The Body Shop approach to stakeholder auditing
A Body Shop case study

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Page 5: Stakeholder auditing

The Body Shop published its first Values Report in January 1996. Inevitably, the report contained both good and bad news:

Employees

  • 75% of the employees said they were proud to be part of The Body Shop.
  • 71% said they enjoyed their job.
  • Nearly one in four felt they would have to change companies to develop their careers.

Franchisees

  • All the international franchisees sampled agreed that the company takes active steps to make the business more environmentally responsible.
  • 91% were satisfied with the communications on environmental management and auditing.
  • 35% either had no opinion or disagreed that The Body Shop portrays its business practices accurately to the public.

Customers. The Body Shop scored:

  • 9 out of 10 for its ‘Against Animal Testing’ stance.
  • 7.8 out of 10 for its commitment to environmental responsibility.
  • 7.5 out of 10 for campaigning effectively on human rights, environmental protection and animal protection.
  • customer complaints rose from 18.3 per 100,000 in 1992/3 to 20.9 per 100,000 transactions in 1994/5.

Suppliers

  • 80% of suppliers recognised prompt payment, clarity of delivery and purchase order requirements and fairness of quality assurance arrangements.
  • 20% disagreed or strongly disagreed that The Body Shop purchasing and logistics functions are well structured and efficient.

Community Trade suppliers. Despite a general fit with the Fair Trade Guidelines, a small number of partners, questioned by an independent organisation, were still struggling to be commercially viable in the conventional sense, even though there had been a range of social gains from The Body Shop relationship. However, from the shareholders’ point of view:

  • 90% agreed or strongly agreed that The Body Shop takes active steps to make its business more environmentally responsible.
  • only 29% thought that the company enjoyed the trust of the financial community.
  • 33% did not think that The Body Shop has a clear, long-term business strategy.
  • Local community

In 1994/5, The Body Shop staff gave 19,500 hours to projects in the community, but this commitment came from only 25% of the employees. As far as The Body Shop campaigns were concerned, more than 3 million signatures world-wide were collected calling for stricter enforcement of the Convention on International Trade in Endangered Species, but tragically a human rights campaign which started in 1993 failed to prevent the execution of Ken Saro-Wiwa and eight other Ogoni leaders by the Nigerian military government.

The future - an on-going process

A stakeholder audit must be evaluated on a continuing basis. The analysis of these results enables The Body Shop to plan for the future. For example, there are plans for:

  • improved communications and more involvement of franchisees in decision making
  • better internal communications with employees
  • better indicators for monitoring customer satisfaction
  • improvements in communication with and support for suppliers
  • establishment of formal trading agreements with Community Trade suppliers and the launch of a six point plan for the encouragement of community volunteering.

For the shareholders, there were promises to adopt a progressive dividend policy and develop and build relationships with shareholders and prospective shareholders. Shareholders' interests would be maximised while also balancing the needs of other stakeholders. Following the publication of the results of a social audit, it is vital to obtain feedback from stakeholders and engage them in dialogue. This helps shape future audit cycles, enables indicators and data presentation to be fine-tuned for future cycles and helps set priorities for future action by the company.

Body Shop | The Body Shop approach to stakeholder auditing
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