CSR and Corporate Governance Flashcards
what is corporate social responsibility
managements obligation to protect and promote the welfare of all stakeholders (financially or otherwise), to act in an ethical manner regarding issues related to stakeholders
what is corporate social investment
actual resources that are invested in these stakeholders i.e money, manpower, machinery, products
what is triple bottom line reporting
includes economic, enivronmental and cosial aspects of organisation’s activities.
what is sustainability
long term, enable community to become self sufficient, ensure project continues, enable to continue benefitting after CSI intervention
what is the organisations primary social responsibility
TOWARDS THE BUSINESS
- owner contributed capital to business venture, have direct interest in financial performance
- employees
- suppliers
- cosumers
- competitors
what is the business’s broader social responsibility
government- collects taxes to create infrastructure and environment that stimulates more business operations
broader community- ecological control, nature conservation, sponsorships, upliftment of poor, health and safety, aids prevention, anti drug abuse campaigns, pollution prevention
5 arguments for CSR
- if business does not assist in solving social problems of community, will encounter socio economic problems. should be proactive
- moral duty of business to lend a helping hand because have resources and expertise
- if corporate sector gets involved less likely government will enforce it with legislation
- help to promote image of business and gain goodwill
- improving general standard of living in community ( reduce socio economic problems and create more consumers if sustainable)
6 arguments against CSR
- providing goods and services is already being socially responsible
- shareholders are the only real stakeholders and profit is the most important
- not many real benefits or ROI
- spending money means business has to try to recover it , higher prices and inflation have negative impact on economy
- creates expectations in community, devastating if not met
- does not always lend itself to sustainable development in communities
ROI
return on investment
CSI
corporate social investment
9 factors that contribute to the need for CSR in south africa
- inequalities of the past
- cycle of poverty
- dualistic economy
- years of apartheid
- culture of crime and violence
- HIV/ AIDS
- limited water supplies
- technological advancement
- global village phenomenon
what is the definition of poverty
poverty is the state of having little or no money and few or no material possessions, manifests at different levels
what are the 2 levels of poverty
- extreme poverty
2. moderate or subsistence poverty
what does the king report do
examines companies commitment to
- asessing how company impacts surrounding community
- how company is intending to sustain positive aspects and eliminate negative aspects
what is the philosophy behind the king report
ethical leadership, sustainability, good corporate citizenship
what is a governance framework
code of principles and practices where set criteria is used as part of assessment for company
what is the link between governance principles and the law
good governance exists hand in hand with law, key stakeholders must discharge their duty in a legal manner, act with care diligence and fiduciary duty. ensure that structures to enable key stakeholders to act with legal responsibility established
what are the primary characteristics of good governance
- transparency
- independence
- accountability
- fairness
- integrity
- discipline
what are the 3 types of discipline
- self discipline
- market discipline
3 regulatory discipline
what should companies look at to promote ethical and responsible business decisions
clarifying standards of ethical behaviour for stakeholders
complying with legal requirements
reasonable expectations of stakeholders
what are the benefits of good corporate governance
not limited to economic properity, creates politcal stability, good international relations, builds community
- maintains investor confidence
- minimizes wastage, corruption, risk and mismanagement
- provides incentives to achieve objectives
- positive impact on share price and SRI rating
- helps company lower capital acquisition costs
- ensures corporate success and economic growth
what is sustainable development
examines relationship between triple bottom line. once a company has engaged in a business activity people need to be better off, planet must not be degraded, company’s economic position must have been strengthened
how do you secure sustainable developement
ensure all stakeholders treated fairly, design products, processes that do not degrade environment, at the same time stimulate profit making
what is the social sustainability pillar
part of sustainable development , concerned with fair treatment of society on a whole, companies need to encourage social equity in the communities in which they operate
6 things on sustainability pillar
- fair income distribution
- fair access to education
- fair distribution of costs and benefits of environmental protection
- fair trade
- fair access to prices between all social, gender and culture groups
- similar chances of well being between generations
what are the 3 pillars of sustainable developement
social sustainability, environmental sustainability, economic sustainability
what is the environmental sustainability pillar
all business activities concerned with the degradation of the environemnt i.e pollution , carbon emission, deforestation
what are the 4 ps that help companies preserve environmental quality
factors must be sustainably designed-
product- eco friendly
processes- assessing what forms part of company’s value chain
practices
premises- assessing the way building is designed
what does the economic sustainability pillar do
measures economic growth and development , focus on reporting profits, growth and contributions to social equity
what is growth
physical development in size of business
what is developement
improvements or unfolding of potentials that leas to success
what is the JSE SRI
Johannesburg stock exchange social responsibility investment index
what are the key objectives of the JSE SRi
- identify companies listed on JSE that subscribe to TBL reporting
- provide a tool to assess company alignment to global and local CSR
- contribute to the development and growth of sound business practice in SA
what are the categories of the JSE SRI
environmental, society and governance and related sustainability concerns
set of criteria assessed for SRI
available material on company assessed
feedback on company with prelim results given, time for company to clarify information
meet core and desirable elements
what is core criteria vs desirable
core - minimum elements companies should comply with
desirable- elements company should aspire to
what is the JSE SRI criteria
- environmental sustainability
- social
- economic
- governance
company must provide- company policy and strategy, management and performance of these indicators, reporting on these indicators
what is the GRI
global reporting initiative, developed acceptable guidelines for sustainable reporting (TBL), most widely used sustainability reporting model, addresses broad performance of company
