Corporate Governance and CSR Case Study - Nestle Flashcards
Define CSR
Is a company’s various voluntary initiatives towards its different stakeholders such as customers, suppliers, employees and communities
Explain the relationship between CSR and CG
CG comprises of the structures that specify the rights and responsibilities among the parties with a stake in the firm, affecting financial and non financial outcomes
CSR encompasses the policies and practices that firms put in place to improve the social state and wellbeing of stakeholders
Explain the GRI standards MNE’s use in their CSR
Internal controls - where a firm sets up internal controls to strengthen the integrity and credibility of its sustainability reporting. Can be implemented in day to day operations through compliance functions
External assurance - where a firm looks to an external provider to assess the quality and credibility of reporting, to increase trust in the information provided
Explain how CG can differ between LME’s and CME’s - Zaman
LME’s involve countries such as the UK and US where national institutions encourage individualism and firms coordinate their activities through the market mechanism
CME’s involve countries such as Austria and Sweden where there is an emphasised collectivism, with heavy reliance on non market forms of coordination
Explain Nestle’s CG strategy
Has traditionally been a stance of neutrality in world conflicts. Seen in WW2 where firm aligned with home country, Switzerland, stance to remain neutral and continue to supply to Germany and France
Nestle’s CG revolves around sustainable value creation with a focus on global sustainability and innovation that creates value to all stakeholders.
Explain the situation with Nestle and Russia
In 2022, Nestle withdrew its Kit Kat bar from sales in Russia in response to the Ukraine invasion, although not its baby food and medical nutrition as it was deemed essential
This was considered strange by the NY times as Nestle had continued to operate in other war zones globally.
Nestle withdrew their products later than other firms such as Boeing, Disney and Dior
How did Nestle develop its CG role
To develop their social role, Nestle became enthused with the shared value concept of Porter, the idea of creating policies and practices that enhance competitiveness and advance the economic and social conditions of the communities it operates in.
This led to Nestle following the idea that long term sustainable value creation cannot be done at the expense of other stakeholders.
Why did Nestle eventually leave Russia
Pressure from Ukranian president and ministers
Threats of boycott online
Pressure from Swiss government and citizens
Was Nestle able to maintain their CSR stance
It can be argued that nestle was able to meet their CSR responsibilities whilst maintaining neutrality.
Only products essential to human life were sold in Russia and all other products removed caused a hinderence to the Russian economy
