Corporate Social Responsibility
The actions of an organization that are targeted toward achieving a social benefit over and above maximizing profits for its shareholders and meeting all its legal obligations.
The perspective that the only obligation of a corporation is to maximize profits for its shareholders in providing goods and services that meet the needs of its customers,
Social Contract Approach
The perspective that a corporation has an obligation to society over and above the expectations of its shareholders.
Purest or most legitimate type of CSR in which organizations pursue a clearly defined sense of social conscience in managing their financial responsibilities to shareholders, their legal responsibilities to their local community and society as a whole, and their ethical responsibilities to do the right thing for all their stakeholders.
Philanthropic approach to CSR in which organizations underwrite specific initiatives to give back to the company's local community or to designated national or international programs.
Philanthropic approach to CSR in which organizations target programs that will generate the most positive publicity or goodwill for the organization but which runs the greatest risk of being perceived as self-serving behavior on the part of the organization.
The system by which business corporations are directed and controlled.
Board of Directors
A group of individuals who oversee governance of an organization. Elected by vote of the shareholders at the annual general meeting (AGM), the true power of the board can vary from institution to institution from a powerful unit that closely monitors the management of the organization to a body that merely rubber-stamps the decisions of the CEO and executive team.
An operating committee staffed by members of the board of directors plus independent or outside directors. The committee is responsible for monitoring the financial policies and procedures of the organization- specifically the accounting policies, internal controls, and the hiring of external auditors.
An operating committee staffed by members of the board of directors plus independent or outside directors. The committee is responsible for setting the compensation for the CEO and other senior executives. Typically, this compensation will consist of a base salary, performance bonus, stock options, and other perks.
Corporate Governance Committee
Committee(staffed by board members and specialists) that monitors the ethical performance of the corporation and oversees compliance with the company's internal code of ethics as well as any federal and state regulations on corporate conduct
"Comply or Explain"
A set of guidelines that require companies to abide by a set of operating standards or explain why they choose not to
"Comply or Else"
A set of guidelines that require companies to abide by a set of operating standards or face stiff financial penalties
Ethical Behavior that persists long after the latest public scandal or the latest management buzzword.
A senior executive responsible for monitoring the ethical performance of the organization both internally and externally
Reactive Ethical Policies
Policies that result when organizations are driven by events and/or a fear of future events
Proactive Ethical Policies
Policies that result when the company develops a clear sense of what it stands for as an ethical organization
A characteristic of an organization that maintains open and honest communications with all stakeholders
A characteristic of publicly committing to the highest professional standards and sticking to that commitment