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
