Week 1

Question 1

what are the six capitals?

Answer 1

• financial
• manufactured
• intellectual
• human
• social & relationship
• natural

Question 2

what do the six capitals do?

Answer 2

store value and can be input & output

Question 3

what is financial capital?

Answer 3

pool of funds available for an org to use in the production of goods / provision of services

Question 4

what is manufactured capital?

Answer 4

manufactured physical objects available for an org to use in the production of goods and providing of services

Question 5

what is intellectual capital?

Answer 5

organisational, knowledge-based intangibles (incl intellectual property) protected by law and kept within the business

Question 6

what is human capital?

Answer 6

people’s competencies, capabilities and experience, and their motivations to innovate

Question 7

what is social and relationships capital?

Answer 7

institutions and relationships within and betw groups, comms, stakeholders, and their ability to share info

Question 8

what is natural capital?

Answer 8

all environmental resources and processes that provide g/s that support org prosperity

Question 9

what is an input?

Answer 9

the capitals the org draws upon for its business activities

Question 10

what is a business activity?

Answer 10

the planning, design and manu of products or deployment of special skills and knowledge (service provision)

Question 11

what is an output?

Answer 11

products/services and any by-waste

Question 12

what is an outcome?

Answer 12

int/ext consequences (+/-) for the capitals as a result of an org’s activities

Question 13

input/output sequence?

Answer 13

input > bus activities > output > outcome

Question 14

what are some factors which may affect value creation ability?

Answer 14

• ext env
• purpose, mission, vision
• governance
• business model

Question 15

what is the external environment?

Answer 15

env ext to the bus that it has no control over

Question 16

what does purpose, mission and vision depend on?

Answer 16

the intention of the business – profit making, creating SH value

Question 17

what is governance?

Answer 17

how the company is run / managed

will create value better if it has

Question 18

what is the business model?

Answer 18

the way in which a company is actually run – franchise

Question 19

what is the King IV Report?

Answer 19

a standard on corp gov principles which provide principles and practices that orgs are recommended to follow. not legislation, but some parts compulsory for JSE comps.

Question 20

what are the fundamental concepts of King IV?

Answer 20

• sustainable development
• integrated thinking
• the org as an integral part of society
• stakeholder inclusivity
• corporate citizenship
• integrated reporting

Question 21

what is sustainable development?

Answer 21

development that meets present needs without affecting future resources

Question 22

what is integrated thinking?

Answer 22

taking into acc the connectivity and interdependence of all the factors that affect an org’s ability to create value

Question 23

what does integrated thinking lead to?

Answer 23

integrated decision making that consider short, medium and long term

Question 24

how is the org an integral part of society?

Answer 24

the org and society can both have +/- effects on each other

Question 25

what is stakeholder inclusivity?

Answer 25

the org needs to have a regard for the needs and ints of material stakeholders

Question 26

what does corporate citizenship mean?

Answer 26

the org has rights, obl, resp toward society and the natural environment

Question 27

what is integrated reporting?

Answer 27

concise communication about how an org’s strategy, gov and performance in the ext env lead to value creation

Question 28

what is corporate governance?

Answer 28

the framework of rules and practices for the BoD to follow to ensure the comp meets its goals in a fair and sustainable way that considers all stakeholders

Question 29

why is good corporate governance important?

Answer 29

helps a company to:

• achieve its goals
• drive improvement
• remain sustainable