Corporate Goverance And Social Responsibility CSR Report

Question: Describe about the Corporate Goverance And Social Responsibility for CSR Report. Answer: The Corporate Governance And Social Responsibility Issues Involved In Business Decision Making: Corporate Governance is a crucial feature of any business institution. Being a prospective business manager it is important to have a clear knowledge about the subject and how it will be significant for my business organization. Corporate governance is a set of range of duties, responsibilities and legal rights that manage and guide a business organization (Bucur, 2015). The main intend is to distribute the authority and responsibilities among various stakeholders in the organization like employees, managers, board directors, etc. It sets the responsibility and right of each member within an organization. A Corporate Governance is the process by which a business organization is governed (Murphy, 2012). It may be referred as carrying business processes according to stakeholders decisions as it is concerned about the interest of the stakeholders. In an effective business organization, generally there is a good terms between the directors and the managers (Leblanc, and Gillies, 2010). T he board directors must keep a positive point of view about the performance in accordance to the standard performance (Baker, and Anderson, 2010). These factors are very important to practice good corporate governance in an organization. In the 1980s it was noticed that there is an essential swing in the control relationship among owner the stakeholders and managers is taking place. There was a huge pressure from the stakeholders upon the managers for more effective and swift decision making in financial aspects of the organization (Werther Jr, and Chandler, 2010). The common allegation of the stakeholders was that the managers are not capable enough to safe guard the interest of the stakeholders (Du Plessis, et al. 2010). According to news media, the directors were held responsible for the incapability to safe guard stakeholders interest. The initiative of corporate governance applies globally in business sectors like banking and financial institutions, manufacturing industry, IT industry, etc. There are mainly three types of stakeholders in any business organizations; they are stakeholder, stakewatcher and stakekeeper (Gourevitch, et al. 2005). The power of the shareholders to manipulate the activities of the management is restricted in practice and is hardly ever put into effect (Blair, and Roe, 2010). This subsequently grants directors of subsequent authority to best fit in the situation. Thus it can be explained as a structure that is utilized in order to direct and manage an organization. The corporate governess includes both moral as well as immoral sense whichever is good to safe guard the interest of the stakeholders (Van den Berghe, 2012). The non-moral functions include efficient decision making, suitable resource distribution, tactical development, and etc. However, in its moral sense good corporate governance have move as encouraging an ethical climate which is equally morally suitable and automatically correct in terms of ethical behaviour in business where it is profitable also (Visser, et al. 2010). So the fundamental idea of corporate governance is about reasonable decision making with due diligence, the righ ts and responsibilities of the management or directors and corporate social responsibility of the organization (Alexander, 2010). The idea of Corporate Governance is to convey the message among workforce that do as I do and do as I say with the good intention (Nicolaescu, 2013). It has been observed that when there is a low level of commitment in the higher level in management, the lower level find it hard to practice ethical behaviour in the organization. The communication of authenticity will at all time pass down, and when the top management and board of directors are ethical and committed the same is passed down to the lower and middle level managers also (Okpara, and Idowu, 2013). This practice also promotes the ethical business practice within the organization. Ethical infrastructure is an expression of the obligation, a way of checking and solving ethical struggles in the organization and a remarkable expression of honesty (Tricker, 2015). G4 Gri Guidelines: Preparing a CSR report with the G4 GRI Guidelines is a framework that allows business organization to prepare sustainability reports irrespective of its location, nature of business and size by maintaining Reporting Principles, Standard Disclosures and an Implementation Manual (G4 GRI GUIDELINES, 2016). It sets international standards for originations that are interested in disclosing the governance nature of the organization and type of eco-socio-cultural performance and effect of organizations. The G4GRI Guidelines are highly used by organizations in creating documents that discloses organizations good governance activities. This guide G4 GRI Guidelines have been created and improved through a complex process that needed diplomats and executives from business organizations, labour unions, experts of financial market and lastly legal bodies and governments for analysis and standardizing. A global multi-stakeholder process was involves in creation of the G4 GRI guidelines relating re presentatives from business, labour, civil society, and financial markets, as well as auditors and experts in diverse areas; and in harmony with regulators and governmental agencies around the globe (Solomon, 2007). The guiding principles are shaped within association by means of globally accepted reporting associated papers. The author has noted the important doctrine for G4 GRI Guidelines guided report content. These principles are shaped to define transparency in the report. Firstly the stakeholders comprehensiveness, as practical expectations of the stakeholders is the main reason for many decisions in creating the report. It is necessary for any effective sustainable report to identify its stakeholders and clarify how they have reacted to the stakeholders expectations. Normally stakeholders can be explained to the individuals who are directly or indirectly related with the organization like, employees, suppliers, investors, customers, etc. (Farrar, 2008). The main perspective o f a sustainability report is to declare the performance of the organization so it should focus on wider situations of organizational performance. That means the report should cover the performance and activities of the business organization in relation to the standards that are preset and its impact on environment and local community. Thus it should be about organizations contribution in positive or negative way for improving ecological environmental economical and social-cultural impacts (Mallin, 2011). And it should focus on the impact that stakeholders have on decision making process of the organization that has impact on organizations performance. An effective sustainability report includes the aspects of possibility, limit and time. According to the standards that should be maintained while preparing suitability report is transparency. The principle of the guideline states that the sustainability should focus on organizations performance and its impact on eco-socio-cultural asp ect of the community and also the expectations of the stakeholders (Council, 2007). The guidelines ensure the quality and transparency of the report and its information provided so that the stakeholders can analyse the organizations performance and evaluate to take necessary actions. For brining transparency in a sustainability report the following principles are needed to be followed. Firstly balance in reflecting the positive as well as negative performance and aspects in negative impact for its business processes. The report should be balanced, neutral and provide a transparent picture in front of the stakeholders. Secondly, the report should be created and presented in a very comprehensive manner so that it is easy for the stakeholders could analyse and evaluate the performance and improvement of the organizational activities in time. Thus it should be containing information that is selected, compiled and present report constantly. Reactions to fiscal, ecological and social can be expressed in diverse ways which can range from qualitative to in depth quantitative dimensions (Council, 2010). The quality to create accuracy of the information differs according to characteristics of the data and facts and the user. The reported information must be adequately correct and comprehensive for stakeholders to consider the organizations performance. A report can be transparent and accurate when it is published in regular intervals as it will then only assists the stakeholders to evaluate and take part decision making process. Clarity and reliability are the last two characteristics that make sustainability report an effective and according to the G4 GRI Guidelines. Because clarity makes a report understandable and user-friendly which helps the stake holders to evaluate and analyse the organizational performance. Lastly, the fact that are offered in the report should be collected, recorded, assembled, analysed and presented in such a manner so that the information can be utilized later for analysis and assessments which could also set up a situation for organizational performance and achievement. Thus all the above featured discussed that are created as guide lines by G$ GRI Guidelines are important for making an effective and comprehensive sustainability and corporate responsibility report. Wesfamers Comparison: Wesfamers is one of the Australias leading business organizations. The Board of Directors plays a significant role in Wesfamers by directing and supervising the business organization to achievement of the tactical plans and also promoting good governance practices in the organization. The Board seeks to defend and improve the security of its shareholders, at the same time as taking into consideration the welfare of other associated stakeholders, which has workers, consumers, suppliers and community altogether. The management team get into day to day business activities to employ good governance and ethical behaviour and is supported by skilled leadership team. According to the managing director Mr. Richard Goyder, it has dedicated to development of the sustainability of the company to promote and safeguard the interest of the stakeholders. The organizations prominent economic, socio-environmental performance is managed by strong corporate governance structure assists to protect the i nterest of the stakeholders and community partners (Clarke, 2007). The business structure and horizon is such vast ranging that they have to interact with diverse individuals everyday and the corporate governance aims at preserve the reputation of the organization and in the process it also perform positive contribution towards the community. Wesfarmers publicises its CSR report every consecutive year. In this report the author is going to analyse and compare the 2014 and 2015 CSR report of Wesfarmers in relation to in relation to the G4 GRI Guidelines. According to the Wesfarmers CSR website it is a chief metallurgical coal producer and supplier of thermal coal for domestic power generation in Australian Market. According to the website information Wesfarmers is working in maintaining and generating significance over the long term, and is liable to actively administration of its societal and environmental impact and the objective of the CSR has remained the same for 2014 and 2015 a s well. Although the number of employees have decreased in Curragh mine from 547 number of employees in 2014 to 476 number of employees in 2015 which does affect on the total revenue collection, it differs only by $244 million. Although there is no change in the market share, it is still at 40%. In 2014, Wesfamers published its 14th sustainability report and in the consecutive year the 15th one. This shows that the management of Wesfamers are responsible for the interest of the stakeholders. Wesfamers has been actively participating in maintaining the community and environmental impact. In 2014 The Wesfarmers Group has reportedly reduced its greenhouse gas release by 4.1% which was more than 20 % less in comparison to last five years. And in 2015 moving one step further the group has reduced another 2.2 per cent as compared to 2014. The total amount of CO2e or carbon dioxide gas was 3.9 million tonnes and emission decreased by 8% in comparison to 2014 with 59.3 tonnes of carbon diox ide gas released per 1 Million dollars of income. The group achieved this millstone by constant observation and supervision of electricity usage in all sites of Wesfamers. The top priority of the organization is safety and in 2015 they announced that they have achieved the reduction rate by 66%. The water consumption by the sites has also seen notable decrease in the last three years. The total consumption in 2015 was 7,086 mega litres. They have recycled 4500 mega litres that is 29% of the water that have been used in the Curragh mining site. Due to enhanced data and information capture liquid water disposed ad recycled that resulted in recycle 356000 tonnes of wastes which is 17 per cent increase from 2014. The management took the initiative of distribution and donation of 7,800 tonnes of free food through their partner the Second Bite and Foodbank which experienced a 50% increased in donation in comparison to 2014. In 2015, the main issues that Wesfamers concentrated to improve were, safe workplace, improving and developing employee skills and gender diversity work environment including Aboriginals and Torres Strait Island inhabitants. They committed to build a stronger relationship with their valuable suppliers and working with them to improve the source of product to progress the ecological and social practices. The management made a positive communal impact by providing employment to one in every working Australian, providing taxes to the government like a responsible citizen and helping NGO who work on the grass root level in Australia. According to the Wesfamers the sustainable reports are been prepared according to the standards of GRI guidelines. In the process the report has explains the operations that are against the guidelines core elements of governance, financial, ecological and communal performance. The reports objective is associated with GRIs guidelines for forming the sustainability report content which are stakeholders involvement, transparency, accuracy, sustainability context, clarity and reliability. Wesfarmers has committed towards a sustainability development goal by 2030. They are: No Poverty, Zero Hunger, Gender Equality, Pure Water and Sanitation, Decent Work and Economic Growth, Reduced Inequality, Climate Action and Land on Earth. Fuji Xerox Comparison Fuji Xerox Co. Ltd is a joint collaboration between Fujifilm Holdings (Japan) and Xerox (USA) which develop fabricate and trade xerographic in the Asia Pacific area. It is the market leader in the improvement and functioning of sustainable operations. The management of Fuji Xerox is constantly working in promoting the CSR activities by helping the customers and sustaining as a trusted brand. The organizations constant effort is emphasized in safe guarding the interest of the stakeholders and to win their trust. According to Joseph C. Wilson, the business objective of the organization is to build a better understanding among its customers and stakeholders by building effective communication. In 2014, Fuji Xerox publicised its tenth sustainable report. It was the very first initiative to publish the report according to GRI guidelines. In the report the management has reported about the most important issues that matters to them as well as stakeholders and significant performance issues of 2013-2014 financial year. In 2014, the Fuji Xerox received the GBCA Five star Green Star rating for Eco Manufacturing Centre. The then MD of Fuji Xerox Australias MD Mr. Nick Kugenthiran stated that, Fuji Xerox is a business organization, which has been created on the basics of morals and reliability where sustainability has basically how the organization run the business opportunity and it is the principals and values which help Fuji Xerox to maintain the top position in the market. The organization commits to ensure that they provides a flexible, open, secured and considerate workforce environment for its workforce which provides ample opportunity for personal as well as professional growth. Fuji Xerox is a member of the Australia and New Zealand Recycling Platform member which is formed to offer its members with a flexible to offer its associates with a flexible, sustainable planning to convene accountability in the Product Stewardship legislation. The vision of the organizat ion is to form a society which accumulates process and securely recycles electronic waste for positive environmental impact. In 2014, the Fuji Xerox Australia, sold hundred percent of the paper sold that were certified under FSC, PEFC and FSC certified which were either neutral or made from recycle papers. In 2015, the organization engaged with more social changes and sustainability. Fuji Xerox became actively participant in various societal change programs and the management believes that they can develop value for the society by effective value chain. It recognized the effect it has on community and the significance it has for its stakeholders by business activities, from procurement of raw materials, production, and usefulness of the customer till the dumping of the product by the customer. The value cannot be just created by any organization rather if is something that the stakeholders recognizes. This reorganization is done by monitoring and communiqu. Fuji Xerox considered emp loyees as an important part for organizational success. The main initiative of Fuji Xerox in 2015 was to build a unique corporate culture. But in 2015, there was less emphasis on environmental environment performance. The major difference between some of the difference in the guidelines used for reporting and disclosure in Japan 2015 sustainability report compared to the 2014 report produced in Australia can be because of the different cross cultural outlook. In Japan collectivism is given more importance and it is important for Japanese to look after community specially the old, despair and children (Globerman, et al. 2011). Collectivism can be defined as the priority of a group or community as whole over priority of the individuals present in it (Mukherjee, et al. 2012). Whereas Australia is a country where individualism is given more importance issues like personal comfort, self reliance, comfort are emphasized upon. It can also be said individualism is the tendency of self radia nt and independent (Hartung, et al. 2010). The theory of Hofstedes cultural dimensions theory explains the effect of societal values and beliefs upon its members and their impact on behavioural development of individuals (Chatterjee, 2014). On a score card of Power Distance Index, Japan Scores 46 on individualism and scores 86 in long term orientation where as Australia scores high in individualism, a 90 and only 31 in long term orientation. So, there is a difference between the basic outlooks of the corporate social responsibility as Japan sees collective growth and development of the society so more emphasis on employee growth and wellbeing (Anderson, and Landau, 2006). But in Australia emphasis is given on recycling of waste material rather than employee welfare. So, it can be understood how cultural and social outlook can affect the corporate social responsibility and decision making process in business organizations. Reflective Journal Of Personal Development After the completion of the assignment I have the basic idea about the Corporate Governance. They are that it is the duty of the board of directly to equally treat all stakeholders to practice ethics and morality in the organization and there should not be any conflict of interest and each director should be free of any obligations (Hopkins, 2012). It is the responsibility of the directors to ensure that the business assembles with the appropriate laws in needed situations. I learnt that Australian corporate governance law is highly influenced by the British governance law. However now it has a single legal structure, The Corporations Act 2001 which is controlled by Australian Security and Investments Commissions. The corporate governance is important in Australian market because it organizations and exercises the cost of capital in the international market. Social responsibility is a principle that has gain importance in welfare of human being for ages. However as we are experiencin g an age of globalization and cut throat competition in the business world, it has been an increasing apprehension of business managers. This is because the increasing communication among business organizations, society and legal bodies. Prior to the course my knowledge about corporate governance, ethics in business and social responsibility concepts and relevant principals were vague. Like all others, my basic idea of a business organization was that it is a simple money making organization. It is one of the basic facts, but if we analyse deeper and learn the basic of corporate ethics and morality I understood that a group of people cooperate and coordinate to form a business organization to achieve a common goal which they cannot achieve personally and make a contribution for the community and society as a whole. I used to believe that societal impact is about considering and recognizing the concern in the community. But the actual scenario is that community investment experts vie w it as a part of job and are quite excellent in it. From the course I learnt that the solo part that can create or split a community investment strategy understanding of the subject by the social investment team: its process, development plans, tactical challenge and priorities. Also, it was a general belief as others that the organizations do societal welfare work but does not tell. But it is not true; storytelling is also an important part of CSR as it creates awareness and movement for the initiatives (Trong Tuan, 2012). Also, I learned that if the organization does not announce its CSR activities, then its impossible for stakeholders to keep track of the communal activities of the business organization. So, it is a job role as a manager that I announce the societal welfare activity of my organization to keep aware the stakeholders which will in long run create brand awareness and loyalty. The contemporary CSR of any business organizations generally focuses on the environmental social and corporate governance (Larcker, and Tayan, 2015). Organizations are emphasizing on recycle of waters, resources and wastes to reduce the carbon footprint and decrease the environmental burden (Ghinea and Ghinea 2010). The organizations are also participating in community welfare and services most with the objective of giving back what they have taken from the community. Encouraging individuals who are socially challenged or services of the aged in the community are some of the common social measures in CSR. Lastly, generally all contemporary business organizations are emphasizing in good corporate governance (Mallin, 2011). As a business student I have learnt that managing a diverse workforce can be challenging so the manager has to practice gender and communal equality in the organization. The employees grow where there is flexible, open and encouraging work environment. So, after completion of the assignment I learnt about different aspects of Corporate Governance and it s relevant importance in business organizations and how board of directors are utilizing corporate governance to bring sustainability in business and stakeholders engagement. The GRI G4 guidelines are practically founded on philosophy to safe guide stakeholders and sustainability of the business organization, and according to my study and analysis this is the best possible practice in the industry. It brings clarity and truthfulness in the system and my analysis concludes that it also assists in keeping good relation between different levels in an organization. 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