As founder and CEO of FTSE Group, Mark Makepeace created the FTSE4Good Index. It helps investors find companies that meet CSR (corporate social responsibility) criteria.
To earn an FTSE4Good Certificate of Membership, companies have to demonstrate a commitment to “environmental sustainability, developing positive relationships with stakeholders and upholding and supporting human rights.”
Makepeace, left, was kind enough to answer a few questions about anti-bribery compliance and other issues:
Q: How have FTSE4Good’s criteria for inclusion changed in the decade since it was introduced?
A: There have been eight market consultations leading to new criteria for a range of new areas including: human and labor rights, supply chain labor standards criteria, countering bribery, climate change, uranium mining and nuclear power.
Q: What changes do you envision for the next 10 years?
A: A key development this year has been the introduction of the FTSE4Good ESG Ratings, which underscores that there are different degrees of risk and varying levels of company performance on these issues.
Furthermore, different investors see these issues in different ways and as understanding in the investment community grows, so does their need for greater detail. These trends are likely to accelerate going forward … leading to even greater demands for more information.
Q: When assessing the effectiveness of a company’s internal anti-bribery policies, what is FTSE looking for?
A: Transparency International’s Business Principles for Countering Bribery and the U.N. Global Compact 10th Principle were drawn on when developing the criteria. Specifically, a company must have a clear and publicly available policy which prohibits giving and receiving bribes, and restricts facilitation payments and giving or receiving of gifts.
Furthermore, the company needs to demonstrate the systems used to implement the policy such as the staff training, provision of whistle-blowing channels and the compliance mechanisms employed.
We have engaged 140 companies who were not meeting the criteria to explain the approach and the standards. Most worked with us and have now met the standards; around 30 have not and have been deleted from the index.
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Benjamin Kessler is an editor and writer for Ethics 360. He can be contacted here.
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[Editor’s note: This post is part of our series profiling global compliance leaders. Most appear on our sponsor Ethisphere’s annual list of the 100 Most Influential People in Business Ethics. Readers are also welcome to suggest others they’d like to see profiled in this series.]
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