principal appoint agent, agent report to principal (fiduciary duty受托责任 - is a duty of care & trust which one person or entity owes to another. It can be a legal ot ethical obligation.)
Chapter 02
Stakeholders and Social responsibility1. Principals and agents in governance
Agency Theory
Agency relationship
Principal (shareholder)
agent (director/manager/employees)
agency problem
conflict of interest (∵self-interest)
Agency monitoring system
Increase numbers of NEDs
Attend AGM and question the board
agency solution
shareholder have the right to remove the directors from office （不满意可以直接请他们出去）
请出去这个行为 -- > Any steps taken by shareholders are likely to incur 'agency costs' 例如：
Costs of studying company data and results (either in-house or externally)
Purchase of expert analysis (such as consultants)
External auditors' fees
Costs of devising and enforcing directors' contracts
Time spent attending company meetings
Transaction costs
Stakeholders
definition
anyone who has interest & power in your company could be considered as a stakeholder
classifiy
Internal
eg: Employees, anagement, the board
Connected
eg: Shareholders, customers, suppliers, lessors
External
eg: The government, local government,public, pressure groups, media, completion, trade union
Mendelow’s matrix
(Power & Interest)
minimum efforts (2L)
eg. part-time worker
junior
security guard
keep inform (HiLp)
eg. customer
supplier
employee
keep satisfied [treat with care] (HpLi)
eg.government
bank
institution investor
key player [all decision must be acceptable to them] (2H)
eg.major customer
major pricipals
CEO
Problems with stakeholder mapping
difficult to measure each stakeholder's power and influence
map is not static 固定
∴ stakeholder's positions move around
map is based on the idea that strategic positioning, rather than moral or ethical concerns
If there are a number of key players, and their views are in conflict, it can be very difficult to resolve the situation
only considers power and influence but fails to take
legitimacy into account
Problems with stakeholder theory (2views)
instrumental view [一切向利益看] justifies considering stakeholders purely because of the economic benefits to the company - everything else is of secondary importance
normative view is based on the idea that the company has moral obligations towards all its stakeholders, including those whose main aim is not profit driven
3. Sustainability 可持续性
Environmental and Social issues
Sustainability means limiting the use of depleting resources to a level that can be replenished. eg. 休渔期
Sustainable development 可持续发展 - development that meets the needs of the present without compromising the ability of future generations to meet their own needs.
Social and environmental reporting
2. Social responsibility 企业社会责任
Corporate social responsibility (CSR)
DEFINITION
a concept whereby organizations consider the interests of society by taking responsibility for the impact of their activities on wider stakeholder groups.
extend beyond statutory obligations to comply with legislation
Carroll,1991
层次由下至上
Philanthropic 博爱
charitable donations, contributions to local communities and providing employee with changes to improve their own lives
Ethical
organisation are required to act in a fair and just way even if the law does not compel them to do so (eg. 泰国童工合法话，但不能去做)
Legal
obeying the law
econimic
eg. shareholder want dividends
employee want fair employement
customer want good quality product
Corporate citizenship (CC) 企业扮演的公民义务
Limited view
It consists of limited projects undertaken in the business' self-interest
Equivalent view 平等
Extended view 别的责任
eg. good working conditions (no sweatshop 血汗工厂)
CSR Stance 立场 （新旧各4种）
最早 traditional
Short-term shareholder interest
it is up to governments to impoose constraints on governance [法律没约束的话 赚钱就行] - 初创企业
long-term shareholder interest
Corporate image may be enhanced by an assumption of wider responsibilities.
[短期牺牲，长期还是会赚回来的]
The responsible exercise of corporate power may prevent a build-up of social and political pressure for legal regulation
Multiple stakeholder obligations 考虑多方stakeholder
Accept the legitimacy of stakeholders and their claims
without recognizing groups such as suppliers, employers and customers, the organization would not be able to function
Shaper of society
Although it is accepted that this role is largely the preserve of public sector organizations,
it is aspirational enough for all organizations to at least attempt to emulate
NEW
Laissez-faire (let do)
Companies are there to make profits, pay taxes and provide jobs, but only in order to comply with the law - no more!
unlikely to respond to outside pressures.外部压力
eg. large multinational corporations quoted on many different stock exchanges.
Enlightened self-interest 放长线钓大鱼
concern that the pursuit of profit alone will not matain shareholder wealth over the long term
will respond to outside pressure
Forum for stakeholder interaction
Interested in operating in partnership with stakeholders and being proactive in championing many of their claims.
stakeholder's view might be preview
Shaper of society
visionary 大视野
leadership to pursure an agenda of social and market change in conjunction with other organisation
CSR viewpoints 观点、立场 （7个）
Pristine capitalist 纯资本主义
旧： Business has no moral responsibilities beyond their obligations to shareholders and creditors 一切为了赚钱
新：Profit is the only aim for such org
profit maximization is the only objectives.
Expedients 权宜之计
旧：Social responsibility may be appropriate if it in the business economic interests
新：do this is to maintain profit, not to benefit stakeholders' interest
eg. strong customer focus lock customer
Proponent of the social contract
旧： There is effectively a contract or agreement between the organizations and those who are affected by their decisions
eg. 报纸专栏说停就停， 要考虑读者性
新：
eg. broadcaster the BBC
Social ecologist 生态
旧： Business activities result in resource exhaustion; waste and pollution must therefore be modified and organization must also be socially responsible
eg. 化工厂搬迁
新：
eg. cosmetics being sourced from natural products in sold in recyclable packaging
no animal testing (eg. the bosy shop)
Socialist 社会主义
旧： Business decision making should no longer be determined by the requirements of capitalism and materialism but should promote egalitarian equality
新：equivalent to the political definition of socialism in many respects and aims to reduce the abuse of workers by the ruling classes.
Radical feminist 女权主义
旧： Aim to promote feminine values such as co-operation (合作rather than 竞争)and empathy (同情心)
新：Feminine values (such as cooperation and empathy) over typically masculine values (such as aggression and conflict)
Deep ecologist ('Green’)
旧： Suggest that man has no greater right to resources of life than other species.
新：Organizations therefore should not destroy animal habitats or pursue animals (such as commercial whaling) 商业捕鲸