Overview
The United Nations Global Compact is the world’s largest voluntary corporate citizenship initiative. Companies join the Global Compact because they share the conviction that business practices rooted in universal principles contribute to a more stable and inclusive global market and help build prosperous and thriving societies.
With more than 6,000 participating companies from 135 countries, as well as 2300 nonbusiness participants (as of September 2010), the Global Compact has emerged as a truly global initiative with a strong presence in both North and South. The initiative also enjoys the backing of the United Nations’ member states, as expressed in several General Assembly resolutions recognizing and encouraging the Global Compact’s work.
A unique feature of the Global Compact is that participation not only commits the company as a whole, but specifically its leadership. The personal involvement of a top executive is an important signal to employees and other stakeholders that the company’s corporate citizenship engagement is a strategic and operational priority. A top-down commitment can thus have tremendous influence on the quality of Global Compact implementation.
Global Compact Governance
Following a comprehensive review of the Global Compact's governance during 2004-2005, a new governance framework was adopted in August 2005. In keeping with the Global Compact?s voluntary and network-based character, the governance framework (download the new Global Compact Governance Framework) is light, non-bureaucratic and designed to foster greater involvement in, and ownership of, the initiative by participants and other stakeholders themselves. Governance functions are shared by six entities, each with differentiated tasks within a multi-centric framework:
- Global Compact Leaders Summit
- Local Networks
- Annual Local Networks Forum
- Global Compact Board
- Global Compact Office
- Inter-Agency Team
The Global Compact Board
The Global Compact Board, appointed and chaired by the United Nations Secretary-General, is designed as a multi-stakeholder body, providing ongoing strategic and policy advice for the initiative as a whole and making recommendations to the Global Compact Office, participants and other stakeholders. It comprises four constituency groups - business, civil society, labour and the United Nations.
Board members are champions willing and able to advance the UN Global Compact's mission, acting in a personal, honorary and unpaid capacity. Drawing in particular on the expertise and recommendations of its business members, the Board is also expected to play a role in the implementation of the Global Compact?s integrity measures. In addition to their overall Board responsibilities, the civil society and labour constituency groups are expected to provide close liaison to their communities and share insights into the most recent trends and best practices of corporate citizenship in their respective domains.
The Board is one element of the broader Global Compact Governance Framework, which divides governance functions between six entities, each with differentiated tasks: Global Compact Leaders Summit, Local Networks, Annual Local Networks Forum, Global Compact Board, Global Compact Office, and United Nations Inter-Agency Team.
Engaging in the Global Compact and implementing the principles can help companies to:
- improve organizational integration of environmental, social and governance issues
- address the company’s expanded business opportunities and risks
- improve operational efficiencies
- access the experiences and good practices of peers
- acquire practical know-how
- attract, motivate and retain employees
- increase trust in the company and renew the its license to operate
- improve corporate reputation and brand image
- engage in a proactive and constructive dialogue with civil society and other stakeholders
- strengthen stakeholder relations, both globally and locally
- establish better links with the United Nations
- take a leadership role on critical issues
- network with other organizations
- respond to financial market expectations.