corporate Governance

1. How does Vodafones approach to Corporate Social Responsibility support the

Strategic Direction of the organization given the recent dynamic and turbulent
environment?
Modern day corporations are behaving in more responsible way than before and corporate
responsibility has become a hot issue than before. There are some businesses which are even
bigger than many nation states. According to 1991 figures three million people have been
employed by the worlds top ten organisations and their total sales figures are more than eight
billion dollars (Cannon, 1994). Vodafone is the largest British mobile company by revenues
and second largest company by subscribers after china mobile company. Vodafone has 45%
shares in Verizon (largest in America, 25 billion worth), American mobile company. (pg.
68).
The aim of the businesses should not be to impose war on nations as did in the form of
Hawkins and Drake. Now businesses behave much more reasonable and responsible way
towards society. Vodafone is well aware of the fact that, the only way to get the shareholders
value in long term is to incorporate corporate social responsibility into companys strategy
thus the public trust can be achieved. Vodafone does not take CSR as a philanthropic
approach but as a strategic tool. It follows CR strategy on every local unit and is connected
with its employees all the time and it is in support of team work between employees.
Vodafone constantly review its CR policy in implementation of the strategic initiatives.
Vodafone initiative to provide access to mobile phone connections to people from developing
countries is one smart decision the company took in this turbulent time. And the company
approach in rural-India connecting most parts of the deserted land with remote farmers is a
work of commendable success and I wonder whether these people know any other mobile
company than Vodafone. And the company is working with manufacturers like TCT/Alcatel,
Foxlink, Sagem and ZTE for affordable mobile phones. In India Vodafone introduced cheap
handsets (Vodafone 125, 225 and 226) those were very popular among middle and low
income Indian people.
Further, Vodafone contribution in war tone Afghanistan and poverty stricken Nigeria are of
strategic interest and they are among few to enter for the first time to those locations
(Vodafone Group CR report 2009). Nigeria was supported for its banking activities and
speeding the processing time and it helped many to attract to mobile phones service. The
company got a clear advantage in Nigeria strategy under the state patronage. Vodafone
worked in number of ways to reduce carbon footprints in the environment. The most famous
is the phone recycle project, where they issue a new phone plus the free connection for the
old one. This was a very much popular in Asia and company placed in an aggressive brand
promotion phase with this phone recycle project. Further their approach in networking in
leading companies has been able to reduce travelling and provided better options of meetings
connecting one end to the other. This is named as Green Travelling (Vodafone Group CR
report 2009).
Vodafone approach to customer care is remarkable and improved over the time. Especially in
giving protection to customer data, identity and privacy and priority giving to customer views
thoroughly differentiate Vodafone from the rest. And it is not surprise to see customers
moving in their way. Further Vodafone has been able to keep the phase by excellent service
and maintaining efficiency in operations by keeping in constant touch with other service
providers for accessories. The company always took the burden of checking the accessories
for its quality standards, human health aspects by minimizing magnetic field effects to users
and maintaining quality after sales service.

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So from the above account it is very much revealed Vodafone CSR has a direct link to the
company strategy and it not mere philanthropy.

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corporate Governance
2.

In what ways do you consider the organizations Corporate Governance system

might be changed if the monitoring of social responsibility became embedded in
the culture?

World has Passed through feudalism and industrialisation and today world is in the era of
globalisation. Present developed world of information has successfully shifted from
agricultural and industrial age which has given corporate governance a new edge and has
made organisations more responsible and more accountable (Davies, 1991). There has been
number of financial scandals which prompted that organisations activities should be
monitored and directed. Corporate Governance means directing and controlling the
operations of the corporation (Cadbury Report, 1992).
There is no hesitation for Vodafone has a sound CR reporting system following a bottom up
approach. It is very visible from the CR report the company has taken many social concerns
in regard financial and environmental. And it is shown in their implementation of the in the
field. Especially reducing the carbon foot prints their introduction of new technologies at
company level which was decision of the board that has worked well. It is important have a
resourceful secretarys office to support these activities at board level. This step will facilitate
further in getting feedback from the society on time to time and adjust the CR policy with
changing needs. Non executive directors (NEDs) access to the secretary is vital in getting
information of the external and internal environment as this will help further in providing
timely arguments when the issues are tabled in the board meetings.
If the Corporate responsibility is embedded in the governance strategy, there is a need to
make it a priority call for everyone in the board. Hence it is advisable to have a CSR
committee that specifically deal with organizations specific CSR matters and advice the
board accordingly. Thereby board can prioritise and extreme line CSR approaches by
providing a proper directions. Organizations economic responsibility of the board is another
area need to monitor and advice. As mentioned in the Turnbull report 1998, the internal
controls need to be more extreme line and for that the formation of a risk committee is a one
area that the Vodafone management can think of. This is very important to the company as
CSR initiatives and company business strategies are intertwined which is a speciality of the
Vodafone business strategy. And it is essential to have majority of NEDs in the risk
committee as they can avoid any bias situation and further counter argue the proposals for the
risk matters.
Organizations decision making is always a board- management joint function and the
accountability to the stake holders need to establish rather than focus alone shareholders
interest. Hence Vodafone board can evaluate the implications of them decisions onto the stake
holders. This practice is economically not viable but proves to be very helpful in evaluating
the amount of good being done to gain profits. This practice also helps the organizations to
make and maintain its image as a socially responsible corporation in the eyes of its stake
holders.

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Vodafone has to deal with ethical issues in cross-cultural settings. It is also said, two decades
ago that as more firms move into multinational operations, ethical issues tend to increase
(Murphy and Laczniak 1981,p 58). Actually, international corporations are often criticized for
ethical misconduct. In a cross-cultural environment, Businesses are exposed to different
values and ethical norms. The moral question of what is right or appropriate poses many
dilemmas for international businesses. Even within a host country, ethical standards are
frequently not defined or always clear (Cateora and Graham: 142).
Hence the Vodafone approach to ethical issues needs to be brought to the attention of the
board whether its internal or external in aetiology. Hence the reporting and monitoring of the
ethical standards must be a commitment of the board and this can be handled by the same
CSR committee itself. As a diverse organization spread around the world the ethical standards
like common working hours, same benefits, equal opportunities for promotions and job
security need to establish on common grounds and need to get feedback by the board on
regular basis to make sure zero deviation from the set protocols.

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