Corporate Social Responsibility And Corporate Government Flashcards
1
Q
Corporate social responsibility
A
Voluntary steps taken to improve quality of life and welfare of all stakeholders (employees, customers, suppliers, community and competitors)
2
Q
Corporate social investment
A
The resources (money, manpower,products, machinery, premises) that businesses spend on the community to improve the standard of living
3
Q
Sustainability
A
- the ability to be maintained at a certain level
- sustainable projects are products that continues without the presence of the business
- example of sustainable products:
1. Vegetable garden that the community is taught to maintain
2. ABET (Adult basic education and training) classes
3. Teaching entrepreneurial skills
4
Q
CSR benefits for business
A
- helps recruit best employees
- gives a favourable image of the business
- builds employee loyalty
- creates customer loyalty
- attractions investors
5
Q
CSR problems for the business
A
- business does not always have the skills to solve societal problems
- CSI costs a lot of money which a small business may afford to budget for.
- CSR is time consuming, which may distract employees from meeting targets and deadlines
- the community may have high expectations. If expectations are not met it will result in bad publicity
- managers may not be trained and lack experience to handle social programmes
6
Q
Benefits for community
A
- improves the quality of life of the community through provision of economical and social development opportunities.
- generates employment through skills development
- provision of education and training to enhance employment opportunities
- changes future of employees and their families by providing bursaries
- improvement and or building of infrastructure in community
7
Q
Problems for community
A
- Community may not take responsibility for their own actions because they assume the business CSR initiatives will provide for them
- The community may become dependant on CSR initiatives
- Some CSR initiatives are not sustainable which mwanza that the project will collapse/stop should the business leave
- Some businesses may use CSR initiatives to distract the public from other unethical issues the business may be involved in.
- Spending money on CSR means that the money has to be recovered elsewhere, this may lead to higher priced on goof and services which will negatively impact the economy.
8
Q
Poverty
A
- Poverty is the state of having little or no money as well as few or no material possessions
Two levels will be discussed: - Extreme poverty
- moderate or subsistence poverty
9
Q
Extreme poverty
A
- people who constantly struggle to survive
- incapable of fighting diseases due to lack of nutrition or medical care
- have little to no access of education, medical care or other basic human needs
- particularly devastated by additional disasters such as storms or droughts
10
Q
Modern or subsistence poverty
A
- These people have little income and face chronic financial hardship
- lack basically necessities such as clean water, medical facilities and sanitation
11
Q
Triple bottom line
A
- Known as reporting on the 3P’s: 1. Profit, 2. People (not employees in this case) and 3. Planet
12
Q
King code and corporate governance
A
Currently have king code IV
- It requires companies to apply and explain which recommended practices business has adopted and how they have been adopted as well as which ones business plans on implementing in the future.
- States that Board of Directors is accountable to ensure the following outcomes are achieved:
1. Ethical culture
2. Good performance
3. Effective control
4. Trust and good reputation
13
Q
A governance framework
A
- should be set out as code of principles and practices
- companies should not be narrow minded about corporate governance but operate in an accountable and responsible manner
- JSE has made it compulsory for all listed companies to comply with the king code by introducing JSE SRI criteria
- directors must conduct themselves within the boundaries of the law
- they must act with care, skill, diligence etc.
14
Q
Primary characteristics of good governance
A
- Transparency
- Independence
- Accountability
- Fairness
- Integrity
- Discipline
- Promoting ethical and responsible business decisions
- Social issues
- Duties and responsibilities of directors
- Sustainability as part of the king code
15
Q
Benefits of good corporate governance
A
- maintains investor confidence
- minimises wastage, corruption, risks and mismanagement
- helps with company brand formation and development
- provides incentives to owner and management to achieve objectives
- is a positive impact on share prices and SRI rating
- helps company in lowering capital acquisition costs
- ensures corporate success and economic growth
- contributes to political stability and enhanced international relations
