Quiz 4 Flashcards
All business owners are also
Investors
Shareholder
an owner who holds legal title to a part of the company
Dual-class stock
more than one type of stock issued by a corporation
non-voting/restricted shares
permitted on TSX. restricted shares limit voting
Passive shareholders
those who do not attempt to influence the affairs of the corporation even though they have a legal right to do so
Active shareholders
those who participate in the governance to the full extent allowed by the law
Socially responsible investing (SRI)
aims to incorporate ESG factors into investment decisions
Passive screening
invest in corporations with good social/economic records and enlightened industrial/stakeholder relations
negative screening
identify objectionable corporations
best of sector
compare and rank within an industry to encourage improvement
corporate governance
the processes, structures, and relationships through which the shareholders, as represented by a board of directors, oversee the activities of the corporation
say-on-pay
shareholders’ ability to vote on executives’ remuneration
CEO pay ratio
ratio of CEO compensation to median employee compensation
Why do boards need to pay attention to ethics?
Globalization: need to consider TBL impacts, including in developing countries
Loss of trust: businesses have had several breaches, including compensation, outsourcing, environmental disasters, and the stock market
civil society activism: NGOs and other civil society organizations are more effective at highlighting corporate misdeeds and mistakes
investor interest: investors keen on responsible investing
Private sector
run by private individuals and corporations. generate wealth through earnings
social sector
Charities and NFPs. solicit donations and sometimes generate earnings to create public benefit with no profit motive
Public sector
government seeks to create public benefit, usually with no profit motive
Public-private partnership (PPP)
co-operative venture between the public and private sectors, built on the expertise of each partner
Fourth Sector
Merge the market-based approaches of the private sector with the public benefit focus of the social sector
Sustainability strategy
a plan that views economic, ethical, social, and environmental responsibilities more intensively
integrates CSR into all facets of the corporation’s operations
stages of CSR
Defensive - criticism from stakeholders for the alleged negative societal or environmental impact that may affect brand reputation
Compliant - mitigating litigation risk, protecting the organization’s brand and economic value
Managerial - assessing that a problem is a long-term risk and thus needs to be addressed in the organization’s value chain or daily operations
Strategic - seeing the benefit of addressing an issue; responding to stakeholders’ needs may be seen as a source of long-term competitive advantage
Civil - Recognition that collective action on a stakeholder issue will diminish first-mover advantage
Intrapreneurship
process of addressing social challenges from inside established organizations
Extrapreneurship
process of inter-organizational action facilitating alternative combinations of ideas, peoples, places, and resources to address social challenges
Social entrepreneur
innovative, visionary leader of a non-profit or for-profit business with real-world problem-solving creativity
Social enterprise
a model of business operation where some or all profits are deliberately used to further social aims
B corporation
Operates to make profits but has a strong commitment to addressing social and envionmental problems
Social innovation
a novel solution to a social problem that is more effective, efficient, sustainable, or just than curent solutions, where the value created accrues primarily to society rather than to private individuals
- fuels for the fourth sector
the sharing economy
a sustainable social and economic system involving the sharing of human and physical resources
- often operates with little government regulation
Philanthrocapitalism
draws upon modern business practices with an entrepreneurial spirit to get more from non-profit or social organizations
- seeks to address coail issues in the developing world: health, education, poverty reduction, equality
Social Capital
any aspect of a corporation’s organizational arrangements that creates value and facilitates the actions of stakeholders within and external to the corporation
created when stakeholders and corporations have relationships facilitating understanding, co-operation, and coordination
levels of organizational culture
level 1: compliance, focused on law & norms
level 2: relationship management, value created and traded off
level 3: sustainable organizational culture – maximizes value creation
sustainable capitalism
an economic system within which business and trade seek to maximize long-term value creation, accounting for all material ESG metrics
Responsible enterprise system
economic system operating as a free enterprise system but incorporating the element of accountability
stakeholder capitalism
economic system in which corporations accept broader obligations beyond financial ones for shareholders
clean capitalism
economic system that incorporates the social, economic, and ecological benefits and costs, and actors know the full impacts of their actions
conscious capitalism
based on four pillars: higher purpose, stakeholder orientation, conscious leadership, and conscious culture
creative capitalism
places the resolution of social needs as a primary goal of economic activity, rather than as a secondary consequence
moral capitalism
principled capitalism with sustainable prosperity
inclusive capitalism
addresses growing income inequality, unemployment, falling social mobility, and poverty and the ways capitalism can alleviate it
progressive capitalism
recognizes the government’s role in making the market system serve society
