Unit 3 Flashcards
What is responsible leadership?
Ensuring sustainable success and taking ownership of the consequences of business activities on economic, social, and environmental levels.
Define corporate sustainability.
Support for sustainable development and the long-term performance, stability, and survival of the organisation.
What is corporate citizenship?
The concept that a company is a person and should operate in a sustainable manner while addressing social responsibilities.
What is corporate governance?
The exercise of ethical and effective leadership by the governing body towards achieving ethical culture, good performance, effective control, and legitimacy.
Explain the agency problem.
The separation between ownership of capital and management leads to managers acting in their own best interests rather than those of the owners.
What are the four kinds of Strategic Corporate Social Responsibility (CSR)?
- Strategic CSR
- Ethical CSR
- Altruistic CSR
- Coerced CSR
What does the triple bottom line measure in corporate sustainability?
- Economic impact
- Social impact
- Environmental impact
What is the focus of early corporate governance theory compared to current focus?
Current focus includes broader principles of economic, social, and environmental performance.
What are the signs of ethical collapse in corporate governance?
- Pressure to meet the numbers
- Far away and silent
- Sycophantic executives and an iconic CEO
- A weak board
- Conflicts of interest
- Overconfidence
- Social responsibility as the only measure of goodness
What is the purpose of the King Reports on corporate governance?
To provide principles and practices for good financial, social, ethical, and environmental practices.
What are the primary characteristics of good corporate governance as per the King II Report?
- Discipline
- Transparency
- Independence
- Accountability
- Responsibility
- Fairness
- Social responsibility
What does the King III Report emphasize?
- Effective leadership
- Sustainability as a primary imperative
- Corporate citizenship
- Implementation of sustainability reporting
Fill in the blank: Corporate governance should be based on _______.
[sound ethical values]
What are the governance outcomes linked to good corporate governance?
- Ethical culture
- Good performance
- Effective control
- Legitimacy
How does corporate governance relate to strategy?
It influences the formulation, implementation, and control of strategic management.
What is the role of the board of directors in corporate governance?
Overseeing strategy implementation and ensuring effective governance.
What major changes did South African organisations face after 1994?
Exposure to a new political system, rapid trade liberalisation, and regulatory reform.
True or False: The Sarbanes-Oxley Act of 2002 is an example of corporate governance legislation in South Africa.
False
What is the focus of the King IV Report on Corporate Governance?
Ethical leadership, integrated thinking, corporate citizenship, stakeholder inclusivity, and integrated reporting.
What is Strategic CSR?
Voluntary CSR actions that benefit society while enhancing an organisation’s competitiveness and reputation.
What does ethical CSR focus on?
Doing the right thing by upholding ethical standards, regardless of profitability.
What does Altruistic CSR involve?
Engaging in philanthropy or social causes purely for the benefit of society.
What occurs in Coerced CSR?
Companies engage in CSR due to legal requirements or external pressure.
What is the legacy of apartheid as mentioned in the King III Report?
It is fundamentally unsustainable, necessitating social transformation and redress.
What should a risk-based approach in corporate governance focus on?
Adopting a risk-based approach rather than purely legal compliance.
