Corporate responsibility and ethics

Question 1

Business Ethics

Answer 1

The accepted principles of right or wrong governing the conduct of business people (Charles Hill)

Question 2

Good ethical behavior has impact on

Answer 2

a company’s reputation; markets and public opinion

Question 3

Most common ethical issues when managing in a global context

Answer 3

Employment practices
Environmental Pollution
Human rights
Corruption
Moral obligations

Question 4

Corporate Responsibility

Answer 4

companies integrate social and environmental concerns in their business operations and in the interaction with their stakeholders, on a voluntary basis

Question 5

Triple bottom Line

Answer 5

• People (social)
• Planet (environmental)
• Profit (economic)

Question 6

Stakeholders

Answer 6

• shareholders
• employees
• investors
• consumers, customers, suppliers
• public authorities and regulators
• NGOs

Question 7

CR targets start where

Answer 7

compliance with enforced sustainable practices end

Question 8

CR

Answer 8

Corporate Responsibility

Question 9

CSR

Answer 9

Corporate Social Responsibility; Corporate Stakeholder Responsibility

Question 10

Sustainability

Answer 10

Corporate Sustainability

Question 11

Foundations of Ethics and Social Responsibility - Organizational

Answer 11

Ethics is subjective and ambiguous; MNE needs code of conduct to align with expectation
- CEO Responsibility
- Reporting
Failure occurs when ethical principals are not clear

Question 12

Foundations of Ethics and Social Responsibility - Cultural

Answer 12

SR is subjective and ambiguous; MNE must make choices and commit to a framework of standards and report progress with transparency
- Relativism - adaptation
- Normativism - Universal values
Failure occurs when SR commitments are not clear

Question 13

Foundations of Ethics and Social Responsibility - Legal

Answer 13

Law embodies local, cultural and political economic routes; MNE must respect local law, but being legal does not mean being ethical
- being illegal brings fines but being unethical damages reputation
- regulation is slow to develop
Failure occurs when ethical principals and SR commitments are not clear

Question 14

Practices and mechanisms of internal regulation

Answer 14

• Code of Conduct
• Recruitment (hire people with similar values/principles)
• Corporate certification and reporting
• Individual behaviour in a given situation
• Whistle blower policy
• Ethics Commission

Question 15

Ethical MNE

Answer 15

adopts the right business conduct, with positive impact on reputation

Question 16

Socially responsible MNE

Answer 16

integrates social and environmental concerns in business operations => win-win situation for the company and the stakeholders

Question 17

Philanthropic MNE

Answer 17

Promotes wellness of others with no direct link with business operations (e.g. donations for humanitarian causes)

Question 18

Risk management approach

Answer 18

=> avoid bad reputation; Perception of unethical behaviour can “kill” corporate reputation and/or a brand
- The power of Media & Social Media
- Combat Fake News

Question 19

Sustainability approach

Answer 19

=> build a source of competitive advantage; Environment friendly and socially responsible businesses can make consumers opt for the Brand
- Align with Global Initiatives that improve standards and mitigate price impact

Question 20

Environmental standards

Answer 20

assess how companies relate and care for nature and the sustainability of the planet.

Question 21

Social standards

Answer 21

evaluate how the companies engage with their stakeholders, namely the communities where they operate, employees, customers, suppliers, NGOs, Governments.

Question 22

Governance standards

Answer 22

deal with shareholder rights, Boards, leadership, executive pay, internal controls, risk assessment, and audit

Question 23

Reasons for adopting ESG

Answer 23

• Associate company branding with sustainability
• Attract new customers driven by sustainability
• Attract positive media / PR coverage
• Attract interest from socially responsible investors
• Improve employee motivation / retention (“work with purpose”) and overall committment with the company’s mission and performance
• Create new business development opportunities through increased stakeholder trust and positive public opinion (eg. dealings with governments)