Chapter 15 - Chapter 15: CSR & Sustainability 1. New...

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1. New Expectations in the Governance of Organizations The original CG codes (dating from the early 1990’s) were voluntary Three significant changes: 1. CG compliance has increasingly become mandatory 2. Risk analysis and mgmt have become an integral part of the CG process 3. CG responsibility and sustainability have been added to the CG portfolio Society gave the entity a license to operate provided that it limited its activities to a specific set of activities Lawyers began to draft the constitutional documents (e.g. memorandum of associations) so widely that the activities of companies were no longer bounded so the behavior of corporations had to be constrained by law Friedman: Does a business have responsibilities? It is the role of the state to provide the legal framework that regulates companies’ behavior in relation to the rest of the community The debate continues about companies’ responsibilities to shareholders and other stakeholders Carroll (1979): four levels (1) economic responsibility, (2) legal responsibility, (3) ethical responsibility, (4) discretionary/philanthropic responsibility A distinction must be drawn between CSR, business ethics, and corporate philanthropy CSR raises a strategic concern about the nature and purpose of companies Socially responsible companies recognize a responsibility for their impact on all stakeholders,
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Chapter 15 - Chapter 15: CSR & Sustainability 1. New...

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