W4 - Governance, diversity and human rights Flashcards
Describe the Rana plaza incident
Human rights issues in the supply chain of major companies became visible when over 1,000 people were killed when Rana Plaza, a commercial building in Bangladesh collapsed in 2013 in which garment-production operated.
3 facts about modern slavery
- the international labour organisation reports that 27.6 million people in situations of forced labour, 3.3m of which are children
- Forced Labour is highest in low income countries, about 6.3 per 1000 people
- Most forced labour occurs in the private economy
Why is MS considered weakly enforced
- No fines for non-compliance – only the risk of commercial and reputational damage.
- May be viewed as a “tick box exercise”.
- Attempts made to improve enforcement by introducing significant fines have been unsuccessful
How many people listed ‘transfer pricing’ on their LinkedIn profile
330,000
Should a company pay taxes in a jurisdiction with a poor human rights record?
UN Human Rights: The payment of taxes in these circumstances does not on its own make a business “involved with” the violations of a government regime, even an illegitimate one
Corporate Governance OECD definition
A set of relationships between a company’s management, its board, its shareholders and other stakeholders. Corporate governance also provides the structure through which the objectives of the company
are set, and the means of attaining those objectives and monitoring
performance are determined
When is a director classified as independent.
If he or she has neither financial nor familial ties to the CEO or to the firm.
How truly independent are firms
87% of boards are conventionally independent but that only 62% are conventionally and socially independent
Does it make a difference when boards are conventionally and socially independent
Yes, firms whose boards are conventionally and socially independent award a significantly lower level of compensation and exhibit stronger pay-performance sensitivity and vice versa.
What is board effectiveness
High quality decision making due to a board with:
- Appropriate composition
- Good Skills
what is the model of board deliberation within a subgroup
- Board is divided into two opposing groups
- A pair of members is randomly selected
- Each member picks a position to argue
- Person who makes strongest argument ‘wins’, with everyone on board updating their prior accordingly.
- Relative differences between subgroups on the board - in powerful speech style and likelihood of violating turn-taking norms - can affect influence over board deliberation and voting.
Breifly summarise the Nike case and who was it by
Nike faced challenges related to labor practices in its supplier factories, including incidents of worker mistreatment and exploitation, leading to public scrutiny and pressure from various stakeholders.
The company’s sourcing practices and supply chain management were under scrutiny, with a focus on worker safety, fair labor practices, and environmental sustainability.
Nike’s response to these challenges involved implementing codes of conduct, conducting audits, and collaborating with industry initiatives to improve labor conditions and ensure compliance with ethical standards.
Global Sourcing at Nike, (Hsieh, 2019)
How does Nike’s approach to sourcing compare to that of competitors
Long-term Relationships: Nike emphasizes maintaining long-term relationships with its suppliers, some of whom have been producing Nike products for over 30 years.
Capability Building: Nike prioritizes suppliers that invest in capability building, helping them improve efficiency, productivity, and worker engagement.
Transparency and Collaboration: Nike has been proactive in sharing information about its supplier factories, even publishing the names of all its supplier factories in 2005.
Why has the nature of tax reporting changed
what reading did i get this from
Tax reporting is no longer just about compliance; it’s increasingly seen as a key indicator of a company’s commitment to social and environmental responsibility (ESG)
PwC, 2022
What is the UKs MS law
Modern Slavery Act - Section 54 - an organisation with revenues over £36m must publish an ‘Annual Slavery Statement’
