GUIDEBOOK CODE OF CONDUCT MANAGEMENT SYSTEMS

Transcription

1 GUIDEBOOK CODE OF CONDUCT MANAGEMENT SYSTEMS 2005 Levi Strauss & Co. Page 1 of 57

2 Table of content SECTION I: INTRODUCTION Introduction How to use this Guidebook... 3 SECTION II: THE MANAGEMENT SYSTEM FRAMEWORK The Management Systems Framework The Sections of a Management Systems Framework The Elements of a Management System... 5 SECTION III: BENEFITS AND KEY SUCCESS FACTORS OF A MANAGEMENT SYSTEM Benefits of a MS Key Success Factors... 9 SECTION IV: PHASES OF MS IMPLEMENTATION PLAN Phase I: Policy development and management commitment Phase 2: Planning and information management Phase 3: MS implementation, training and manual preparation Phase 4: Implement continuous improvement of MS Phase 4: MS Monitoring and Follow-up (LS&Co Requirement) SECTION V: MS IMPLEMENTATION PLAN Phase 1 - Policy Development and Management Commitment Checklists and Tools Phase 2 - Planning and Information Management Checklist and Tools MS Tool 1: Registry of Stakeholders and Their Expectations MS Tool 2: Code of conduct Management Programs - Example of MS Tool MS Tool 3: Registry of Code of Conduct Management Programs Phase 3 - MS implementation, training and manual preparation Checklists and Tools MS Tool 4: Example of Procedures for Operational Control MS Tool 5: Measuring and Monitoring Phase 4 - Implement continuous improvement of MS Checklists and Tools Phase 5 - MS Monitoring and Follow-up Checklists and Tools SECTION VI: TOOLS FOR MS IMPLEMENTATION Management tools How and when to use the management tools ANNEX 1 Bar chart ANNEX 2 Benchmarking ANNEX 3 Brainstorming ANNEX 4 Checklist ANNEX 5 Control Chart ANNEX 6 Flowchart ANNEX 7 Indicator Matrix ANNEX 8 Pareto Analysis ANNEX 9 Prioritization Matrix ANNEX 10 SWOT analysis ANNEX 11 Fishbone/Ishikawa Diagram ANNEX 12 5W2Hs for Problem Analysis and Planning SECTION VII: TEMPLATES FOR MS IMPLEMENTATION Levi Strauss & Co. Page 2 of 57

3 SECTION I: INTRODUCTION 1. Introduction The Code of Conduct Management Systems (CoCMS) Guidebook for improving Code of Conduct performance at Levi Strauss & Co main suppliers was prepared in order to provide a tool that would guide suppliers through the CoCMS implementation process with a minimum of outside support. The multi-step process, tools and template documents contained in this Guidebook will be tested and refined through a Pilot Project during It is expected that, by using the tools and templates presented in this guidebook, a LS&Co supplier can implement a CoCMS without outside assistance. It is, however, recommended that any supplier interested in management systems seek out as much relevant information on the subject as possible. 2. How to use this Guidebook It is recommended that the reader explores the main text in order to develop a general understanding of a management systems framework and their application to manage Code of Conduct issues. The reader who is unfamiliar with CoC management systems should start at Section 2. The reader who is familiar with management systems, but not their application in managing Code of Conduct issues, should begin at Section Levi Strauss & Co. Page 3 of 57

4 SECTION II: THE MANAGEMENT SYSTEM FRAMEWORK 1. The Management Systems Framework A Management System (MS) is a systematic approach for incorporating code of conduct goals and priorities (such as labour rights and regulatory compliance) into routine operations. While some sort of system is inherent to any organization that must meet labour rights and environmental requirements as part of daily operations, it is generally accepted as a valuable step to formalize the approach by documenting it. Not only does documentation of the system ensure consistency over time and across employees, there is a growing body of evidence indicating that there is considerable value in defining a systematic approach to managing code of conduct issues. We define a management system approach as a set of processes and practices that enable an organization to reduce its code of conduct impacts and risk, and meet code of conduct requirements. This focus on processes and practices is common to all MSs, which are generally founded on the Plan, Do Check, Review cycle of continuous improvement (see Figure 1). Management Systems 2. The Sections of a Management Systems Framework A Management System (MS) implies the same cycle of Plan, Do, Check, Review.. The MS framework we are proposing consists of five sections, Policy, Planning, Implementation & Operations, Monitoring and Corrective Action, and Management Review, as presented in Figure 2 below Levi Strauss & Co. Page 4 of 57

5 Management Commitment Initial Review Policy Management Review and Follow-up Planning Legal & other requirements Objectives and targets Management programs Monitoring & Corrective action Monitoring & measurement Non-conformance, corrective & preventive action Audits Implementation & Operation Roles & responsibility Training, awareness & competence Communication Documentation Procedures Figure 2: The Management Systems Framework The five major sections shown in Figure 2 are considered to be the basis of a Management Systems Framework. And they are described as follows: Policy Establishes and communicates an organization s position and commitment as it relates to code of conduct issues. Planning Identifies code of conduct issues and requirements, and defines the initiatives and resources needed to achieve the policy and business goals. Implementation & Operations Describes the procedures, programs and responsibilities necessary to implement the key initiatives to achieve the goals. Monitoring and Corrective Action Regularly monitors and assesses the effectiveness of code of conduct management activities and programs; and compliance to code of conduct requirements. Management Review and Follow-up High-level evaluation of the management system as a whole to determine its overall effectiveness in terms of driving continual improvement and achieving business goals. 3. The Elements of a Management System The breakdown of the five major sections presented above is described as follows: 2005 Levi Strauss & Co. Page 5 of 57

6 POLICY Policy The policy drives the commitment of the supplier to maintain and potentially improve its code of conduct performance. By documenting and publicizing the policy, the supplier demonstrates a commitment to the management of code of conduct issues from the highest management levels. PLANNING Legal and Other Requirements The legal and other requirements are those requirements the supplier is expected to comply with on a continual basis. Besides legal requirements, these could be the expectations of the local community or other stakeholders (e.g. Brands). Objectives and Targets Objectives and targets form the goals of a supplier s MS. Analysing the impacts, risks and requirements the supplier develops the goals for improving its code of conduct performance regarding its activities. Management Programs These programs define the plans and activities a supplier will use to achieve its objectives and targets. IMPLEMENTATION & OPERATION Roles and Responsibility Much like an organizational chart, the structure and responsibility of the supplier defines the authority structure in place. The definition of responsibility takes it another step further, defining who is responsible for what within the supplier s operations. Training, Awareness & Competence This element, one of the most important in a MS, defines what training and minimum competence levels are required to ensure that code of conduct risks and requirements are managed appropriately, who receives the training, and how often. Communications The communications element of a MS defines how internal and external communications with respect to code of conduct requirements are handled. Documentation The documentation element defines the structure of the MS itself. This is typically only needed if a full MS is implemented. The documentation has to be controlled and maintained. All employees need to have access to all relevant documents and be working with the same set of documents. The MS also needs to handle and control records related to the code of conduct requirements. Procedures The operational control element focuses on the level of control that the supplier has in managing code of conduct risks. It determines the operating procedures and working instructions. This MS element also outlines the procedures by which the supplier responds to emergencies, and the maintenance of a minimum level of preparedness. MONITORING & CORRECTIVE ACTION Monitoring and Measurement This element describes how the supplier monitors its code of conduct performance, what procedures are used to measure the appropriate data sources, which indicators are in place and how often they are measured. LS&Co will assess their suppliers every year through the TOE program Levi Strauss & Co. Page 6 of 57

7 Nonconformance & Corrective and Preventative Action This MS element outlines how the contractor investigates and corrects non-conformances. During the assessment, LS&Co will monitor against code of conduct requirements and analyse non-conformities. A corrective action plan (CAP) will be delivered to the company management. MS [internal] Audit The auditing element of the MS outlines how the supplier audits its code of conduct performance. MANAGEMENT REVIEW AND FOLLOW-UP Management Review This element of the MS describes how the supplier coordinates performance reviews by top management and drives the process of continual improvement. Follow-up This element is particular to LS&Co and describes how LS&Co will followup on the Corrective Action Plan (CAP) agreed by the supplier Levi Strauss & Co. Page 7 of 57

8 SECTION III: BENEFITS AND KEY SUCCESS FACTORS OF A MANAGEMENT SYSTEM 1. Benefits of a MS Several implementation projects have been performed determining the benefits of a MS approach, especially in the area of quality and environment. The analysis indicates that the systems approach to managing code of conduct issues generates a deep, cultural shift in how the organization addresses these issues. Every employee (worker, supervisor, and management) must incorporate code of conduct concerns into their daily job functions. The benefits of implementing an MS range from improved compliance with code of conduct regulations (and often a reduction in fines) to increased management efficiency, and even a reduction in code of conduct non-compliances. The systematic MS approach to the daily management of code of conduct objectives leads to benefits that can only be created by an integrated effort across the entire organization, and are typically difficult to foresee prior to the implementation of the MS. A particularly useful element of a MS is the incorporation of internal & external stakeholder requirements and external communications. The increase in transparency and the ability to respond to the needs of main stakeholders improves relationships and trust. The main benefits that can be listed are the following: Improving Code of Conduct performance Ensuring legislative and standard compliance Reducing Code of Conduct risk Meeting Brand supply chain requirements Capturing institutional knowledge; Streamlining processes; Improving emergency response procedures; and Increasing awareness and participation. Each of these benefits is discussed below in more detail. Improve Code of Conduct performance Using a management system framework in order to manage code of conduct issues, will allow the supplier to have control over their code of conduct performance. Setting clear policies and developing sound objectives and targets will allow the supplier to focus on goals and use resources more efficiently. Ensuring legislative and standard compliance Significant savings are observed through the avoidance of fines and costs that could have happened if the MS is not been in place. Specific cost savings result through reducing incidents due to improper maintenance, reducing the need for on-the-job training, and retaining and communicating of critical information over time. Also we can reach reduction in regulatory fines due to increased employee awareness from MS training programs. Reducing Code of Conduct risk Code of conduct risk is a hidden risk for many companies. By undertaking risk assessments as part of the code of conduct management process it is possible to reduce the risk of the occurrence of events that could have adverse code of conduct consequences. Banks, insurance companies and investors all base their decisions on an assessment of risk. The higher the risk, the less likely a bank is to lend, the less likely investors are to invest and the higher insurance premiums are likely to be Levi Strauss & Co. Page 8 of 57

9 Meeting Brand supply chain requirements An increasing number of large organizations are requiring their suppliers to demonstrate sound code of conduct management and are prepared to delist those that fail to do so. Having a code of conduct policy is not considered sufficient proof of sound management and evidence is required that a company is taking action to meet the commitments set out in their policies. Hence, undertaking effective code of conduct management will increasingly be necessary to gain or maintain supplier status with large organizations. Capturing institutional knowledge A significant benefit recognized from the MS implementation process is to capture the institutional knowledge contained in the heads of employees. By consulting with employees and documenting the how-to of routine operations, the time required training new staff decreases, and the supplier is protected from the loss of critical operating knowledge when employees retire and/or leave the company. Streamlining processes By analysing the processes used to complete routine tasks, the supplier is able to reduce the number of steps involved in the process of Code of Conduct performance and compliance, saving time, energy and money. Further, the analysis process allows the supplier to standardize the way routine tasks are performed, improving processes and creating additional savings. The MS implementation process also forces companies to analyse and document training, compliance and maintenance schedules, which helps them to stay current with these items, plan staff schedules more effectively, and avoid schedule conflicts with other company activities. Improved emergency response procedures Suppliers can benefit from making improvements to their emergency preparedness and response plans that come about as a function of the MS implementation process. Increased awareness and participation Suppliers can increase awareness of code of conduct issues and activities that have the potential to impact the employees, environment, communities and activities. 2. Key Success Factors The experience to date suggests that while there are many operations/facility-specific factors that influence the success of MS development and implementation, there are some key factors in determining success that apply to almost all operations/facilities. Some of these factors include: Senior management commitment; Assign team and dedicated responsible person; Communication of commitment to improve code of conduct performance; Integration into existing supplier systems; Recognition that a MS is a continuous commitment that does not end with implementation; Understanding of resource requirements for MS development. These key success factors are described below in more detail. Senior management commitment The commitment of senior managers to the development and implementation of a MS is perhaps the most important factor in determining the overall success of an MS. Without high-level commitment, the efforts of the MS team will be constrained to the point of probable failure. This 2005 Levi Strauss & Co. Page 9 of 57

10 commitment must be based upon an understanding of the business value of an effective MS and the importance of integrating a MS into day-to-day operations. To be valuable, this commitment must also be effectively communicated so that the MS implementation team and other employees understand what is entailed by senior management commitment. Senior management support should go beyond initial statements and should include identifiable activities. Senior management can demonstrate its support by personally participating in training sessions, actively monitoring the MS implementation process, ensuring that adequate resources are available, and participating in the establishment of MS goals for the organization and for individuals. Assign team and dedicate a responsible person A team should participate in the implementation to balance workloads and to ensure continued movement when other commitments demand an employee s time. A responsible person should outline the schedule and hold the team accountable to its stated milestones and deliverables. Communication of commitment to improve code of conduct performance Internal communication will create awareness within the supplier. In many cases employees are interested to work on procedures in their area, and have given considerable thought to the development of procedures prior to the MS implementation. Integration into existing systems Most suppliers already have many of the elements needed to meet the requirements of a MS framework, although these frequently require additional development and/or documentation. Therefore, it is important to identify existing operational practices or systems in the company that the MS element can integrate, and focus on enhancing these elements rather than recreating them. It is also important to note that the MS related to code of conduct issues can be integrated into existing management systems within the company and not the reverse. Fundamental to the systems approach of code of conduct management systems is the integration of code of conduct concerns into the daily activities of employees throughout the company. MS specific activities that need to be developed, such as the annual management review and evaluation of objectives, targets and performance improvement programs, should be integrated into the annual budgeting and planning cycle that already exists within the company. Similarly, training programs identified by the MS can be integrated into existing training programs already coordinated by the human resources group. Need for on-going commitment The strongest benefits of MS implementation are typically achieved through the continual improvement of the MS elements. An effective MS should be predicated upon the principle of continuous improvement, which is inherently an on-going process. Completion of the MS involves establishing a system that provides for continuous improvement in code of conduct management, but many of the benefits that result from continuous improvement often occur after the system is implemented. The completion of a MS implementation is an important milestone, but it is not the end of the process. Understanding of resource requirements While a well-developed MS should save money, minimize risk and improve overall code of conduct performance in the long run, requires a significant commitment of resources during the development stage. The initial development process is an investment made to generate medium term and long-term benefits Levi Strauss & Co. Page 10 of 57

11 SECTION IV: PHASES OF MS IMPLEMENTATION PLAN This section will provide you the tools that will be useful in the implementation of a MS in the company operations. The Four Phase MS Implementation Plan The implementation plan is organized around four key phases: Phase 1: Policy development and management commitment Phase 2: Planning and information management Phase 3: MS implementation, training and manual preparation Phase 4: Initiate continuous improvement of MS Phase 5: MS Monitoring and Follow-up Each phase in the plan is broken up into a series of tasks that guide companies and/or organisations to develop the various elements of the MS in a sequential and systematic manner. Each task is described briefly for the reader in this section. Phase I: Policy development and management commitment Task 1: Secure management commitment, resources & communication This initial task initiates the MS process by generating buy-in from top management, identifying the scope of the MS and securing the resources required to complete it. By communicating this commitment, the entire company is notified and additional momentum is generated. Task 2: Assign and train core team Identify a core team and assign responsibilities for MS implementation. Training the core team is the official MS kick-off, and ensures that the entire team understands the level of effort and timeline involved in the implementation process, as well as the potential benefits they should expect to see as a result of their work. Task 3: Define the MS scope Definition of the MS scope refines the MS implementation process agreed upon by top management and identifies the specific operations that take place within that scope. The core team will focus primarily on these activities during the implementation process. Task 4: Perform a gap assessment Using Diagnostic Tool (Annex X) This task is important to the MS process in that the core team will identify the elements of the MS that already exist in the company. By identifying these items, the core team identifies the existing systems in the organization that the MS will integrate into, and identifies requirement gaps. Task 5: Develop/review code of conduct policy The Code of Conduct policy forms the core of the MS by communicating the company s commitment to code of conduct issues. It also demonstrates management commitment to the MS, further aiding the core team in getting support within the organization Levi Strauss & Co. Page 11 of 57

12 Task 6: Develop an implementation plan and schedule The final implementation plan and schedule outlines the phases and milestones the core team can expect, and gives other members of the company an idea of what to expect in the coming months. Phase 2: Planning and information management Task 7: Identify key stakeholders and legal and other requirements. Identify LS&Co code of conduct requirements (reference: Global Sourcing and Operating Guidelines) Task 8: Perform aspects and impacts analysis This is one of the most difficult and resource intensive steps of a management system implementation process. The aspects and impacts analysis involves identifying which of the activities performed within the MS scope have the potential to interact with code of conduct issues, and the potential impacts of those interactions. LS&Co has already performed this task and while analyzing the aspects and impacts of apparel manufacturing activities has developed the Global Sourcing and Operating Guidelines. Task 9: Develop objectives and targets Objectives and targets are measurable goals set by the core team for creating specific benefits with the MS and exerting a greater level of management control over significant aspects of the company operations. Develop indicators to measure and track objectives and targets. Task 10: Develop/revise code of conduct management programs This task allows the core team to supplement existing code of conduct programs already in place within the company and add new programs where appropriate for achieving the stated objectives and targets. The information gained in the gap analysis is particularly important in this task as the core team will look to existing programs first before seeking to implement new ones. Phase 3: MS implementation, training and manual preparation Task 11: Develop procedures for operational control Again drawing upon the information generated in the gap analysis, the core team identifies what additional procedures will be required to ensure an appropriate level of operational control based on the potential impacts of the activities in relation to code of conduct standards. Task 12: Develop monitoring and measurement procedures Monitoring and measurement procedures allow the company to track the progress of the various MS programs in achieving their stated objectives and targets. There can be no confusion of success when the objectives and targets are clear and the method and frequency of measurement has been clearly identified. LS&Co has developed key performance indicators for suppliers to report on. This list of indicators has to be included company activities and monitoring and measurement procedures. Task 13: Develop MS auditing procedures The continual improvement of the MS is dependant upon the periodic reviews (or audits) of the performance of the system. By clearly defining these procedures up front, the core team ensures that future MS participants will continue to review the MS using the same process Levi Strauss & Co. Page 12 of 57

13 Task 14: Develop procedures for implementing corrective and preventive actions Similar to task 12 above, by clearly identifying corrective action procedures, the core team ensures that all MS participants will act in the same way to resolve issues that are discovered either as a part of routine operations or in an MS audit, and that the lessons learned will be incorporated into the MS. Task 15: Develop emergency preparedness and response procedures Emergency preparedness and response plans are the most frequently encountered existing items in MS development. A review of these materials allows the core team to ensure that they are clear, complete, and effective. Task 16: Develop management review procedure The management review procedure outlines the process by which top management will review the effectiveness of the MS and make adjustments. This is typically performed annually. Task 17: Assemble existing documentation If a MS manual is required, the core team must gather the documents that have been generated to date and determine if they are sufficient. Frequently, a small amount of additional documentation is required to draw the MS documents together into a complete system. Task 18: Develop any necessary additional documentation (Self-explanatory) Task 19: Assemble MS manual By assembling a MS manual, the core team prepares for the process of rolling the MS out into the organization. Task 20: Develop training modules While this task may have been initiated earlier in the implementation process, the core team will want to complete their activities by preparing a general training module that introduces new and existing employees to the MS. Additional training modules may be developed in this task as well, such as procedural training. Task 21: Deliver training to staff (Self-explanatory) Task 22: Implement MS In this task, the MS is announced as in effect and the core team has completed its task. This task is frequently accompanied by a formal announcement by top management and public congratulation of the core team. Phase 4: Implement continuous improvement of MS Task 23: Perform self-audit of the MS This is the final step to completing the MS. A thorough self-audit (using the Diagnostic Tool) of the MS identifies any gaps remaining in the system, and initiates the process of continual improvement of the MS. Task 24: Perform first MS management review cycle 2005 Levi Strauss & Co. Page 13 of 57

14 Using the results of the self-audit of the MS, the next task is to provide a complete update to management on the MS. This initiates the cycle of continuous improvement of the MS and results in the development of an annual plan. Phase 4: MS Monitoring and Follow-up (LS&Co Requirement) Task 25: Report on indicators LS&Co will require suppliers to report on a set of indicators. Task 26: LS&Co TOE assessment LS&Co will assess their suppliers every year through the TOE program Task 27: MS Follow-up This element is particular to LS&Co and includes LS&Co follow-up on the Corrective Action Plan (CAP) agreed with the supplier Levi Strauss & Co. Page 14 of 57

15 SECTION V: MS IMPLEMENTATION PLAN This section will guide you through the MS implementation process. The 5 implementation phases are divided by task and each task has information on the input, output, tools and points required to be fulfilled. Supplier should examine the steps and tools described in the next section, to determine the tools they need and the ones that are more appropriate for their activities. The Annexes provide many useful tools and evaluation processes for companies Levi Strauss & Co. Page 15 of 57

16 Phase 1 - Policy Development and Management Commitment Checklists and Tools Task 1: Secure Management Commitment, Resources & Publicize Input: Output: Tools: None this is initial task Memorandum describing management commitment to MS development and formally designating MS Implementation Leader, and team, description of responsibilities, the expected MS scope and commitment of resources. None Question Identify managers within the company who need to approve of MS development in order to ensure resource allocation and implementation Provide those managers with an overview of the MS and business benefits associated with implementation Discuss what the scope will be for the MS. The MS scope will be finalized in Task 3, however it is important to identify this in a general sense as early as possible so that individuals expectations can be managed Discuss resource needs and the schedule for implementation. This needs to be a frank and open discussion about the fact that MS implementation is going to be competing for people s time with their other responsibilities and how that can best be managed Get explicit and formal approval for MS development. The approval from the company manager should state the specific business rationale for development of the MS Explicitly designate the individual who will have primary responsibility to ensure implementation of the MS. It is critical that this person be personally committed and enthusiastic about MS development and has the ability to communicate well with others who will be involved in the effort Review with senior management the level of resource commitment needed from other staff who will be involved in MS implementation Identify approximately 2-8 individuals who will make up the MS Core Team, depending on the size of the operations. This team will provide the bulk of support for MS development. This team should be identified by the Team Leader and confirmed by senior management. Discuss the time commitments needed from the Core Team members. Identify potential conflicts between MS implementation and other responsibilities Resolve and identify conflicts with senior management to ensure that the necessary arrangements are made to allow all of the Team members to commit the time necessary for MS implementation Meet with key staff throughout the organization to ensure that they know of management s commitment to proceed with MS development Publicize the MS commitment through newsletters, bulletin boards, discussion at meetings and other forums Completed? Suggestion: The MS Team should include staff from a cross-section of the company, including, at a minimum, staff from the human resources and operational departments. Personnel from other departments such as maintenance, purchasing and marketing departments should also be involved Levi Strauss & Co. Page 16 of 57

17 Task 2: Assign and Train Core Team Input: Output: Tools: Training requirements Documentation of training, including listing of personnel attending each training session, agendas for each training session and any training materials utilized. None Question Train the Core Team on MS requirements, implementation, and business benefits associated with MS implementation, strategic code of conduct management, and management commitment to MS implementation. This training should stress the implementation process and understate the specific MS requirements since the Core Team needs to be able to understand and visualize how the MS will be developed over time. Identify any additional staff that may require training. Completed? Suggestion: None Task 3: Define the MS Scope Input: Output: Tools: Guidance from senior management from Task 1 and in-depth knowledge of the company s operations from the MS Core Team Written description of MS scope None Question Develop the MS scope If issues regarding the MS scope become complex (such as whether or not to include (contractors) an acceptable option is to create a simple boundary initially, with the intent to re-visit the boundary periodically and make a decision about whether to add potentially complicated factors. Completed? Suggestion: None 2005 Levi Strauss & Co. Page 17 of 57

18 Task 4: Perform a Gap Assessment Input: Output: Tools: Any documentation of existing energy and environmental management practices Documentation of results of gap assessment graphs of Diagnostic tool. In many cases the results are documented as part of the implementation plan developed in Task 5, along with their order of priority to be addressed. Diagnostic Tool Question Conduct a gap assessment of current practices and procedures against the requirements for a MS and for Code of conduct requirements. During this analysis it is helpful to identify existing programs and procedures, which can be used in the MS. Existing programs or procedures may require some modification to be consistent with the MS requirements. Review gap assessment results with MS Core Team. Note that the gap assessment results will not tell you directly how much or exactly what work needs to get done to complete your MS. It will, however, provide a sense of what existing programs, procedures and documentation can be utilized and where the most effort will have to be spent in MS development Completed? Suggestion: None Task 5: Develop Code of conduct Policy Input: Existing code of conduct policy (if any) and direction from senior management from Task 1 Output: Written Code of conduct policy, signed by appropriate senior management. Tools: Policy section in Management System Template TOE Guidebook Global Sourcing and Operating Guidelines Question Develop or revise a code of conduct policy using policy requirements identified in LS&Co Global Sourcing and Operating Guidelines and TOE Guidebook. Time should be spent in awareness building with key operations Based upon their feedback, revise and finalize code of conduct Policy Completed? Suggestion: None Policy 2005 Levi Strauss & Co. Page 18 of 57

19 Task 6: Develop and implementation plan and schedule Input: Gap Assessment results from Task 4 Output: Implementation schedule identifying steps that must be accomplished, target due dates and persons responsible for their implementation. A Gantt chart is often helpful to clearly outline the tasks, due dates, and meeting dates. Tools: Diagnostic Tool graphics Question Determine which MS requirements need further development or refinement Identify resource needs for completing all MS requirements Assign lead staff person for each step or each component of the MS to be further developed or refined Identify key communication ( s, intranet, bulletin boards ) and information management approaches with responsible individuals Develop a schedule for completing the remaining steps and all MS requirements, including follow-on activities, such as MS manual development, and training We recommend a weekly meeting of the MS team to discuss actions, obstacles that may affect the ability of the team to meet deadlines, and actions to over come those obstacles Completed? Suggestion: None 2005 Levi Strauss & Co. Page 19 of 57

20 Phase 2 - Planning and Information Management Checklist and Tools Task 7: Identify Key Stakeholders and Requirements Input: MS scope from Task 3 and Code of conduct Policy from Task 5. Output: Listing (Register) of stakeholders and their key Code of conduct requirements, and registration of regulatory requirements. Tools: MS Tool 1: Registry of Stakeholders and Their Expectations Question Identify key stakeholders, based on the scope of the MS and the knowledge of the company practices and policies. In developing the list of key stakeholders, consider internal groups (e.g. employees, specific departments), and external groups (e.g. unions, communities, and regulators). Identify key Code of conduct requirements of each stakeholder group. For instance, regulators would be interested in compliance-related information Identifying concerns for a variety of stakeholders does not mean that they all need to be considered equally within the MS. Obviously, compliance with the requirements established by a regulatory body need to be considered essentially without question, whereas issues of concern to another stakeholder group, like the local community, would be considered along with other factors in determining how to respond As part of this process, assemble a list of legal or regulatory requirements associated with Code of conduct management, since these are requirements of a key stakeholder Completed? Suggestion: None 2005 Levi Strauss & Co. Page 20 of 57

21 MS Tool 1: Registry of Stakeholders and Their Expectations Company: Prepared by: Date: Page of Name of Stakeholder Group Description of Stakeholder Group Description of Code of Conduct Expectations Is it a Regulatory or Other Requirement? Note: An expectation is a Regulatory or Other Requirement if: it is a regulatory requirement or required under internal Policy or a Contractual Agreement. A list of citations should be developed for all regulatory requirements so they can be easily tracked for changes in the future Levi Strauss & Co. Page 21 of 57

22 Task 8: Perform Aspects and Impacts Analysis Input: Global Sourcing and Operating Guidelines. Output: Documentation of aspects and impacts analysis. Tools: Global Sourcing and Operating Guidelines TOE Guidebook Question Determine activities, products and services that can impact LS&Co Global Sourcing and Operating Guidelines Analyse the impact of Code of conduct aspects in activities and products Completed? Suggestion: The aspect and impact analysis, are critical elements of MS development because significant aspects and impacts must be considered in the determination of objectives and targets (Task 9), which in-turn lead to programs (Task 10) and procedures (Task 11). The scope of programs and procedures required in the MS is determined in the aspects and impacts analysis process. Note that this process tends to be one of the most resource-intensive components of the entire MS development. This process has already been analysed extensively by LS&Co and it is presented in the Global Sourcing and Operating Guidelines and the TOE Guidebook. Task 9: Develop Objectives and Targets Input: Global Sourcing and Operating Guidelines. TOE Guidebook Output: Listing of objectives and targets Tools: None Question Consider all Code of conduct aspects. When objectives and targets are developed, one aspect may require one or more objectives to be managed appropriately, or there may be an objective that covers several aspects. Ensure that all targets are measurable. Completed? Suggestion: None 2005 Levi Strauss & Co. Page 22 of 57

23 Task 10: Develop / Revise Code of Conduct Management Programs Input: Listing of objectives and targets from Task 9 Output: Documentation of environmental management programs that address all objective and targets established. Tools: MS Tool 2: Code of conduct Management Programs MS Tool 3: Register of Code of conduct Management Programs Question Establish a Code of conduct management program for each objective and target established in Task 9. One program may address more than one objective or target. Completed? Suggestion: None 2005 Levi Strauss & Co. Page 23 of 57

24 MS Tool 2: Code of conduct Management Programs - Example of MS Tool 2 Subject: Document No: Page: 1 Facility: Responsible Person: Start Date: of: Goal Statement: (Describe how this program meets the commitment made in the Energy and Environmental Policy) Objective: Target and Completion Date: Strategy: Tasks for Achieving Objective and Target: Metrics and Measurement: Importance relative to Other Environmental Programs: Comments / Process Towards Completion: 2005 Levi Strauss & Co. Page 24 of 57

25 MS Tool 3: Registry of Code of Conduct Management Programs Company: Prepared by: Date: Page of Code of Conduct MS Requirement Activity/Function Objective Target Operational Control (Procedures) Note: None Levi Strauss & Co. Page 25 of 57

26 Phase 3 - MS implementation, training and manual preparation Checklists and Tools Task 11: Develop Procedures for Operational Control Input: Description of code of conduct management programs from Task 10 Output: Written procedures Tools: MS Tool 4: Procedures for Operational Control Question For each Management Program established in Task 10, procedures need to be developed that describe how each program will be implemented, and who has responsibility for implementation. Completed? Suggestion: None 2005 Levi Strauss & Co. Page 26 of 57

27 MS Tool 4: Example of Procedures for Operational Control 2005 Levi Strauss & Co. Page 27 of 57

28 Task 12: Develop Monitoring and Measurement Procedures Input: Output: Tools: Significant aspects and impacts (Task 8), objectives and targets (Task 9) and key stakeholder & regulatory requirements (Task 7). Written procedures for monitoring and measurement. (When monitoring and measurement is actually performed, the outputs will include the measurement results). Include LS&Co indicators and TOE program. MS Tool 5: Measuring and Monitoring Question Develop procedures, as needed, for the main areas in which monitoring and measurement are required. The procedures should: Ensure that objectives and targets are being met Respond to stakeholder demands, to the extent these are not reflected in the objectives and targets Meet regulatory and legal requirements regarding performance tracking, and reporting requirements. Address the needs for operational control of equipment and processes Respond to established key performance indicators Completed? The procedures should specify: Means by which the appropriate data will be gathered. How that data will be transferred to the other processes in which it will be used, such as corrective and preventive action and management review. Suggestion: None 2005 Levi Strauss & Co. Page 28 of 57

29 MS Tool 5: Measuring and Monitoring Table 1. Linking Operations, Aspects, Controls and Monitoring Code of Conduct MS Requirement Activity/Function Key Performance Indicators Associated limits Associated Monitoring or Measurement Sheets 2005 Levi Strauss & Co. Page 29 of 57

30 Task 12: Develop MS Auditing Procedures Input: Output: Tools: MS Scope (Task 3), Policy Statement (Task 5), Management Programs (Task 10), Procedures for Operational Control (Task 11), and Monitoring and Measurement Procedures (Task 12). Written procedures for auditing None Question Develop internal audit procedures goals which: Ensure that the procedures incorporated into the MS are being followed; and Determine if the MS itself requires revision or restructuring. Completed? The auditing procedures must address the following: The frequency of auditing; What information will be gathered; Who will perform the audits; and How the audit results will be recorded and communicated. The MS internal audit procedure should include or provide for the following: Review of the monitoring and measurement to determine, among other things, that objectives and targets are being met; and Discussions with personnel to determine if they know and follow MS procedures Review of the regulatory compliance auditing procedure to ensure that it is assessing the status of regulatory compliance, identifying corrective and preventive actions and that those actions are being completed. The outputs from the audit go into two separate processes: Management Review (where senior managers can review and approve any changes to the MS itself) and Corrective and Preventive Action (where corrections are made to address non-conformances and to avoid future non-conformances). Suggestion: None _ 2005 Levi Strauss & Co. Page 30 of 57

31 Task 14: Develop Procedures for Implementing Preventive Actions Input: Procedures for Monitoring and Measurement and MS Auditing (Task 12) Output: Written procedures for corrective and preventive actions. (When those procedures are actually implemented, the outputs will be documentation of non-conformances and the resulting corrective and preventive actions). Tools: None Question Develop procedures for implementing corrective and preventive action. The procedures should: Define responsibility for collecting the results of monitoring, measurement and auditing, and using them to determine what, if any, corrective and preventive actions need to be implemented. Specify how corrective and preventive actions will be taken when a nonconformance is discovered by the monitoring or auditing procedures Specify how corrective and preventive actions will be documented, so that changes to the MS (i.e. continual improvement) can be demonstrated. Completed? Suggestion: None Task 15: Develop Emergency Preparedness and Response Procedures Input: Output: Tools: Existing emergency preparedness and response procedures Written emergency preparedness and response procedures. None Question The emergency preparedness and response procedures should include: A process for identifying potential accidents or emergency situations. For each identified potential emergency or accident, the measures to reduce the risk of occurrence as well as what actions would be taken if the emergency or accident were to take place. How employees will be trained in these procedures and how drills will be conducted to test the procedures. Completed? Suggestion: None 2005 Levi Strauss & Co. Page 31 of 57

32 Task 16: Development Management Review Procedure Input: Output: Tools: Code of conduct Policy (Task 5), Objectives and Targets (Task 9), and MS Auditing and Corrective/ Preventive Action procedures (Task 14). Written procedures for management review and follow-up None Question Develop Management Review Procedures. The purpose of the Management Review is to close the loop in the continual improvement process by ensuring that all components of the MS and its effectiveness are reviewed periodically by the senior management for the company. Management should review the suitability, adequacy and effectiveness of the MS because it represents the framework used by the company to control code of conduct risks that could potentially prevent the compliance with LS&Co Global Sourcing and Operating Guidelines. The Management Review Procedure should include the following: A description of the scope of the review, which must include consideration of any necessary changes to policy, objectives and targets and programs and procedures. A description of who is going to conduct the review, how often it will be conducted, what inputs will be reviewed, and how the results of the review will be acted upon. A listing of inputs into the review including results of any performance against objectives and targets, MS audits, compliance audits, reports on the status of corrective and preventive actions and concerns raised by relevant interested parties. A specific description of how the results of the MS auditing will be incorporated. A written report (minutes which includes the results of the management review should be completed). Coordinate with LS&Co the follow-up on Corrective Action Plan (CAP) as described in the CAP. Completed? Suggestion: None 2005 Levi Strauss & Co. Page 32 of 57

33 Task 17: Assemble Existing Documentation Input: Written documentation assembled during Tasks 1 through 16. Output: Compilation of written documentation regarding the MS. Tools: None Question Assemble existing documentation regarding the following activities/processes: Code of conduct Policy (Task 5) Register(s) of Key Stakeholders and Requirements (Task 7) Code of conduct Aspects and Impacts Requirements (Task 8) Objectives and Targets (Task 9) Management Programs (Task 10) Procedures and Instructions (Task 11) Monitoring and Measurement Procedures (Task 12) MS Auditing Procedure (Task 13) Corrective and Preventive Action Procedures (Task 14) Emergency Preparedness and Response Procedure (Task 15) Management Review Procedure (Task 16) Completed? Suggestion: The documentation discussed in this Task and Tasks 18 and 19 may be electronic and/or in hard copy. In either case there must to be procedures to ensure appropriate access and control over the documentation Levi Strauss & Co. Page 33 of 57

34 Task 18: Develop Any Necessary Additional Documentation Input: Documentation compiled in Task 17 Output: Additional documentation of MS Tools: None Question Develop documentation (if it does not already exist) regarding the flow of responsibility for implementing and maintaining the MS and its procedures. Be sure to identify document owners. Based on guidance regarding documentation requirements for an MS and the requirements for document control determine the need to revise or supplement the existing documentation regarding each of the areas above Completed? Suggestion: None Task 19: Assemble MS Manual Input: Output: Tools: Documentation assembled in Task 17, with additional documentation from Task 18 MS Manual. None Question Assemble the documentation into a manual. It is usually not a good idea to attempt to include every MS related document in the MS Manual. The manual should be considered a tool to identify and locate documentation. Ensure user-friendliness of the manual by separating information with section tabs, and by referencing other documentation. Use of Intranet site or internal network as the location for the MS manual is an efficient mechanism for document control and access. Completed? Suggestion: None 2005 Levi Strauss & Co. Page 34 of 57