Baldrige Criteria Item 1.2 - Governance and Societal Responsibilities

2010 Baldrige Criteria Item 1.2 (Governance and Societal Responsibilities) - Integrated Version

Item 1.2 - Governance and Societal Responsibilities (50 pts.)                                                                                                 Process

HOW do you govern and fulfill your societal responsibilities?

Describe your organization’s GOVERNANCE SYSTEM and APPROACH to leadership improvement. Describe HOW your organization assures legal and ETHICAL BEHAVIOR, fulfills its societal responsibilities, and supports its KEY communities. Within your response, include answers to the following questions: 1.2a. Organizational GOVERNANCE (1)  HOW does your organization review and achieve the following KEY aspects of your GOVERNANCE SYSTEM? •   accountability for management’s ACTIONS •   fiscal accountability •   transparency in operations and selection of and disclosure policies for GOVERNANCE board members, as appropriate •   independence in internal and external audits •   protection of STAKEHOLDER and stockholder interests, as appropriate (2)   HOW do you evaluate the PERFORMANCE of your SENIOR LEADERS, including the chief executive? HOW do you evaluate the PERFORMANCE of members of the GOVERNANCE board, as appropriate? HOW do SENIOR LEADERS and your GOVERNANCE board use these PERFORMANCE reviews to further their development and to improve both their personal leadership EFFECTIVENESS and that of your board and LEADERSHIP SYSTEM, as appropriate? 1.2b. Legal and ETHICAL BEHAVIOR (1)   HOW do you address any adverse impacts on society of your products and operations? HOW do you anticipate public concerns with current and future products and operations? HOW do you prepare for these [public concerns with current and future products and operations] concerns in a proactive manner, including conserving natural resources and using EFFECTIVE supply chain management PROCESSES, as appropriate? What are your KEY compliance PROCESSES, MEASURES, and GOALS for achieving and surpassing regulatory and legal requirements, as appropriate? What are your KEY PROCESSES, MEASURES, and GOALS for addressing risks associated with your products and operations? (2)   HOW does your organization promote and assure ETHICAL BEHAVIOR in all your interactions? What are your KEY PROCESSES and MEASURES or INDICATORS for enabling and monitoring ETHICAL BEHAVIOR in your GOVERNANCE structure, throughout your organization, and in interactions with CUSTOMERS, PARTNERS, suppliers, and other STAKEHOLDERS? HOW do you monitor and respond to breaches of ETHICAL BEHAVIOR? 1.2c. Societal Responsibilities and Support of KEY Communities (1)   HOW do you consider societal well-being and benefit as part of your strategy and daily operations? HOW do you consider the well-being of environmental, social, and economic systems to which your organization does or may contribute? (2)   HOW does your organization actively support and strengthen your KEY communities? HOW do you identify these communities and determine areas for organizational involvement, including areas related to your CORE COMPETENCIES? What are your KEY communities? HOW do your SENIOR LEADERS, in concert with your WORKFORCE, contribute to improving these communities?

Notes: N1. Societal responsibilities in areas critical to your organization’s ongoing marketplace success also should be addressed in Strategy Development (Item 2.1) and in Process Management (CATEGORY 6). KEY RESULTS, such as RESULTS of regulatory and legal compliance (including the RESULTS of mandated financial audits), reductions in environmental impacts through use of “green” technology, resource-conserving activities, or other means, or improvements in social impacts, such as the global use of enlightened labor practices, should be reported as Leadership Outcomes (Item 7.6). N2. Transparency in operations of your GOVERNANCE board (1.2a[1]) should include your internal controls on GOVERNANCE PROCESSES. For some nonprofit organizations, an external advisory board may provide some or all of the GOVERNANCE board functions. For those nonprofit organizations that serve as stewards of public funds, stewardship of those funds and transparency in operations are areas of emphasis. N3. LEADERSHIP PERFORMANCE evaluation (1.2a[2]) might be supported by peer reviews, formal PERFORMANCE management reviews (Item 5.1b), and formal or informal WORKFORCE and other STAKEHOLDER feedback and surveys. For some nonprofit and government organizations, external advisory boards might evaluate the PERFORMANCE of SENIOR LEADERS and the GOVERNANCE board. N4. MEASURES or INDICATORS of ETHICAL BEHAVIOR (1.2b[2]) might include the percentage of independent board members, MEASURES of relationships with stockholder and non-stockholder constituencies, instances of ETHICAL CONDUCT breaches and responses, survey RESULTS on  WORKFORCE perceptions of organizational ETHICS, ETHICS hotline use, and RESULTS of ETHICS reviews and audits. They also might include evidence that policies, WORKFORCE training, and monitoring SYSTEMS are in place with respect to conflicts of interest and proper use of funds. N5. Areas of societal contributions and community support appropriate for inclusion in Item 1.2c might include your efforts to improve the environment (e.g., collaboration to conserve the environment or natural resources); strengthen local community services, education, and health; the environment, including collaborative activities to conserve the environment or natural resources; and improve the practices of trade, business, or professional associations. N6. The health and safety of your WORKFORCE are not addressed in Item 1.2; you should address these WORKFORCE factors in Item 5.2. N7. Nonprofit organizations should report in 1.2b(1), as appropriate, HOW they address the legal and regulatory requirements and standards that govern fundraising and lobbying activities. N8. For some charitable organizations, societal contributions and support for KEY communities (1.2c) may occur totally through the MISSION-related activities of the organization. In such cases, it is appropriate to respond with any “extra efforts” you devote to support of these communities.

For additional description of this Item, see 1.2 Governance and Social Responsibilities Description. Assessment of Item Responses Item responses are assessed by considering the Criteria Item requirements; your key business factors presented in your Organizational Profile; and the maturity of your approaches, breadth of their deployment, and strength of your improvement process and results relative to the Scoring System. Refer to the Scoring System information.

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Thank you for using the only truly integrated form of the Baldrige Criteria available anywhere.  Paul Steel