Chapter 5 Flashcards
the Sarbanes-Oxley Act (SOX)
The legislation established stronger standards to prevent misconduct and improve corporate governance practices.
–>SOX applies to all publicly traded companies whose shares are listed on the stock exchanges under the jurisdiction of the U.S. Securities and Exchange Commission.
The GOAL of SOX …
is to ensure the accuracy and reliability of published financial information. Requirements deal with the proper administration routines, procedures, and control activities.
Corporate social responsibility (CSR):
Is the concern businesses have for the welfare of society, not just for their owners
Corporate philanthropy, social initiatives, responsibility, and policy are all ways corporations can perform CSR
Conscious consumerism & ethical consumerism:
Conscious consumerism
consuming less and ensuring that what we do consume is as sustainable as possible.
Ethical consumerism
defined as the practice of purchasing products and services produced in a way that minimises social and/or environmental damage
The Approaches of social responsibly
strategic approach
is tending to your shareholder’s needs and only theirs.
pluralist approach
recognizes the social responsibility of management to optimize profits but not at the expense of employees, suppliers, and community members.
=This view says that corporations can maintain economic viability only when they feel moral responsibility.
example
when the South American coffee crop was dying in South America Starbucks’s R&D plant developed rust-resistant coffee plants.
Consumers have four basic rights (SICH)
(1) the right to safety
(2) the right to be informed
(3) the right to choose
(4) the right to be heard.
Insider Trading
uses private company info to tell friends things before they go public to further their own fortunes.
A social audit
is a systematic evaluation of an organization’s progress toward implementing programs that are socially responsible and responsive.
