CSR And Corporal Governance

Question 1

What Is management ethics

Answer 1

A code of ‘honourable behaviour’ guided by a set of moral principles.

Question 2

What determines the manner in which situations are managed

Answer 2

The managers ethical norms and values

Question 3

What is corporate social responsibility

Answer 3

voluntary steps taken to improve quality of life and welfare of all stakeholders (employees, customers, suppliers, government, community and competitors)

Question 4

What is corporate social investment

Answer 4

the resources (money, manpower, products, machinery, premises) that businesses spend on the community to improve the standard of living.

Question 5

What is sustainability

Answer 5

The ability to manage a certain level

Question 6

What are sustainable projects

Answer 6

Projects that continue without the presence of the business

Question 7

What are examples of sustainable projects

Answer 7

✓ vegetable garden that the community is taught to maintain
✓ ABET (Adult Basic Education and Training) classes
✓ Teaching entrepreneurial skills.

Question 8

What are the benefits of CSR for the business

Answer 8

✓ Helps to recruit best employees : people are attracted to businesses
that have a moral/ethical compass.
✓ Gives a favourable image of business: the business is giving back to the community.
✓ Builds employee loyalty : employees can see that the business is attempting to improve the standard of living in the community from where they possibly come from.
✓ Creates customer loyalty : customers will want to support a business that contributes developing a better society.
✓ Attracts investors : investing in a business that gives back to the community implies increased support and loyalty from customers, this gives rise to increased profits.

Question 9

What are the problems of CSR for the business

Answer 9

▪ Business does not always have the skills to solve societal
problems
▪ CSI costs money which a small business may not afford to budget for.
▪ CSR is time consuming, which may distract employees from meeting targets and deadlines.
▪ The community may have high expectations from the business and should the business not be able to meet these expectations it will result in bad publicity.
▪ Managers may not be trained and lack experience to handle social programmes.

Question 10

What are the benefits of CSR for the community

Answer 10

✓ Improves the quality of life of the community through provision of economical and social development opportunities.
✓ Generates employment through skills development.
✓ Provision of education and training to enhance
employment opportunities.
✓ Changes future of employees and their families by providing bursaries.
✓ Improvement and or building of infrastructure in community, example, building schools, libraries, homes.

Question 11

What the problems of CSR for community

Answer 11

Communities may not take responsibility for their own actions because they assume the business CSR initiatives will provide for them.
The community may become dependant on CSR initiatives. Some CSR initiatives are not sustainable which means that
the project will collapse /stop should the business leave.
Some businesses may use CSR initiatives to distract the public from other unethical issues the business may be involved in.
Spending money on CSR means that the money has to be recovered elsewhere, this may lead to higher prices on goods and services which will negatively impact the economy.

Question 12

What is our CSR in South Africa

Answer 12

 Inequalities of the past
 Cycle of poverty
 Dualistic economy: living in both a developing and developed economy  Years of apartheid
 Culture of crime and violence
 HIV/AIDS epidemic
 Limited water supplies
 Technological advancement
 The ‘global village’ phenomenon

Question 13

What is poverty

Answer 13

state of having little or no money as well as few or no material possessions. World bank defined this as living under US $1,90 per person

Question 14

What are the two levels of poverty

Answer 14

Extreme poverty and moderate/subsistence poverty

Question 15

Describe extreme poverty

Answer 15

• people who constantly struggle to survive.
• Incapable of fighting diseases due to lack of adequate nutrition or medical care
• Have little to no access to education, medical care or other basic human needs.
• Particularly devastated by additional disasters such as storms or droughts.

Question 16

Describe moderate or subsistence poverty

Answer 16

• These people have little income and face chronic financial
hardship.
• Lack many basic necessities such as clean water, medical facilities and sanitation.
• The comparable cost of the buying power of money is also important. In some countries US$1,25 would buy far more sustenance than in others.

Question 17

What is the triple bottom line/ integrated reporting

Answer 17

Reporting on the 3Ps:

• Profit ( economic prosperity)
• People (social responsibility) [in this case not only employees]
• Planet (environmental sustainability)

Question 18

How is king code IV different to kind code 3

Answer 18

it requires companies to apply AND explain which recommended practices business it has adopted and how they have been adopted as well as which ones the business plans on implementing in the future.

Question 19

What is king code 4

Answer 19

States that Board of Directors is accountable to ensure the following outcomes are achieved:

• ethical culture
• good performance
• effective control
• trust and good reputation

Question 20

What is a governance framework

Answer 20

A code of principals and practises that allow companies to operate in an accountable and responsible manner. Important to have established structures and processes with checkpoints to enable stakeholders to act with legal responsibilities.

Question 21

What are the primary characteristics of good governance

Answer 21

Consensus oriented
accountable
transparent
responsive
equitable and inclusive
effective and efficient
Follows the rules of the law
participatory

Question 22

What is transparency in good governance

Answer 22

allowing stakeholders to understand mechanisms and processes involved, which should be visible and clear to all. Example, tender process should be transparent.

Question 23

What is independence in good governance

Answer 23

avoidance of any undue influence by interested stakeholders that may contaminate decisions.
Example, using an external auditing firm to verify results and compliance by internal bookkeepers

Question 24

What is accountability in good governance

Answer 24

means to be answerable for actions taken and decisions made. Lack of accountability leads to lack of confidence by stakeholders. Example, Samsung increasing its brand value by 9% by holding itself accountable for the defective Galaxy Note 7

Question 25

What is fairness in good governance

Answer 25

avoiding biases towards any particular entity/group. Corporate Governance rating system is used to assess fairness. Aspects of company is assessed and ranked based on a set of clear criteria.
Example, to excuse yourself from the recruitment process if a friend or family member is applying.

Question 26

What is integrity in good governance

Answer 26

is a way to measure how those involved in companies are accountable to those that are affected by their decisions. It is about doing business in a honest and truthful manner

Question 27

What is self discipline in good governance

Answer 27

deals with a person’s level of integrity and sound business
judgment.

Question 28

What is market discipline in good governance

Answer 28

investors are willing to pay a premium for companies that are perceived to be well governed and for markets where there is good government regime.

Question 29

What is regulatory discipline in good governance

Answer 29

there to reinforce self-discipline and to promote high levels of integrity. Critical as it promotes transparency, sound business practice and fair business dealings.

Question 30

What is promoting ethical and responsible business decisions in good governance

Answer 30

• Clarifying standards of ethical behaviour for all stakeholders.
• Comply with all legal requirements.
• Have reasonable expectations of their stakeholders.

Question 31

What is social issues in good governance

Answer 31

concerned with fair treatment of society as a whole. Focus is on social equity and sustainable development. Companies need to encourage social equity in the communities they operate in.

Question 32

What are the duties and responsibilities of directors in good governance

Answer 32

act with good faith, honesty, skill, integrity.

Question 33

What does sustainability in king code refer to

Answer 33

Key stakeholders should no longer focus on only the needs of the
present but also the future needs of generations to come.

once a company has engaged in a business activity, people need to be better off, the planet must not have degraded and the company’s economic position is strengthened.

Question 34

What is the environment sustainability pillar of good governance

Answer 34

Refers to business activities that are concerned with the degradation of the
environment. Companies must preserve environmental quality as it measures both economic growth and development. This is done through considering the 4Ps of marketing

Question 35

What are the 4Ps of marketing

Answer 35

✓ Product: business should consider using recyclable/reusable materials
✓ Processes: assess the activities of the business both internally and externally
✓ Practices: look at operational activities, organisational culture, waste disposal and effective use of energy.
✓ Premises: assess the way in which buildings and surrounding are designed.

Question 36

What are the benefits of good governance

Answer 36

 Maintains investor confidence.
 Minimises wastage, corruption, risks and mismanagement.
 Helps with company brand formation and development.
 Provides incentives to owner and management to achieve objectives in the best interest of stakeholders.
 Is a positive impact on share prices and SRI rating.
 Helps company in lowering capital acquisition costs.
 Ensures corporate success and economic growth.
 Contributes to political stability and enhanced international relations

Question 37

What is the purpose of FTSE/ JSE Responsibility investment index

Answer 37

• Continue work initiated by the JSE SRI (Social Responsibility Index) that identified companies that focused on good governance and who used Triple bottom Line in their reporting.
• Measure policies and procedures of companies registered on the JSE against globally acceptable ESG (Economic, Social and Governance) standards.
• To serve as a platform for companies to demonstrate to stakeholders that they are acting and reporting in a responsible manner on ESG issues.
• Promote responsible business practices in South Africa

Question 38

What are the benefits of FTSE/JSE Responsibility investment index

Answer 38

✓ Economic, Social and Governance (ESG) disclosure among JSE-listed
companies is promoted.
✓ Scoring high on the FTSE/JSE Responsible investment Index confirms to stakeholders that the business is accountable and transparent in its dealings with ESG issues.
✓ Complying with the index could improve/boost image of business in minds of investors.
✓ Being listed on the index can be used as a competitive advantage for business.
✓ Companies can build an organisational culture around this index and make it part of their brand.

Question 39

What is GRI (Global reposting index)

Answer 39

Promotes reporting on sustainability issues through the creation of a Sustainability reporting Framework. FrameworkusedworldwidetopromotetransparencyonEconomic, Social and Governance (ESG) issues. Providesguidelinestobusinessestodeterminetheirimpacton economic, environmental and social fronts. Ensures like businesses are compared to one another