CSR/Stakeholder Engagement/Non-financial reporting Flashcards
Describe Corporate Social Responsibility?
The commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as of the local community and society at large.
List 5 drivers for Corporate Social Responsibility
THE COMPANY
1. For sustainability
2. To reduce risk
3. To attract capital (Financial and Human)
4. For innovation
5. To obtain competitive advantage
Provide 4 factors that a company may consider when seeking to measure CSR Initiatives
- Focus on outcomes beneficiaries of the initiatives and/or helped create a better planet
- Measuring the outcome using both quantitative and qualitative measurements
- Listen to stakeholders
- Do not undervalue stories.
- Learn from others
- Identify and measure the risks
- Measure, refine, modify, measure again
Provide 2 benchmarking tools for CSR
- Dow Jones Sustainability Indexes (DJSI)
- FTSE4Good Indexes
- Business in the Community (BITC) Responsible Business Tracker
What are the six capital resources that should be taken into account with Integrated Thinking?
- Financial capital – money, equity, bonds, monetary value of assets, etc. that an organisation needs to operate.
- Human capital – the collective skills and experience of the people that work for the organisation.
- Manufactured capital – physical means and infrastructure needed for an organisation to provide its products and services, e.g. fixed assets.
- Intellectual capital – patents, copyright, designs, goodwill, brand value and knowledge accumulated, i.e. intangible assets.
- Natural capital – natural resources and energy that the organisation depends on to produce its products/services.
- Social capital – value added to an organisation of the social relationships with individuals and institutions that an organisation has developed through its stakeholder engagement.
List the 3 ways a company can engage with stakeholders
Reactively - Engages defensively, when forced to in response to a crisis
Proactively – Tries to understand its stakeholders’ concerns and issues and engages with them
Interactively - Has ongoing relationships of mutual respect, openness, and trust
List 8 roles of the company secretary in stakeholder engagement
- Identifying stakeholders, their expectations and interests.
- Mapping the power and interest of stakeholders or stakeholder groups, so that they can develop a strategy for engaging with them.
- Discussing and approving key performance indicators for social, environmental and financial performance.
- Looking to integrate stakeholder issues into annual shareholder meetings. This can be done through resolutions, presentations at meetings, and/or displays at the entrance or in the meeting room.
- Discussing the risks and impacts (positive and negative) of projects and operations and providing transparent disclosure information to stakeholders (including shareholders).
- Convening stakeholder forums and inviting key stakeholder representatives to address board meetings, so members of boards hear from stakeholders directly about their concerns and issues.
- Documenting the concerns and issues of stakeholders and lessons learned and feeding this into the risk management, strategic planning and business continuity processes
- Informing key stakeholders about the CSR initiatives and targets and keeping them up to date on progress
List 5 problems with traditional corporate reporting
- Too heavy for the postman – annual reports, due to ever-increasing regulation and reporting requirements, have become so detailed and extensive that many are totally inaccessible to the average reader.
- Yesterday’s story – annual reports present activities of the company over the previous financial year.
- The financial picture only
- Some intangibles are excluded e.g. corporate governance, brand recognition, good reputation and sound risk management
- Non financial costs costs are excluded – the environmental costs of using up natural resources that can never be regenerated and of the impact of carbon emissions on climate change are excluded from financial accounting.
- Different reports are prepared for different users e.g the sustainability report and the corporate governance report meet the demands of a particular stakeholder group.
- Financial reporting only pushes company into short-termism
What is Narrative Reporting?
Describes the additional non-financial information which is included in companies’ annual reports, providing a wider and more meaningful picture of the company’s business, its strategy and future prospects
List 4 items to be included in the Strategic Report
- describe the company’s strategy, objectives and business model;
- provide an explanation of the main trends and factors affecting the company;
- describe the company’s principal risks and uncertainties;
- include an analysis of the development and performance of the business, including key performance indicators (KPIs);
- include information about the environment, social, community, human rights, anti-corruption and anti-bribery matters when material; and
- include information on gender diversity.
List 4 benefits to an organisation of integrated reporting
- Greater clarity about relationships and commitments.
- Better decisions
- Deeper engagement with all stakeholders
- Helps eliminate the artificial distinction between shareholders and stakeholders
- Companies become aware of the interests of their different stakeholders and how those interests are in alignment or conflict with each other
- Reduces reputational risk
- Presents a company’s social and environmental performance in a way which is integrated with its financial performance;
- promotes ‘integrated thinking’, that is it helps a company to understand the relationships and interdependence between its business and capital (including both financial capital and non-financial capital, such as human and social capital) and how that affects the company’s ability to create and preserve value;
List 6 ways in which a company secretary can support the company in CSR
Developing
1. Ensuring that KPIs for non-financial matters are developed and approved by the board.
2. Working with the board to agree:
– the reporting framework to be adopted, for example the GRI standards or the UN Global Compact.
– how the non-financial information is to be presented
– how the reporting will meet the differing needs of the different audiences for the reporting
Monitoring
3. Ensuring that a review of the annual process is conducted and presented to the board highlighting areas for improvement
4. Ensuring that the principle risks associated with CSR activities are known and are being managed
5. Liaising with internal audit to ensure that the management information systems has the appropriate assurances
6. What other companies are doing, the KPIs they are using, the type of future-orientated information they are including in their reports and how they are responding to stakeholder issues.
Advising
7. Ensuring directors understand their duties
Communicating
8. Views and interests of key stakeholders and their perceptions of how the company is performing from a non- financial perspective.
9. What other companies are doing, the KPIs they are using, the type of future-orientated information they are including in their reports and how they are responding to stakeholder issues.
10. Reporting progress against the approved non-financial KPI
What are the steps in creating a CSR partnership?
- Identify clear reasons to collaborate
- Find a ‘fairy godmother’
- Set simple, credible goals
- Get professional
- Dedicate good people to the cause
- Be flexible in defining success
- Prepare to let go
What 3 ways can you engage with stakeholder?
Reactively - Engages defensively, when forced to in response to a crisis
Proactively – Tries to understand its stakeholders’ concerns and issues and engages with them
Interactively - Has ongoing relationships of mutual respect, openness, and trust
