Tesco 2003 Annual Report Download - page 11

TESCO PLC 9
Other specialist functions within the Group, notably Trading
Law and Technical and Company Secretariat, provide
assurance and advice on health and safety, regulatory and
legal compliance and social, ethical and environmental issues.
These functions report their findings on a regular basis to
the Compliance Committee.
Communication A programme of communication exists
and is constantly being developed, to ensure that all staff are
aware of the parameters that constitute acceptable business
performance and the expectations of the Board in managing
risk. This provides clear definition of the Group’s purpose and
goals, accountabilities and the scope of permitted activities
of companies, executive functions and individual staff.
CORPORATE SOCIAL RESPONSIBILITY The Board regards
Corporate Social Responsibility (CSR) as an integral part
of the overall corporate governance framework and is fully
integrated into existing management structures and systems.
Therefore, the risk management policies, procedures and
monitoring methods described above equally apply to our
CSR activities, including the management of social, ethical
and environmental (SEE) risks.
Many investors take an interest in how companies are
managing non-financial risks as these can, under certain
circumstances, have an impact on shareholder value. For
example, The Association of British Insurers (ABI) has
published disclosure guidelines on social responsibility,
including SEE matters, for investors and companies.
Last year, we published our first CSR Review on our
website, www.tesco.com/everylittlehelps.This reflects the
importance that Tesco has placed on CSR over the past
10 years. More details of our CSR strategy can be found in
the Tesco Corporate Social Responsibility Review 2002/03
and on our website.
We have an established cross-functional CSR Committee
that meets a minimum of four times a year. The CSR
Committee is chaired by the Group Corporate Affairs
Director, and its membership is made up of senior managers
from all parts of the business. One of its objectives is to
identify threats and opportunities for the coming year and
to highlight emerging issues.
The CSR Committee has established a set of CSR Key
Performance Indicators (KPIs), and these KPIs are used to
track performance quarterly and annually.The KPIs feed
directly into the Steering Wheel monitoring system explained
earlier and thus contribute to the overall monitoring of
Group performance and control evaluation by the Board.
The Chairman of the CSR Committee makes regular
reports to the Executive Board on CSR matters.
The CSR KPIs and the related management system
are available in the CSR Review 2002/03 and on-line.
Risks and opportunities Like all companies, we manage
a broad range of financial and non-financial risks, including
those relating to our CSR responsibilities.
The most recent CSR assessment found that controls
largely mitigated the SEE risks to the business.
Customer focus is fundamental to delivering our strategy
and the way we manage risk. All our business practices centre
on serving the customer and in meeting those challenges we
recognise our responsibility to deliver quality products at the
right price.
All companies have to face ethical dilemmas in the
normal course of business. Our approach comes from the
Tesco Values. The Values set out the standards we wish to
uphold in how we treat people.
These are supported by Codes of Ethics and govern the
relationships between ourselves and employees, suppliers and
contractors.The Compliance Committee regularly monitors
adherence to these codes.The company is a signatory to the
DTI Code of Conduct and has met fully its obligations for
implementing the Code.
In the last year, we have introduced a Human Rights
policy, and ‘Protector Line’– a confidential telephone helpline
for staff to raise their concerns without fear. We will investigate
any allegations of impropriety and take appropriate action as
necessary. More details of the policy are available in the CSR
Review 2002/03.
CSR is also an important factor in retaining and recruiting
staff. It helps morale, and programmes such as Charity of the
Year and Race for Life, encourage staff involvement.The Tesco
CSR website, www.tesco.com/everylittlehelps has been cited
by graduate recruits as one factor in their choice of Tesco as
an employer.