Stakeholder

Relationships,
Social
Responsibility, and
Corporate
Governance
Group #1
Nona Maharani Nenhea
Elier (190810301038)
Rizka Aulisti Enterpriselly
Isnaeni (190810301001)
Yosep (190810301134)
 THANK
Chapter Outline YOU

• Stakeholders Define Ethical Issues in Business

• Social Responsibility and Ethics

• Issues in Social Responsibility

• Social Responsibility and the Importance of a

Stakeholder Orientation
• Corporate Governance Provides Formalized
Responsibility to Stakeholders
• Implementing a Stakeholder Perspectiv
Stakeholders
Define Ethical Employees Customers

Issues In Bisnis Regulators

Managers
Eksternal

Internal
Boards of
direction Special interest group
Others who agree,
collaborate, and have
confrontations on
ethical issues
 Identifying Stakeholders
Primary Stakeholders
Are those whose continued association is
necessary for a firm’s survival. These
include employees, customers, and
shareholders , as well as the governments
and communities that provide necessary
infrastructure.
Secondary Stakeholders Stakeholders interaction
Do not typically engage directly in
model
transactions with a company
Indicates that there are two-way
and are therefore not essential to its
relationships between the firm and a host
survival. These include the media, trade
of stakeholders.
associations, and
special interest groups.
Examples of
stakeholder issues and
associated measures of
corporate impacts
A Stakeholder
Orientation
THEREE SETS OF ACTIVITIES

The organization- The distribution of The responsiveness

wide generation of this information of the organization as
data about throughout the firm. a whole to this
stakeholder groups Information.
and assessment of the
firm’s effects on these
groups.
 Social Responsibility & Ethics

What is Social Responsibility and Ethics?

 Social Responsibility, is an organization’s obligation to maximize its positive impact on

stakeholders & minimize negative impact.
 Business ethics, involves care-
fully thought out rules that guide
decision making

Level of Social Responsibility

Also known as Steps of Social

Responsibility
Issues in Social Responsibility

Consumer
Social Issues Protection
Associateed with Often occurs in
the common good the form of laws
and deal with passed to
concerns that protect
affect large cosumers from
segments of unfair and
society and the decepive
welfare of our business
entire society practices
Issues in Social Responsibility

Corporate
Sustainability
Governanve

Defined as the Involves the

potential for development
the long-term of formal
well-being of system of
the natural accountability,
environment as oversight and
a stakeholder control
Social Responsibility & the Importance of a
Stakeholder Orientation No. Best Corporate Citizens

 Basic mission of business is to produce 1 Microsoft Corporation.

goods and services at a profit, and making its

maximum contribution to society and being 2 Hasbro

socially responsible – Milton Friedman

3 Johnson & Johnson

 One study found, when firms were placed on

4 Xerox Corp.
socially responsible index, stakeholders
reacted positively. It means, caring about the
5 Sigma-Aldrich Corp.
well-being of stakeholders leads to increased
profits
6 Bristol-Myers Squibb

Source: CR’s 100 Best Corporate Citizens 2015

Source: Microsoft 2019 Annual Report
CORPORATE GOVERNANCE PROVIDES FORMALIZED
RESPONSIBILITY TO STAKEHOLDERS
What is Corporate
Governance?
Corporate Governance is the formal system of accountability and control of ethical
and socially responsible behavior.

Accountability refers to how closely workplace

01 decisions align with a firm’s stated strategic direction

and its compliance with ethical and legal
considerations.

02
Oversight provides a system of checks and balances
that limit employees’ and managers’ opportunities to
deviate from policies and strategies aimed at
preventing unethical and illegal activities

03 Control is the process of auditing and improving

organizational decisions and actions.
 Views of Corporate
Governance
#1 Shareholder model of corporate governance
• Maximizing wealth for investor.
• Drive a firm’s decisions toward serving the
best interest of investors.
• Needed to align investor and management
interests.
#2 Stakeholder model of corporate governance
• Adopts a broader view of the purpose of
business.
• Must choose the primary stakeholder.
• Creating governance systems that
consider stakeholder welfare in tandem
with corporate needs and interest.
 The Role of Board of
Directors

• For public corporations, boards of directors hold the ultimate

responsibility for their firms’ success or failure, as well as the ethics of their
actions.
• Board members have a fiduciary duty.
• Directors do not face serious consequences for corporate misconduct.
• The traditional approach to directorship assumed board members
managed the corporation’s business.
 Greater Demands for
Accountability and Transparency

• Many of the corporate scandals uncovered in

2000
1000
recent years.
• Shareholder involvement in changing the makeup
of boards has always run into difficulties.
• The concept of board members being linked to
more than one company is known as an
interlocking directorate.

>1
22000
USA
>4

by USA Today
 Executive Compensation

Deciding executive Ensuring the integrity of

compensation. > the company’s financial
reporting systems.
 IMPLEMENTING A
STAKEHOLDER PERSPECTIVE
#4 Assessing Organizational
#1 Assessing the Commitment to
Corporate Stakeholders and Social
Culture Responsibility

#2 Identifying #5 Identifying Resources

Stakeholder and Determining
Groups Urgency

#3 Identifying #6 Gaining
Stakeholder Stakeholder
Issues Feedback
THANK YOU

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