In today’s Financial Times, it was announced that a long awaited report commissioned by BAE Systems is to be released by Lord Woolf. The report will call for a yearly audit of the company’s business practices in order to ensure it meets certain ethical standards.
Lord Woolf’s report, published on Tuesday, calls for a yearly independent audit of BAE’s business processes to ensure they meet the highest ethical standards. The company also has to adopt certain principles and procedures to ensure its business conduct is seen to meet the highest standards. BAE has pledged to follow the recommendations in the report, so the next time a sceptical investor asks whether the company has behaved ethically, Mr Olver will be able to point to the Woolf initiative.
While it’s too early to tell what impact if any this audit will have on the company, our experience in observing such assessments it not dissimilar to putting lipstick on a pig. At the end of the night, its still a pig.
Perhaps shareholders will notice that all of the social responsibility fluff is just that and that the company’s true measure is in its actions.
Stay tuned.
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