Csr and Code of Ethics

7/31/2019 Csr and Code of Ethics

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Corporate

SocialResponsibility


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Definition

CorporateSocialResponsibility Thedutyofacorporationtocreatewealthinwaysthatavoidharmto,protect,orenhance

societalassets.

1960 Appearedinacademicliterature.

Ithasnoprecise,operationalmeaning. Itisprimarilyapoliticaltheory,notamanagementoreconomictheory,becauseitscentralpurposesaretocontrolandlegitimizetheexerciseof

corporatepower.


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CorporateSocialResponsibility

Differentdefinitions Istheextensionofthecorporaterolebeyondeconomicpursuits.

Corporationhasresponsibilitythatextendbeyondtheproductionofgoodsandservicesataprofit.

Asmembersofsociety,organizationsshouldactivelyandresponsiblyparticipateinthecommunityandinthelargerenvironment.


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FundamentalIdea

Corporationshavedutiesthatgobeyondcarryingouttheirbasiceconomicfunctioninalawfulmanner.

Butazoneofdiscretioninevitablyremainsandthefirmmusttherefore,voluntarilytakeadditionalactionstomeetitsfullobligationstosociety.


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Thus:CSREvolvedinto!

Torequiremoreexpansiveactionbycompanieslargelybecausestakeholdergroupshavegainedmorepowertoimpose

theiragendas,butalsobecausetheethicalandlegalphilosophiesunderlyingithavematuredtosupportbroaderactionby

managers.


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BasicElementsofSocialResponsibility

3Principleelements:MarketActions

Externallymandatedactions

Voluntaryactions


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MarketActions

Arecompetitiveresponsestoforcesinmarkets.Whenacorporationrespondsto

markets,itfulfillsitsfirstandmostimportantsocialresponsibility.

Criticsbelievethatcertainbusinesses,

forinstance,gambling,defense,tabacco,animalagriculture,andalcohol,areirresponsiblenomatterhowprofitableyouare.


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MarketActions

Thus: Suchjudgmentdonotinvalidatethegeneralrulethattheoverridingimpactof

acorporationonsocietyoriginatesinnormaloperations.


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MandatedActions

Areprogramsrequiredeitherbygovernmentregulationorby

agreementsnegotiatedwithstakeholders,suchasunioncontractsorcodesofconduct.


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VoluntaryActions

Thisactionsgobeyondlegal,regulatory,ornegotiatedmandates. Theysometimescallitlegalplusbecausetheyexceedrequiredmandates.

Ex.Charitablegiving

Actionsareunrelatedtomandatesbut

respondtopublicconsensus. Ex.BenettonGroup(anti-deathpenaltyadcampaign)lateritwasboycottedbyconsumersorthoserelativesofmurderedchildren.


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GeneralPrinciplesofCorporateSocialResponsibility

1.Nouniversalrulesbutbelowaresomeguidelines

Corporationsareeconomicinstitutionsrunfor

profit. Thisisthegreatestresponsibilitywhichprovideeconomicbenefits.


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2.Allfirmsmustfollowmultiplebodiesoflaw. TheseLawsare:

CorporationLawandcharteringprovisions

Thecivilandcriminallawsofnations Bodiesofregulationthatprotectstakeholders

InternationalLaw


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InternationalLaw

ThepurposesofInternationalLaw: Resolutionofproblemsofaregionalorglobalscope(suchasenvironmentalpollutionorglobalwarming),

Regulationofareasoutsidethecontrolofanyonenation(suchasouterspaceorthehighseas),and

Adoptionofcommonrulesformultinationalactivities(suchasairtransportorpostalservice).

Internationallawalsoaimstomaintainpeacefulinternationalrelationswhenpossibleandresolveinternationaltensionspeacefullywhentheydevelop,topreventneedlesssufferingduringwars,andtoimprovethehumanconditionduringpeacetime.


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UnitedNationsSecurityCouncil


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InternationalLaw

Internationallawbeganasasystemgoverningtherelationsamongsovereignstates,andstateshavealwaysbeentheprimarylegalentitiesaffectedbyinternationallaw.

Astheglobalsystemhasbecomemorecomplex,however,internationallawhascometorecognizeandregulateinternationalorganizations,businesses,nonprofitentities,andindividuals. Theemergenceofinternationalhumanrightslawand,more

recently,internationalcriminallawreflectsthefactthatindividualstodayaredirectsubjectsofinternationallawincertainrespects.


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3.Corporationshaveadutytocorrecttheadversesocialimpactstheycause.

Theyshouldtrytointernalizeexternalcosts.

Externalcostsisacostnotpaidbyafirmoritscustomers,butbymembersofsociety.

Ex.Afactorydumpingtoxiceffluentintoastreamcreatescostssuchashumanandanimaldiseaseimposedoninnocents,notonthecompanyoritscustomers.


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4.Socialresponsibilityvarieswithcompanycharacteristics. Suchas:

Size Industry

Strategies

Marketingtechniques

Locations Internalculture

Stakeholderdemands

Managersvalues


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5.Managersshouldtrytomeetlegitimateneedsofstakeholders.

Primaryresponsibilityare:

Customers Stockholders

Employees

Secondaryresponsibilityare: Government

Communities


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6.Corporatebehaviormustcomplywithnormsinanunderlyingsocialcontract.

Tounderstandthiscontractmanagerscan

studythedirectionofnationalpoliciesandglobalnormsasevidencedinlegislation,regulations,treaties,tradeagreements,declarations,andpublicopinion.


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7.Corporationsshouldacceptameasureofaccountabilitytowardstakeholdersandpubliclyreportontheirmarket,mandated,

andvoluntaryactions. Thisistoshowtransparencyoftheorganizationcorporateactivitiestotheirstakeholdersandotherpeoplewhohaveinteresttothesaidorganization.


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CorporatePhilanthropy

Philanthropy Isconcernforthewelfareofsocietyexpressedbygiftsofmoneyorpropertytotheneedyorto

institutionsthatadvancesocialwelfare. Ex.Charityworks


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PatternsandMagnitudesofCorporateGiving

Charitablegivingisnowastandarddimensionofcorporatesocialresponsibility.

Thebasicmotivesforthisareresponsetopressure,beliefthatitwillmonetaryprofit,desireforreputationalgain,andaltruism,orself-lessconcernforthewelfareofothers.


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StrategicPhilanthropy

Theactofphilanthropypresumeaself-lessmotiveofgivingoutmoraldutytobenefittheneedy.

Companiesgavetohelpthedestituteanddeservingwhilefundingsocialgoodssuchaseducationandthearts.

Thusitwasrecognizeandhelpedcorporate

reputations,createdgoodwill,andimprovetheeconomybystrengtheningsociety.


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ExampleofStrategicPhilanthropy

Matteldonated$25milliontoputitsnameonthechildrenshospitalatUCLA,nowcalledMattelChildrensHospital.Thecompanyhasnoroleinrunningthehospital,althoughitgivestoysto

patients.Itslargegiftcontributestoacompassionatecorporateimageamongtoybuyers.Addingthecompanynametothehospitalincreasesbrandrecognition.These

benefitsreinforcethecommercialgoalsofatoycompanywhilealsohelpingsickchildren.


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SourcesofPressureforSocialResponsibility

Communities

Competitors AdvocacyGroups

Stockholders/Investors

Customers

Employees

Events/Crises

Governments

MultilateralOrganizations

PhilanthropicRequests


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KeyElementsofManagingtheSocialResponse

Leadership MissionStatements

ManagingSocialIssues

TheLifeCycleofIssues

AlignmentofStructure,Culture,andProcesses

CorporateSocialReporting


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ConstraintsinBusinessPractices

Corporateculturessustainvaluesandbeliefsthatinfluencehowpeoplerelatetooneanother.

3DifferenttypesofControlsorconstraints

CommitmentofTopManagement

CodesofEthics

CompliancePrograms


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CommitmentofTopManagement

Leadersmustshowcommitmentbecausetheyactasarolemodelsandtheyteachbyexample.

Ethicalbusinessmustbecarefullyplannedandcontinuouslymonitoredbycommittedexecutivesandmanagers

withtheexpertisetoinstillinallmembersoftheorganizationtheimportanceofethicalbehavior.


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3stepsthattopmanagerscantaketodiscourageunethicalbehavior. Drawacleanlinebetweenthebehavioryoull

tolerateandthebehavioryoullhavetopunish.

Investthetimeandmoneyinmakingsurethatthosedistinctionsareunderstoodandremembered

PutthefearofGodintowould-beviolatorsbyconspicuouslyraisingtheriskofexposure.

Punishingwrongdoersfairlyandswiftly.


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CompliancePrograms

Thisisenforcementofcodesofethicsandconduct.

Ifnoenforcementthenthecodesofethicswill

justbewordsonpaper. Compliancetrainingmustbegiventhatalertspeopletopolicies,regulations,and

lawsthatestablishacceptablebehaviorwithinacompany.


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HowCompaniesContributetotheirCommunities

Donatetheirproducts Involveemployeesintheactivity.

Involveothercompanies.

Leveragethecompanysexpertise

Enlistsuppliersandcustomers


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ApproachestoSocialResponsibility

1. TheResistanceApproach Whentheyactivelyfighttoeliminate,delay,orfend

offthedemandsbeingmadeonthem.

2. TheReactiveApproach Theywaitfordemandstobemadeandthen

respondstothembyevaluatingalternatives.

3. TheProactiveApproach

Companiesarecontinuallylooktotheneedsofconstituents,constantlystayingintouch,sensingtheirneeds,andtryingtofindwaystoassistthem.


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ResponsibilitiestoStakeholders

Stakeholders Thosewhohaveaninterestinorwhoareaffectedbyhowabusinessconducts

itsoperations. Ownersandstockholders

Employees

Customers Suppliers

Communities


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Owners Assetsmustbeconservedandusedeffectivelyandefficiently

Employees Shouldenjoyequalaccesstotherights,responsibilitiesandprivilegesaffordedbyemployers.


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Customers Businessandtheiremployeesowefairandhonestrepresentationoftheirproductsandservicestotheircustomers.

Supplies Suppliersandbusinessshouldbuildrelationshipbasedonmutualtrust.

Communities Concernonthequalityoflifeinacommunity,itsair,land,andwater,itsspecificneedsallcometoplay.

F Sh i F


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ForcesShapingFutureBusiness

Better-qualitymanagement Betterproduction

Growinguseoftechnology

Useofcomputers

Environmentalprotection

Controlofpollution Expansionbeyondnationalboundaries.


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Law Describedasasystemofrulesgoverninghumanconduct.

Theobjectoflawistoensurethatpersonsorgroupsdealwithoneanother

asfairlyandjustlyaspossibleandtoprovideasameansofsettlingconflictsthatmayarise.


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PrivateLaw

Itregulatesrelationsbetweenprivateindividuals.

Eachpersonhastherightfor

Protection(Humanrights) Impositionofdutiesbetweencitizensprovidethecontentoftheprivatelaw.

Twoclassification TortLaw

PropertyLaw


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TortLaw

Definition Anyprivateorcivilwrongorinjuryinvolvingabreachofcontract.

Commontortsare: Trespass -Automobileaccidents

Assault -Burglary

Battery -Others

Nuisance

SlanderandLibel

Invasionofprivacy


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ToBeLegallyHeldWhen:

Theaccusedpersonmusthaveactedwithintenttoharmormustbehavednegligentlyandwithouttheplaintiffsorcomplaints

consent.

Iftheplaintiffcontributedtotheharmor

assumedtheriskbeforehand,thedefendantisnotliablefordamages.


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PrivateProperty

Property Anexclusiverighttocontrolaneconomicgood.

Possessionofagoodandtheownerhastheopportunitytotakeadvantageofitsuseinthefurtherproductionofmoregoodsandhasa

validclaimofownership.


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BusinessLaw

Allbusinesstransactionswereconductedonahighethicalstate.

AssociationshadadoptedtheCodeofEthics.


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Code

Anorganizedcollectionoflawsorlegalproceduresonaparticularsubject.

Itisusuallysubmittedorapprovedby

thelegislativebodytoclarifyorreviselawsalreadyexist.


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HistoricalCodes

TwelveTablets ThefirstRomanCode

Writtenabout415B.C

EmperorJustinianandhisCorpusJurisCuriescreatedthiscode.

ItwasalsothebasisofTheCodeofNapoleonin1804(France)thatuseasaguideforEuropeanDevelopment.


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Cont

CodeofHammurabi 6thof11KingswhowasKingHammurabiofBabylon

Consistof: Preamble

Epilogue

282sections


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282sectionscontainstothedealingof: Personalproperty

Realestate

Trade Business

Labor

Family PersonalInjuries


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Thecodealsoprotects: Debtors

Slaves

Workers Women

Useforappealingtocourtswhosejudgesare

unjust.


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CodeofKalantiao UsebythenativeFilipinosbeforeMagellancame.

Contains: Listingofcrimes

Statedpunishment(dippedinboilingwater)

Anti-GraftandCorruptionPracticesAct

RA#3019effectiveAugust17,1960


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BusinessCodes Principlesorstandardsoffairandethicalpracticesobservedoragreeduponby

particularindustriesorbusinessgroups.

ItbecameknownasBusinessEthicsor

CodeofEthics


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CodesofEthics

Tobeeffectiveandinfluentialinanorganizationscultureandcommand

structure,codesofethicsmustbespecific

enoughtogiveconcreteguidelinesandmustbere-enforcedbytheexamplessetbykeycorporatefigures.


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CharacteristicsofCodesofEthics Theyarevisibleguidelinesforbehavioratalllevels.

Theyareanunchallengeablebasisforfiringanunethicalemployee,evenwhenhisorheractionis

not,strictlyspeaking,againsteitherthelaworthespecifictermsofthejob.

Theyprotectallpersonnelfromthepressuresofthemarket,whichtendtoincitedesperationandunethicalbehavior.

Theyremindemployeestolookbeyondthebottomlineandtheyprovideatouchstoneforappealsthroughthehierarchy.


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GuidelinesforActingEthically

Considerotherpeopleswell-being,includingthewell-beingofnonparticipants. Thinkasamemberofthebusinesscommunityandnotasanisolatedindividual.

Obey,butdonotdependsolelyon,thelaw. Thinkofyourself,andyourcompany,aspartofsociety.

Obeymoralrules

Thinkobjectively Askthequestion,Whatsortofpersonwoulddosuchathing?

Respectthecustomsofothers,butnotattheexpenseofyourownethics.


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HumanRights


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HumanRights

Isalsoourliberty(freedom) Rightofindividualstoactastheychoose.

Developtheabilitytovalueourhuman

rights. Understand,respect,andprotectthosevaluesthatarerelatedtohumanrights.

Teach,learn,andmaintainthevaluesthatpreserveourlifeanddignity.

Evaluateandreacttoanyviolationsofhumanrights.


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HumanRightsValue

FranklinD.RooseveltJan.6,1941

Envisionedapostwarworldinwhichfour

freedomswouldbeguaranteed: Freedomofspeechandexpression

Freedomofworship

Freedomfromwant Freedomfromfear

Core Values of Human


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CoreValuesofHumanRights

1. Learningabouthumanrights UnitedNationsDeclarationofHumanRights

Equality

Justice Love

Universal Declaration of


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UniversalDeclarationofHumanRights

PreparedbytheCommissiononHumanRightsoftheEconomicandSocialCounciloftheUnitedNations.

Itdescribedthe30articlesofhumanrightsamongtheseare: Righttolife,libertyandsecurityofperson

Freedomofconscience,religion,opinion,expression,

association,andassembly. Freedomfromarbitraryarrest

Fairandimpartialtrial



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Freedomfrominterferenceinprivacy,home,orcorrespondence.

Toanationality

Toasecuresocietyandanadequatestandardofliving

Toeducation

Torestandleisure

Declarationalsoaffirmsthe:

Rightsofeverypersontoownproperty Tobepresumedinnocentuntilprovenguilty

Totravelfromahomecountryatwillandreturnatwill



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Toworkunderfavorableconditions,receiveequalpayforequalwork,andjoinlaborunionsatwill.

Tomarryandraiseafamily

Toparticipateingovernmentandinthesociallifeofthecommunity

Overallitinvolvesallcivilandpolitical

rights,economic,socialandculturalrights



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2. LearningHowtoUpholdHumanRights Acquisitionofrelevantknowledgeisnot

enoughbutitmustbedevelopandpracticeinordertodefendandpromotethosevaluesofhumanrights.

Skillsthatare: Effectivecommunication

Co-operation Negotiation

DecisionMaking

Non-violentactionandcampaign



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3. LearningthroughPracticingHumanRights

Upholdandreinforcedthelearnedskillsand

values. Itmustbeencouragetodoitby: Interpersonalrelationships

Decreaselevelofanxiety

Promotedivergentandconstructivethinking Encouragepeerlearning

Encourageopen,effective,creativeandaccuratecommunication


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ViolationofHumanRights

1. Toomuchemphasisoneconomicconsiderationatthecostofequalityandjusticeforcommonpeople.

2. Ignoranceoflawandcustoms3. Lackofeducation4. Vestedinterestedofarichandpowerful

minority5. Poverty6. Inequitabledistributionofwealth7. Certaintraditionalnormswithrespecttothe

statusofwomeninsociety.8. Familiesbecomingmorenuclearinnature,so

thattheagedarebecomingneglected.


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BillofRights

isthedeclarationandenumerationoftheindividualrightsandprivilegeswhichtheConstitutionisdesignedtoprotectagainst

encroachmentsbythegovernment,orbyindividualsorgroupsofindividuals.

Itisacharteroflibertiesfortheindividual

andalimitationuponthepoweroftheState.

f


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BillofRights

Itsbasisisthesocialimportanceaccordedtotheindividualinademocraticorrepublicanstate,thebeliefthateveryhumanbeinghasintrinsic

dignityandworthwhichmustberespectedandsafeguarded.

Classesofrights Naturalrights(righttolifeandrighttolove)

Constitutionalrights Statutoryrights(righttoreceiveminimumwage)

Bill f Ri h


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BillofRights

Sec.1 Nopersonshallbedeprivedoflife,liberty,orpropertywithoutdueprocessoflaw,norshallanypersonbedeniedtheequalprotectionof

thelaws Sec.2

Privatepropertyshallnotbetakenforpublicusewithoutjustcompensation.

Statepower(eminentdomain,policepower,taxation

Bill f Ri h


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BillofRights

Sec.3 Therightofthepeopletobesecureintheirpersons,houses,papers,andeffectsagainstunreasonablesearchesandseizuresofwhatevernatureandforanypurposeshallnotbeviolated,andnosearchwarrant

orwarrantofarrestshallissueexceptuponprobablecausetobedeterminedbythejudge,orsuchotherresponsibleofficerasmaybeauthorizedbylaw,afterexaminationunderoathoraffirmationofthecomplaintandthewitnesshemayproduce,andparticularlydescribingtheplacetobesearched,andthepersonsorthingstobeseized.

Bill f Ri h


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BillofRights

Sec.4 Theprivacyofcommunicationandcorrespondenceshallbeinviolableexceptuponlawfulorderofthecourt,orwhenpublicsafetyandorderrequire

otherwise. Sec.5

Thelibertyofabodeandoftravelshallnotbeimpairedexceptuponlawfulorderofthecourt,orwhen

necessaryintheinterestofnationalsecurity,publicsafety,orpublichealth.

Bill f Ri h


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BillofRights

Sec.6 Therightofthepeopletoinformationonmattersofpublicconcernshallberecognized.

Sec.7 Therighttoformassociationsorsocietiesforpurposesnotcontrarytolawshallnotbeabridged.

Bill f Ri ht


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BillofRights

Sec.8 Nolawshallbemaderespectinganestablishmentorreligion,orprohibitingthefreeexercisethereof.Thefreeexerciseandenjoymentofreligiousprofessionandworship,withoutdiscriminationorpreference,shallforeverbeallowed.Noreligioustestshallbe

requiredfortheexerciseofcivilorpoliticalrights.

Bill f Ri ht


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BillofRights

Sec.9 Nolawshallbepassedabridgingthefreedomofspeech,orofthepress,ortherightofthepeoplepeaceablytoassembleandpetitiontheGovernmentforredressofgrievances.

Sec.10

Nolawgrantingatitleofroyaltyornobilityshallbeenacted

Csr and Code of Ethics

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