work more in line with their personal calling (e.g. teaching). MWA/RMT should not
stray from its education tuition reimbursement policy. Employees, especially junior
ones, value the program too much. If losing workers shortly after they become
trained in their jobs is a problem, MWA/RMT should look deeply at the underlying
causes and not tuition reimbursement.
2.6. External Community and Philanthropic Giving
MWA/RMT gives generously to the local community, setting aside 10% of
profits for donations to deserving non-profits. The Company provides a 300%
match for gifts of $25 or less, and a 200% match for gifts of more than $25, up to a
total per employee that has varied between $500 and $1,000 per year. In addition,
employees can volunteer at non-profits and have their volunteer time paid for at a
rate of $25 per hour. Table 10 lists data about the program for the past three years.
Over the past three years, employee participation has averaged 65%. Two employees
used the paid volunteer hours program in 2004, but none used the program in 2005.
Since the program’s inception, this amount has varied within the range of $500 to
$1000. Nearly half of the total funds allocated to the program are distributed at the
discretion of the founder, typically to local community organizations such as the
Berkeley Public Education Fund and the Berkeley Community Fund.
Table 10: MWA/RMT Philanthropic Giving
No. of Organizations
Percent of Eligible Employees Participating
Volunteer Hours
Total Amount Matching Funds
Total Amount Distributed
2003
56
77%
n/a
$8,013
n/a
2004
65
51%
24
$10,236
n/a
2005
63
68%
0
$21,544
$46,648
According to reports in Newsweek and The Center for Corporate Citizenship at
Boston College, the average U.S. Corporation donates between 1.3% and 2.5% of its
pretax profits each year. MWA/RMT’s practice of giving 10% puts it in the company
of leading CSR firms such as Stonyfield Farm and Tom’s of Maine. The paid
volunteer hours program is especially innovative and a terrific chance for employees
to find ways to channel funds to causes they care about. But despite its leading
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position, MWA/RMT’s philanthropic program could be improved further
through the following strategies:
1. Better publicize the paid volunteer hours policy in the Company. Several
staff felt the low participation rate resulted from poor communication about
the program. Several staff wanted the Company to better publicize this
opportunity but expressed confusion over the rules of the program,
wondering whether volunteers work on company time or on their own time.
2. Find ways to increase staff participation in the donation-matching program.
MWA/RMT should be easily able to reach 100% participation since
donations can be as small as $25.
3. Consider targeting the non-matching funds distributed each year beyond the
Berkeley community. CSR leaders increasing look to link corporate
philanthropic activity to key CSR issues. MWA/RMT could, for example,
donate to organizations such as the National Recycling Coalition (www.nrcrecycle.org), which seeks to improve municipal paper recycling programs, or
to the Living Wage Resource Center (www.livingwagecampaign.org), which
seeks to establish living wage standards in cities across the U.S. Company
employees could also vote to determine how any unused funds are
distributed.
Pure Strategies recommends a review of the program to increase employee
participation and better link company donations to strategic initiatives.
2.7. Ethics
MWA/RMT follows the highest ethical standards for fundraising. The Company
endorses the Association of Direct Response Fundraising Counsel (ADRFCO) Rules
of Business Ethics and Practice and conforms to similar standards produced by the
American Association of Fund-Raising Counsel and the Association of Fundraising
Professionals. MWA/RMT’s transparency and accountability in this area is key to
maintaining trust with clients and donors. The company should continue to remain
vigilant in this area.
2.8. Environmental Practices at MWA/RMT Offices in Berkley, CA
MWA/RMT office employees show deep commitment to environmental practices.
Staff recycle paper, plastic, and other materials. Company policy encourages mass
transit commuting by paying for bus passes. Bike commuters have a secure place to
park their bicycles and intra-company paper purchases are 100% chlorine-free
recycled stock – considered the gold standard for paper procurement.
The Company recently completed an energy audit and is an Association of Bay Area
Governments-certified Green Business. In 2000, the Company hired an independent
auditor to review its environmental practices (Mager 2000). The audit estimated the
Company’s recycling rate at 93% – the highest such rate ever measured by the
auditor. And a confidential survey conducted by the auditor found that 100% of
employees who had provided ideas for improving the environmental performance of
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the Company indicated that their ideas had been implemented. Ninety five percent
felt that management encouraged them to be environmentally responsible in the way
they do their daily business.
The rehab of the Company’s offices provided another opportunity for the Company
to show its environmental commitment. Working within a limited budget, the
Company’s architect has specified a number of green building products, including:
• Benjamin Moore Ecospec, a low-emission, zero-voc interior paint safe for
MWA/RMT workers and the environment;
• Shaw carpet made from 100% Ecosolution premium nylon. Designed for 100%
recycling, Shaw will take the carpet back at the end of its life;
• AllSteel office panels that use fabric panels made from 100% post consumer
recycled plastic soda bottles;
• Glass panels and doors to allow natural daylight to filter into interior office
space;
• Natural linoleum flooring as opposed to PVC flooring commonly used in office
settings; and
• High efficiency kitchen appliances such as an Asko brand dishwasher.
Workers value the Company’s environmental commitment. MWA/RMT should
consider establishing a term-limited committee to examine how the Company
might deepen its environmental practices. This would give employees that care
about the topic an opportunity to evaluate, plan, and implement the next generation
of environmental practices at the firm. For example, one employee suggested the
Company ship only with UPS because the Company has a unionized workforce.
Possible targets include:
1. Reviewing office product purchases to preferentially purchase PVC-free
products;
2. Reducing paper use at the Company – a problem noted by several staff during
interviews;
3. Review the Company’s Green Business Certification status. According to Pamela
J. Evans, Coordinator of the Alameda County Green Business Program, the
Company needs to maintain environmental regulatory compliance and a
minimum number of “beyond compliance” measures set out in their
certification. The certification remains valid for 3 years.
Establishing such a committee is another way to ensure that the Company has a
mechanism to bring new environmental practices into the Company. The firm’s
founder has historically played this role, requesting the 2000 Ecoaudit, the electricity
audit, and pursuing the Green Business certification. As he continues to move away
from the day-to-day management of the Company, MWA/RMT must continue to
build this important function into the DNA of the Company.
MWA Social Assessment
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Prepared by Pure Strategies, Inc.
3. Appendix A: Sample Vendor Code of Conduct
This Code of Vendor Conduct applies to all factories that produce goods for XXX. While XXX
recognizes that there are labor market environments across the U.S., this Code sets forth the basic
requirements that that all factories must meet in order to do business with XXX. The Code also
provides the foundation for XXX ongoing evaluation of its partner’s employment practices. This
Code applies to all Vendor Partner workers, whether employees or temps, full time or part time.
I.
General Principle: Compliance and Access: Factories that produce goods for XXX
shall operate in full compliance with the laws of their respective countries and with all other
applicable laws, rules and regulations.
A. The Partner operates in full compliance with all applicable local, state or federal laws, rules and
regulations, including those relating to including, but not limited to, wages and benefits,
workmen's compensation, working hours, legal status, equal opportunity, and worker health and
safety.
B. The Partner allows XXX and/or any of its representatives or agents unrestricted access to its
facilities and to all relevant records at all times, whether or not notice is provided in advance.
II.
Working Hours & Conditions: In compliance with applicable laws, regulations, codes and
industry standards, Partners are expected to ensure that their workers have safe and healthy working
conditions and reasonable daily and weekly work schedules. Employees should not be required to
work more than the number of hours allowed for regular and overtime work periods under
applicable local, state and federal law.
III.
Non-Discrimination: Factories shall employ workers on the basis of their ability to do the
job, not on the basis of their personal characteristics or beliefs. The partner employs and pays
workers without regard to race, color, gender, physical disability, nationality, religion, age, maternity
or marital status.
IV.
Child Labor: Use of child labor is not permissible. Partners shall not use workers under the
legal age for employment for the type of work being performed in any facility in which the Partner is
doing work for XXX.
V.
Forced and Indentured Labor: Partners shall not utilize prison or forced labor to perform
work or produce goods for XXX, nor should threats of violence, physical punishment, confinement,
or other form of physical, sexual, psychological, or verbal harassment or abuse be used as a method
of discipline or control.
VI.
Wages & Hours: Factories shall set working hours, wages and overtime pay in compliance
with all applicable laws. Workers shall be paid at least the minimum legal wage or a wage that meets
local industry standards, whichever is greater.
VII. Freedom of Association: Workers are free to join associations of their own choosing.
Factories must not interfere with workers who wish to lawfully and peacefully associate, organize or
bargain collectively. The decision whether or not to do so should be made solely by the workers.
MWA Social Assessment
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Prepared by Pure Strategies, Inc.
VIII. Benefits: At a minimum, the contractor provides each employee all legally mandated
benefits.
Monitoring & Enforcement:
As a condition of doing business with XXXX, each and every factory must comply with this Vendor
Partner Code of Conduct. XXX will continue to develop monitoring systems to assess and ensure
compliance. If XXX determines that any factory has violated this Code, XXXX may either terminate
its business relationship or require the partner to implement a corrective action plan. If corrective
action is advised but not taken, XXXX will suspend placement of future orders and may terminate
current production.
Sources:
Gap, Inc. Code of Conduct
Yum Brands Code of Conduct
Green Grocer Code of Conduct
Nike
Procter & Gamble
Business for Social Responsibility
MWA Social Assessment
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Prepared by Pure Strategies, Inc.
4. References
Anderson & Cavanagh. Executive Excess 2005 -- 12th Annual CEO Compensation Survey. Institute
for Policy Studies and United for a Fair Economy. August 2005.
Iowa State University. Definition of Diversity. College of Liberal Arts.
www.las.iastate.edu/diversity/definition.shtml
Kaiser 2005. Employer Health Benefits – 2005 Summary of Findings. Kaiser Family Foundation and - Health Research and Educational Trust. Menlo Park, CA 94025.
http://www.kff.org/insurance/7315/sections/upload/7316.pdf
Kruse and Blasi. 2000. Employee Stock Ownership. Plans in the U.S. 1988-1994, Rutgers University,
2000.
Mager 2000. Eco Audit Report. Major Environmental Solutions. Hatfield, MA. September 2000.
Palazzi and Starcher 2006. Corporate Social Responsibility And Business Success. European Bahá’í
Business Forum. Paris, France. 2006.
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