Professional Documents
Culture Documents
1
MAP OF CORPORATE STAKEHOLDER ACCOUNTABILITY
Shareholders
Activists Employees
Lenders &
Creditors Suppliers
Credibility Reliability
Corporate
Reputation
Trustworthiness Responsibility
Fombrun, p. 72
TABLE 1.1
FACTORS AFFECTING PUBLIC EXPECTATIONS FOR BUSINESS BEHAVIOUR
Unbridled greed Subprime lending fiasco, CEO over-compensation
Physical Quality of air and water, safety
Moral Desire for fairness and equity at home and abroad
Bad judgments Operating mistakes, executive compensation
Activist stakeholders Ethical investors, consumers, environmentalists
Environmental Reality Environmental degeneration, need for sustainability
Economic Weakness, pressure to survive, to falsify
Competition Global pressures
Financial malfeasance Numerous scandals, victims, greed
Governance failures Recognition that good governance & ethics risk assessment
matter
Accountability Desire for transparency, corporate social responsibility (CSR)
Synergy Publicity, successful changes
Institutional reinforcement New laws – environment, whistle-blowing, recalls, U.S. Sentencing
Guidelines, OECD anti-bribery regime, Sarbanes-Oxley Act (SOX)
reforms, professional accounting reform, globalization of standards
(IFAC, IFRS) and principles (Caux), Dodd-Frank Wall Street
Reform & Consumer Protection Act
Stakeholder Analysis Preview:
•Ranking stakeholders is the first step. Shareholders are stakeholders but not the only stakeholders in the operations of a
company.
• Corporate charters direct the management of a company to look after shareholders and outside laws, regulations and
“pressures” require a company to consider the company’s rights and obligations to others besides shareholders.
•Insight and detailed analysis of the principles of stakeholder management can be found at
http://www.blissbooks.co.uk/documents/254255.pdf
CORPORATE SOCIAL RESPONSIBILITY: Across the globe, business leaders are struggling to balance conflicting demands
from communities, government, advocacy groups, and others about the role they play in economic advancement,
environmental improvement, and social development. No longer is it acceptable simply to make good products that satisfy
customers while complying with laws and regulations. Businesses are now called upon to consider – and, indeed,
intentionally to manage – the wider social and environmental consequences of their actions, beyond the requirements of
the legal and regulatory settings in which they operate.
http://charlesrivercentre.com/brochures/CSR-20080421-NC.pdf
Ethics versus Morals
Ethics and morals relate to “right” and “wrong” conduct.
Many times they are improperly interchanged. They are different:
Ethics refers to rules provided by an external source, e.g., codes
of conduct in workplaces or or principles in religions.
Morals refer to an individual’s own principles regarding right and
wrong.
http://www.diffen.com/difference/Ethics_vs_Morals
TABLE 1.2
HYPERNORMS (BASIC VALUES)
UNDERLYING STAKEHOLDER INTERESTS
Honesty Fairness
Compassion Integrity
Predictability Responsibility
Source: R. Berenbeim, Director, Working Group on Global Ethics Principles, The Conference Board, Inc., 1999
TABLE 1.4
IMPORTANT RISK MANAGEMENT TERMS
Risk is the chance of something happening that will have an impact on
objectives.
Risk Management includes the culture, processes, and structures that are
directed towards the effective management of potential opportunities
and adverse effects.
Risk Management Process includes the systematic application of
management policies, procedures, and practices to the tasks of
establishing the context, identifying, analyzing, assessing, managing,
monitoring, and communicating risk.
Source: Managing Risk in the New Economy, AICPA & CICA, 2001, p. 4
TABLE 1.6
STAKEHOLDER REPORT TOPICS
Health and Safety Environmental Performance/Impact
Sustainability Corporate Social Responsibility (CSR)
Philanthropy Workplace Responsibility