Chapter 5 Flashcards
(35 cards)
What does CSR stand for
Corporate Social Responsibility
What is the core principle of CSR
It deals with how business organisations can meet essential needs without dishonouring community values
What are the 4 key categories of CSR
Environmental responsibility - environmentally-friendly manner, reduce pollution, offsetting negative impacts
Ethical responsibility - fair and ethical way towards stakeholders
Philanthropic responsibility - making world a better place
Economic responsibility - moving goals away from profit maximisation
What does CC stand for
Corporate Citizenship
What does CSI stand for
Corporate Social Investment
What does the Triple Bottom Line refer to
Company’s ultimate worth should be measured in financial, social and environmental terms
What are the themes of CSR in contemporary business management
- Virtual community engagement (COVID 19)
- Measuring CSI impact
- Role model behaviour
- A focus on sustainability
- Necessity of equity and diversity
- Employee volunteer programmes
Elaborate on the theme of virtual community engagement under CSR in contemporary business management
COVID 19 changed how businesses communicate with stakeholders. Virtual meetings lowered operation costs and increased accessibility. Technology increased virtual volunteerism.
Elaborate on the theme of measuring CSR impact under CSR in contemporary business management
CSR impact is measured through employee engagement, social return on investment, customer growth and intention. Many companies publish sustainability reports and financial reports
Elaborate on the theme of role model behaviour under CSR in contemporary business management
People want businesses to do more to impact the environment and to be vocal about important topics
Elaborate on the theme of “a focus on sustainability” under CSR in contemporary business management
People want brands and employers to use more ethical operational practices that are better for the environment
Elaborate on the theme of necessity of equity and diversity under CSR in contemporary business management
People want to have fair opportunities and to be included. Businesses are focusing on trust, commitment and a safe environment for all employees
Elaborate on the theme of employee volunteer programmes under CSR in contemporary business management
Corporate volunteerism builds team morale, increases job satisfaction and play an active role in communities. People want to work for employers who are morally responsible
What are the drivers behind CSR
- Social drivers
- Governmental drivers
- Market drivers
- Ethical drivers
Elaborate on the social driver of CSR
Businesses want to be thought of as socially responsible. Consumers and employees prefer socially responsible businesses. Social responsibility even impacts financial aspects such as trading shares. Civil society organisations work with businesses to develop standards as to how socially responsible corporations should act.
Eg: Organisation for Economic Co-operation and Development (OECD)
Guidelines for Multinational Enterprises
United Nations Guiding Principles
Global Reporting Initiatives
Elaborate on the governmental driver of CSR
Local and national legal systems companies must comply with. Legislation about companies, labour relations, environmental management. Governments encourage CSR programmes often providing organisational support and subsidies. Laws can often encourage social responsibility. Companies must comply with the spirit of the law not just the letter of the law. Complying with the spirit of the law means doing what can reasonably be expected to further the objectives of the legislation.
Elaborate on market drivers of CSR (reduce costs)
CSR can reduce costs or increase revenues.
Companies reduce costs through:
* Avoiding fines
* Avoiding legal costs
* Using resources efficiently
* Using alternative raw material sources
* Reducing recruiting costs
* Increasing staff retention
* Reducing the cost of capital
Elaborate on market drivers of CSR (increase revenue)
- Developing new products/services eg carbon credit trading
- Growing markets for services through general programmes such as job creation or specific interventions
- Improving access to markets
- Avoiding boycotts
- Exploiting the CSR premium (charging a higher price for socially responsible products)
Elaborate on ethical drivers of CSR
About deciding what is right and wrong in the workplace and in business generally.
Working towards the common good. Some see the market system as a subset to the social system and believe that enterprises have a social responsibility as well as a legal and economic responsibility. Ethical responsibility applies both internally and externally.
Define corporate governance
The system by which companies are managed and controlled. Refers to the relationship between the governed and the governing.
What is the focal point of corporate governance
The board of directors. Management is then responsible for implementing the strategies
Primary roles of a governing body
- Ensures accountability for organisational performance by meands of, amongst others, reporting and disclosure
- Oversees and monitors implementation and execution by management
- Approves policy and planning that give effect to the strategy and sets the direction
- Steers and sets strategic direction regarding the organisations strategy and the way in which governance are approached, addressed and conducted
Important codes of principles of corporate governance compliance
- King IV Report
- OECD principles
- Four King Committee Reports
- The Institute of Directors
Primary principles of good governance
- Adopt a stakeholder-inclusive approach in the execution of its governance role and responsibilities that balances the needs, interests and expectations of material stakeholders in the best interest of the organisation over time.
- Ensure that responsible investment is practiced by the organisation to promote the good governance and the creation of value by the companies in which it invests.
- Govern compliance with applicable laws and adopt non-binding rules, codes and standards in a way that supports the organisation being ethical and a good corporate citizen.
