10) ESG

Question 1

what is stakeholder mgmt?

Answer 1

the foundation for ESG – org must manage its relations with stakeholders in an action-oriented way

Question 2

what is Freeman’s theory on stakeholder mgmt?

Answer 2

it would be impossible to satisfy all stakeholders and it would take over their core processes/aim as a company

Question 3

what are the key primary stakeholders?

Answer 3

those who are directly affected by the actions of the company

Question 4

what is stakeholder inclusivity?

Answer 4

• an org considering the needs, interests and expectations of all material stakeholders in the execution of its duties
• focus on value creation not profit creation

Question 5

how can an org include stakeholder inclusivity into their value creation journey?

Answer 5

• balance their goals w stakeholder expectations
• establish accountability
• develop relationships based on trust and integrity

Question 6

what is the resource-based theory?

Answer 6

companies are dependent on resources for them to be sustainable and operate in the world to ensure they have a comp adv

Question 7

what do competitive adv and resources assist with?

Answer 7

creating entry barriers to the industry

Question 8

what are the attributes of resources which create a comp adv?

Answer 8

• valuable, not substitutable
• rare and specific
• difficult to replicate

Question 9

what is the overall goal of ESG?

Answer 9

sustainability

Question 10

what are the ESG focuses for society?

Answer 10

• standard of living
• education
• jobs

Question 11

what are the ESG focuses for economy?

Answer 11

• growth
• profit
• cost saving

Question 12

what are the ESG focuses for environment?

Answer 12

• nat resource use
• pollution prevention
• biodiversity

Question 13

what are the ESG focuses for socio-economics?

Answer 13

• business ethics
• fair trade
• worker benefits

Question 14

what are the ESG focuses for socio-env?

Answer 14

• env justice

- conservation

Question 15

what are the ESG focuses for env-economic?

Answer 15

• energy efficiency
• renewable fuels
• green tech

Question 16

how can ESG help during a financial crisis?

Answer 16

can mitigate financial risk

Question 17

what are some of the issues with ESG?

Answer 17

1) transparency and measurement issues
2) issues with ranking
3) unsatisfactory balances

Question 18

what is greenwashing?

Answer 18

when a company claims to be environmentally conscious for marketing purposes but actually isn’t making any notable sustainability efforts

Question 19

what about ESG can be advantageous to a company?

Answer 19

• cost saving
• energy saving
• reducing pollution

Question 20

what is circular economy?

Answer 20

where a company minimizes wastage by putting its outputs back into the company or reusing its output

Question 21

what is social decay?

Answer 21

when a company acts like they have the SHs best interests in mind, but ultimately only focus on making a profit

Question 22

between whom can agency conflicts occur?

Answer 22

• maj and min SH
• managers and SH
• entity vs other stakeholders

Question 23

what occurs in an agency relationship?

Answer 23

fiduciary relationship where the agent has dec-mak authority to perform services on behalf of the principal

Question 24

what can be used to achieve goal congruence between principals and agents?

Answer 24

governance mechanisms

Question 25

what does King define corp gov as?

Answer 25

exercise of ethical and effective leadership through:

• strategic direction
• disclosure and oversight
• ethical culture
• accountability

Question 26

what are some of the governance outcomes that King hopes to achieve?

Answer 26

• ethical culture
• effective control
• good performance

Question 27

what are King’s requirements for board composition?

Answer 27

• diversity
• CEO not chair
• NED, iNED, executive

Question 28

how does business stage impact board diversity?

Answer 28

company will need a different set of skills, etc at different stages of growth to assist with achieving their objectives