- Companies increasingly need to prove their compliance.
- ISO standards cover a wide range of issues such as quality and the fight against corruption.
- Holding ISO standards is also a real commercial advantage.
- Industrialists in all sectors such as construction or fiduciary printing have complied with these standards.
Few frameworks have had the reach and impact that the International Organisation for Standardisation (ISO) has had in streamlining quality standards in an increasingly globalised international economy, as well as providing companies with an opportunity to secure a competitive advantage in their industries. Increasingly widespread, ISO standards have gradually established themselves as a guarantee recognized by all, from customers to public authorities and companies themselves.
The ISO has its origins in an earlier organisation called the International Federation of the National Standardising Associations (ISA), founded in 1926 to establish standards in the field of mechanical engineering. This organisation was dissolved in 1942 due to the Second World War. Four years later, 65 delegates from 25 countries converged on London to discuss a new organisation which would oversee international standardisation and launched the ISO in 1947. The acronym ‘ISO’ was chosen to avoid abbreviation variances in different languages; ‘ISO’ itself is derived from the Greek word ‘isos’, which is translated as ‘equal.’ The ISO moved into its first headquarters in Geneva in 1949, where it is still based, and published its first standard – the Standard reference temperature for industrial length measurements – in 1951.
The organisation’s work relies on the input of 2700 technical committees and working groups, and each new standard follows an identical trajectory of six stages. A proposed new standard will first be debated, and if it is determined that it is necessary, specific members of the organisation will be tasked with working on its development. Then, members develop a working draft, after which it is submitted to ISO committees for comments and discussion.
When a consensus on the standard is reached, it enters the Draft International Standard (DIS) stage. The DIS is then circulated among all ISO members, which then vote on the standard. The DIS must have a 75% approval rating; if it fails to cross this threshold, it is sent back down to the committees for further work. Successful drafts then become Final Draft International Standard and are again put to a vote among members. FDIS are then put to a confirmation vote to the members, where it must garner 75% of the vote. If it passes, it is officially published as a new standard.
An evolution of the scope of expertise
The ISO has had two notable changes in direction. For its first four decades, the organisation focused narrowly on creating international standards for tools and technical systems, such as sizing for clothes and shoes. Then, in 1987, it launched the ISO 9000 series, which focused on quality management systems – loosely defined as business processes to improve products for customers’ tastes. ISO 9001, 9002, and 9003 focus on how products are designed, developed, produced, and installed. Over 1 million firms now have ISO 9000 certification, based on eight quality management principles, making this standard one of the most widely used in international business. To secure certification for all ISO standards, companies must pass inspections from independent auditors on all their facilities. The advantages which come from ISO standards are numerous, not least of which is the facilitation and promotion of international trade. Trade between nations would be enormously difficult if it were not for these globally-accepted product and process standards, on which customers rely to make their buying choices.
Another change, the launching of ISO 14001 in 2004, was another landmark standards decision made by the ISO; this standard compels companies to fully understand their product development processes and minimise environmentally harmful effects of these processes. This process was widely implemented, with Ford setting a goal to have all its manufacturing plants adhering to this standard by 1998, while IBM followed suit.
A true commercial advantage
However, another benefit from having an independent, universal, and rigorous standard supersedes the ease of trading internationally: competitive advantage, for those companies which adopt the standards, especially when adopting them ahead of their peers. Quality management systems are a critical tool for companies to sharpen their competitiveness. The implementation of such systems has a plethora of positive outcomes, including an improved consistency of output due to well-documented procedures; constantly-measured quality; and lower production costs, thanks to fewer defect rates and increasingly streamlined activities.
The ISO standards are essential for another reason: the introduction in 2016 of ISO 37001 Anti-Bribery Management Systems Standard. Drafted over three years with 37 participating countries, the standard impels companies and organisations to establish systems to prevent all forms of bribery, whether it be public or private, direct or indirect. The standard contains detailed instructions on how to implement a risk assessment for bribery, as well as how to properly assess risk of bribery. It also sets out steps to set up due diligence measures, as well as how to proceed with intra-organisational investigations.
Critically, the standard also spells out the roles of the c-suite and the board, in terms of ensuring effective staffing for anti-bribery positions and guaranteeing that policies throughout the organisation are coordinated.
Companies which have gone through certification include such heavyweights as CPA Global, Oberthur Fiduciaire, Mabey, Alstom, Meprolight and Legg. The standard appeals to government representatives as well: opposition politicians in Montreal’s municipal government have been calling for application of the standard, after Mayor Gerald Tremblay was forced to resign due to corruption in 2012, and interim mayor Michael Applebaum was convicted of corruption in January 2017. Today all sectors have complied with it and it is rare for a call for tenders to dispense with the requirement for ISO standards.
The adoption of standards as set out by the ISO is necessary for a functioning system of international trade and is instrumental in combating corruption. When it comes to the fight against corruption, independence is just as important as rigour and intransigence. From this point of view, the ISO organization has no difficulty in convincing because it inherits a rich history and enjoys, by definition, independence from any entity, be it governmental or commercial. An economic system without such safeguards would be bereft, and susceptible to more corrupt practices.