This chapter highlights the importance of board committees, particularly the remuneration committee, the nomination committee, and the audit committee. It explains that the remuneration or compensation committee is responsible for recommending to the board the remuneration packages of executive directors and other top management, while the role of the nomination committee is to suggest names for board membership in an attempt to introduce different experiences, personalities, and diversity to the board. The chapter also discusses the fundamental role the audit committee plays in corporate governance practice. It furthermore draws attention to the audit committee, which provides a bridge between the external auditor and the board. It also considers the significance of the company secretary, who has a duty to act in good faith in the best interest of the company.
Chapter
Board Activities: Corporate Governance in Practice
Chapter
The Board and Business Ethics
This chapter explains what business ethics are and reviews changing expectations in the governance of organizations, including the concept of corporate social responsibility (CSR). It explores CSR strategies, policies, and the CSR competency framework and highlights enlightened shareholder value (ESV), sustainability, and the triple bottom line. It also analyses communication with stakeholders and integrated reporting and promotes awareness of the United Nations Global Reporting Initiative. The chapter cites the UN Global Compact, which is a strategic initiative for businesses that commit to aligning their strategies and operations with ten universally accepted principles in the areas of human rights, labour, the environment, and anti-corruption. It details how the UN Global Compact calls for participating companies to accept core values that were derived from the Universal Declaration of Human Rights, the International Labour Organization's Declaration of Fundamental Principles and Rights at Work, and the UN Convention against Corruption.
Chapter
Board Effectiveness: Building Better Boards
This chapter considers what makes a board effective, noting that the principal attributes of an effective board are sound leadership with an appropriate leadership style, supported by a well-balanced board team. It discusses director induction, development, training, and updating, which are essential to orient and guide a new member into the ways of the board and the company. It also elaborates the directors' liabilities and indemnity, as the exposure to personal liability becomes real when serving as a company director. The chapter covers how to improve board information and meeting management, agendas, and minutes as a thorough consideration of their purposes can avoid repetitious and time-wasting issues being brought up and discussed. It also considers communications with shareholders and other stakeholders, emphasizing the demand of investors for corporate transparency.
Chapter
Board Evaluation: Reviewing Directors and Boards
This chapter explains the assessment of boards and board committees, such as the corporate governance rules of the New York Stock Exchange that require boards of listed companies to conduct a self-evaluation at least annually. It clarifies that a board review should take a strategic perspective, considering the directors' ability to handle long-term issues and reflecting on recent experience in the short term. It also discusses how information for a board review is obtained from an analysis of board and board committee agendas, papers, and minutes, as well as from interviews with each officer and member of staff concerned. The chapter looks at corporate governance rating systems for companies, noting that a corporate governance rating from an independent and respected organization can reduce a company's cost of capital. It compares corporate governance assessment systems, which monitor and assess the overall level of corporate governance country by country.
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Board Leadership: The Reality of the Boardroom
This chapter discusses how people, power, and politics affect practice, emphasizing that the directors' behaviour is influenced by interpersonal relationships, perceptions of position and prestige, and the processes of power. It recognizes the chair's leadership role, which includes influencing the company's strategic direction, interacting strongly with the chief executive, and providing wide-ranging leadership of the board. It also investigates how governance power is derived, who wields it, and how it is used. The chapter considers the games that directors can play in badly led boards, that is, boards in which personalities and political manoeuvring prevail. It covers board styles, culture, and ethics, and discusses whistle blowing, that is, informing on a person or an organization believed to be acting improperly.
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Board Membership: Directors’ Appointment, Roles, and Remuneration
This chapter discusses the appointment of directors of major listed companies, which begins with a nomination through the chair and the existing directors, followed by the approval of shareholders during annual general meetings. It highlights the desirable attributes and core competencies in a director, such as integrity: directors need to be stewards of the interests of the company rather than acting in self-interest, which requires them to be ethically aware and able to recognize conflicts of interest. It also stresses roles that directors play as they inevitably make a variety of contributions to their boards, given their various personal attributes and different competencies. The chapter warns that directors of listed companies must be careful not to benefit personally from confidential corporate information they receive as the confidentiality of the boardroom must be respected and not passed to third parties. It details the contentious remuneration of directors, which is at times challenged due to its allegedly excessive levels.
Book
Michael Blowfield
Business and Sustainability has three main sections. Section One looks at the global context of business and sustainability. It starts off with an overview of the topic. It looks at the sustainability challenges confronting business. Section Two is about managing sustainability. This section includes examinations of leadership, entrepreneurship, and change; strategy and execution; innovation, planning, and design; financing sustainability; cooperation, collaboration, and partnership; and next generation competencies. The final section turns towards the external environment and considers governance, sustainable consumption and production, and the future.
Chapter
Business and sustainability overview
This chapter examines the relationship between sustainability and business. It presents the concept of sustainability as well as some of the main arguments about its importance to the private sector. It examines scientific theories of sustainability, and how they have been interpreted. It considers three main areas of sustainability: demography, ecosystems, and climate change, and provides the basis for thinking about their importance to business. It sets out the social and environmental nature of sustainability. It also delves into the doubts about sustainability, and whether they are justified.
Book
Andrew Crane, Dirk Matten, Sarah Glozer, and Laura J. Spence
Business Ethics starts with a description and analysis of business ethics. The first part begins with an introduction to business ethics. Next, the text frames business ethics within the contexts of corporate responsibility, stakeholders, and citizenship. Business ethics is then evaluated using normative ethical theories. The text then looks at making decisions in business ethics using descriptive ethical theories. At the end of the first part, the text looks at managing business ethics. The second part is about contextualizing business ethics in terms of the people involved. It looks at shareholders, employees, consumers, suppliers, competitors, government, and civil society. Finally the text makes some conclusions and looks to the future.
Chapter
Business in a resource-constrained world
This chapter evaluates business in a resource-constrained world and how their operations are shaped from within by sustainability challenges. It begins with how businesses are perceived. It then moves on to a description of the features of contemporary businesses that aid and hinder private sector action. The historical role of business is also examined as well as the implications of conventional ideas on business. Finally, the chapter reflects on the roles a business could play, not just to protect itself from sustainability challenges, but to guide the process of transformation to a prosperous resource-constrained world.
Chapter
Civil Society and Business Ethics
This chapter shows the relationships between businesses and civil society organizations (CSOs), addressing the changing patterns of relationships between these traditionally adversarial institutions. It looks at the role played by various types of CSOs as stakeholders of corporations, both directly and indirectly. The chapter also explores the ethics of pressure group tactics, business–CSO collaboration, and social enterprise. The chapter then jumps to review the impacts of globalization on the nature and extent of the role played by civil society towards corporations. It further examines the different relationships between business and civil society and their impact on corporate responsibility. Ultimately, the chapter discusses the role of civil society in enhancing corporate sustainability.
Chapter
Conclusions
This chapter reviews corporate governance in South Africa, India, and Brazil. These countries have different cultural influences and different legal systems and corporate governance structures. The chapter talks about certain commonality of approach to the corporate governance codes in these countries, particularly in terms of transparency and accountability, and the desire to enhance the protection of minority shareholders' rights. It emphasizes how important it is to have a balanced board with an appropriate proportion of independent directors, and to recognize that a company cannot operate in isolation and should consider the interests of its various stakeholder groups. The chapter illustrates that corporate governance is relevant and valuable to countries around the globe. Over time, it is to be expected that corporate governance will improve, as countries seek to attract international investment and maintain investor confidence.
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Conclusions and Future Perspectives
This chapter sums up the role, meaning, and importance of business ethics, including emergent themes. It identifies the emerging themes of gender and other inequalities, alternative business models, and digitalization. The chapter also tackles the influence of globalization on business ethics and the value of the notion of sustainability. It then shifts to explain the role and significance of stakeholders as a whole for ethical management, and presents the implications of corporate citizenship thinking for business ethics. Ultimately, the chapter discusses the contribution of normative ethical theories to business ethics. It then considers the potential conflicts between different stakeholder groups, and draws conclusions about the future relevance of business ethics issues.
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Consumers and Business Ethics
This chapter looks at the ethical issues arising in the context of consumers. It analyzes the question of consumer rights, the ideal of consumer sovereignty, and the role of ethical consumption in shaping corporate responsibility. The chapter then shifts to review the impact of globalization on responsibilities towards consumers. It evaluates the arguments for more responsible marketing practices, then assesses consumer decision-making models in the context of ethical consumption. The chapter concludes by investigating the problems and solutions around moving towards more sustainable models of consumption. It elaborates the role of sustainable consumption in effecting positive social change through corporations.
Chapter
Cooperation, collaboration, and partnership
This chapter focuses on partnerships and other forms of collaboration that have come to prominence because of the business–sustainability relationship. It begins by examining why partnerships have garnered attention, and then identifies the main types of collaboration that business engages in. Partnerships involve various arrays of stakeholders, and company perspectives are affected by whether they want to manage or engage with stakeholders. Stakeholder theory provides insights into the power relations that are a strong influence on how partnerships operate and what they can achieve. This is explored further with examples of inter-firm collaborations, supply chain partnerships, and multi-stakeholder partnerships in different regions of the world.
Book
Christine A. Mallin
Corporate Governance is made up of four main parts. The first part looks at developments in corporate governance. The second part is concerned with owners and stakeholders. This includes an examination of family-owned firms, institutional investments, and socially responsible investment. The third part examines directors and the board structure. The fourth part is about international corporate governance; it reviews corporate governance in continental Europe, central and eastern Europe, the Asia-Pacific, South Africa, Egypt, India, and Brazil.
Book
Corporate Governance offers a comprehensive overview of the key principles of corporate governance that not only considers the regulations, rules, and voluntary codes, but also emphasizes cultural aspects. It draws a distinction between Western and Eastern perceptions of corporate governance and includes cases from China. Its first part covers the principles of corporate governance and looks at management; theories, philosophies, and concepts of corporate governance; the governance partnership; the regulatory framework; and models of corporate governance. The second part is about policies. It examines the governance of corporate risk, the board and business ethics, the governance of listed companies, the governance of non-listed entities, and corporate governance globally. The last part turns to practices and includes chapters considering board membership, leadership, board activities, board effectiveness, board evaluation, and the future of corporate governance.
Chapter
Corporate Governance around the World
This chapter analyses different approaches to corporate governance in the East, such as in China, Hong Kong SAR, India, Singapore, South Korea, and Japan. It mentions the China Securities Regulatory Commission of the State Council (CSRC), which issues the Corporate Governance Code and other corporate governance regulations and publishes regular reports on corporate governance reform and performance in China. It also describes corporate governance in Hong Kong, which evolved under the influence of British law and corporate regulation, reflecting the British oversight of the territory up to 1997 until Hong Kong became a Special Administrative Region (SAR) of China. The chapter then reviews the approaches to corporate governance in the Middle East, North Africa, Brazil, and Russia. It explains that Eastern European transitional economies took a similar approach to China in privatizing their state enterprises and creating companies in which shares were sold to external strategic investors.
Chapter
Corporate governance in Central and Eastern Europe
This chapter discusses the move from a command economy to a market economy, noting the countries that comprised the former USSR that have achieved this transition with varying degrees of success. In general, companies moved from a situation where they were most probably not expected to make a profit. The chapter examines the success of various countries and shows how this can be linked to the type of privatization followed: businesses went from state-owned enterprises to joint stock companies to public corporations. The chapter explains that, in some countries, the term joint stock company describes a company that has share capital which is traded on the stock exchange. In other countries, the term may refer to a stage in the privatization process whereby a state-owned enterprise issues share capital to become a joint stock company.
Chapter
Corporate governance in Continental Europe
This chapter focuses on corporate governance in European countries. This topic has received a lot of attention in the last decade, and it has been key for the development of capital markets and investor confidence. The chapter describes how the barriers between different countries' capital markets declined with the adoption of the euro, and it discusses the internationalization of cross-border portfolios and technological advances. As a result of this corporate governance practices of individual countries increasingly need to satisfy certain perceived core principles of accepted good practice. The chapter cites the Cadbury Code (1992) and the Organisation for Economic Co-operation and Development (OECD) Principles that have been influential in the determination of core principles. The increase in both privatizations of former state-owned enterprises, and mergers and acquisitions in many countries has also led to a need for better corporate governance.
