live soft skills

STAKEHOLDER ACCOUNTABILITY If we believe that stakeholders are important, and if we believe that stakeholders may also have some responsibility for company behaviour, we need to ensure that companies are reporting adequate information to these stakeholders. Over recent years, company Annual Reports have grown massively in size, and part of this growth has been in non-financial reporting . Triple Bottom Line But this raises additional issues: reporting refers to the growth in Social and Environmental disclosures alongside financial disclosures. o Are there any "rules" on what should be reported? o Will there therefore be any comparability year on year, or within industries? o Will information reported be balanced ... or will it inevitably be more positive than negative? o There have been developments in these areas in recent years. Environmental accounting and audit frameworks (such as EMAS and ISO14000) have been developed to provide some guidance. Auditing information i

CORPORATE SOCIAL RESPONSIBILITY Much of the above analysis helps to split stakeholders into different types, but does not spend long looking at the moral aspect. As companies have grown into multinational organisations, their ability to affect the world and how society operates has grown as well: ● Companies can change the way society works Should companies consider stakeholders at all, and if so, which ones? o Mobile phones o Email o ● Companies pollute the environment, and big companies can have a noticeable effect on their local community ● A big company in a community will be a major employer – decisions it takes could be the main influence on the prosperity of the community ● Companies who use low cost countries for supplies and services could be seen to be keeping those countries low cost … which could mean they are keeping wages down to what might be viewed as unacceptably low levels Facebook So how much responsibility do these companies have for their actions? Should we

Agency theory and stakeholder theory Shareholders ( There is a risk that the directors do not run the company in the best interests of the shareholders … and this is the potential The question is, is this necessarily a problem at all… Earlier in the course, we defined corporate governance as "running the company in the best interests of shareholders ● Who are these other stakeholders? ● To what extent should / could / must the Board take them into consideration? ● What if what is good for one stakeholder is bad for another stakeholder? ● What if what is good for shareholders might be viewed as principals ) employ directors ( agents ) to run the company for them. agency problem . and other stakeholders ". This raises a number of questions: unethical behaviour ? Types of stakeholder Later in the chapter, we will look at the extent to which organisations might want to deal with different stakeholders. But before we do this, we need to consider It may be the case that di