Catching Up With...

Catching Up With Marty Brochstein

The International Licensing Industry Merchandisers’ Association (LIMA) is working with Business for Social Responsibility to help members adhere to the LIMA Code of Business Practices, a voluntary code that encourages good business practices. LIMA’s Marty Brochstein gives the scoop on the code, the formation of the Licensing Working Group, and the series of webinars that will educate licensees and their suppliers on meeting the code’s criteria.

Chris Adams: In what ways is LIMA working to facilitate socially responsible products among companies associated with the licensing industry?

Marty Brochstein: Several years ago, LIMA adopted the LIMA Code of Business Practices—a voluntary code through which members are encouraged to operate (or contract with) factories that manufacture licensed products in a lawful, safe, and healthful manner. It upholds the following principles: 1) no forced or under-age labor will be employed; 2) no one will be denied a job because of gender, ethnic origin, religion, affiliation, or association; and 3) factories must comply with laws protecting the environment. Supply agreements with firms manufacturing licensed products on behalf of LIMA members should also provide for adherence to these principles.

It is LIMA’s role to inform, educate, and survey its members so that individual member companies can adhere to the LIMA Code of Business Practices. As an association, we also act to encourage local and national governments to enforce wage and hour laws as well as factory health and safety laws. The entire code can be seen here.

One challenge for everyone in the licensing supply chain—particularly licensees—is to manage and facilitate the compliance requirements of multiple licensors and retailers. LIMA is supporting the Licensing Working Group, organized by consultancy Business for Social Responsibility (BSR), which is aimed at helping licensees cope with that challenge, with the goal of streamlining the process.

C.A.: Who are LIMA’s partners in this initiative and what do they bring to the table?

M.B.: As mentioned, the Licensing Working Group was assembled through BSR. A number of companies participated in early discussions and in fielding a survey of licensees and manufacturers that helped define many of the underlying issues. Disney, Hasbro, Mattel, and NBC Universal have worked within the group to develop training materials for an upcoming webinar series that will be the first manifestation of this project. In addition to the financial support they bring to the Licensing Working Group, these companies offer the benefits of experience in sourcing and compliance as well as a desire to mitigate the negative impact that these issues have on operating a responsible, efficient, and profitable business.

C.A.: What challenges have you encountered in the process of developing procedures for this initiative and how do you plan on overcoming them?

M.B.: The first step was to field an online survey in late 2009 to help define licensees’ perspectives on effectively managing the social and environmental compliance expectations of licensors within their own factories and in their supply chains. Questions focused on communications between licensees and licensors and opportunities for collaboration. Representatives of 126 companies responded to the survey.

One of the major findings of the survey was that, while licensors’ expectations seem to be well understood, traditional compliance challenges—costs, audit fatigue, and lack of resources for monitoring and remediation—are still pervasive. Licensees are trying to take a more collaborative approach with suppliers in their efforts to build supply-chain compliance. Many respondents said they are working to build ongoing relationships with suppliers that demonstrate continuous improvement and seeking support from licensors to create performance incentives. By the same token, though, communications between licensors and licensees remains a work in progress. As BSR said in its summary of the survey, “There is a strong foundation for communications between licensors and licensees but room for increased transparency and trust.” Going forward, licensees say they welcome more training and support collaborative approaches among licensors to decrease the compliance burden but have been disappointed by efforts in this area so far.

C.A.: Tell me about the upcoming webinars and how they came to be.

M.B.: The results of the survey pointed to the need for a training program. Since the companies at which the program would be aimed are spread around the globe, the Licensing Working Group decided that webinars would be a good way to start. The webinars represent a key first step in educating licensees and their suppliers in dealing with compliance regimens. At this point, we have scheduled sessions for Wednesday, October 20, and Wednesday, January 19. Both are being formulated to address the major issues highlighted by the results of the December survey I talked about earlier, and feedback from those sessions will help guide further efforts.