Social Responsibility Framework and Corporate Governance

Comprehensive practice flashcards covering the corporate structure, Philippine Revised Corporation Code (RA 11232), Carroll's CSR Pyramid, historical developments, drivers, barriers, and measurement frameworks of Corporate Social Responsibility.

What is a corporation according to the lecture?

A legal entity created by an individual or group of shareholders that exists separately from its owners, has ownership represented by shares of stock, is formed to conduct business and generate returns for shareholders, and may also be organized for nonprofit purposes.

What are the four main attributes or key characteristics of a corporation?

1. Limited Liability
2. Transferability of Ownership
3. Legal Personality
4. Centralized Management

How does the characteristic of limited liability protect corporate shareholders?

It protects the personal assets of shareholders by ensuring they are liable only up to the amount of their investment; corporate debts are paid strictly from corporate assets, preventing creditors from claiming personal assets if the corporation goes bankrupt.

What does transferability of ownership entail in a corporate structure?

Shareholders may sell or transfer their shares, meaning ownership can change without affecting continuous business operations, subject to any restrictions stated in the corporate bylaws.

What specific legal rights and capacities are granted to a corporation under its legal personality?

A corporation can own property, enter into contracts, sue and be sued, own intellectual property (such as patents, copyrights, and trademarks), and possess perpetual existence.

How is centralized management structured within a corporation?

Shareholders elect the Board of Directors to oversee company policies, and appointed managers handle daily operations, allowing efficient decision-making without requiring shareholders to manage daily business activities.

What key provisions were introduced under the 2019 Revised Corporation Code (RCC) of the Philippines (RA 11232)?

The RCC removed the minimum number of incorporators, set a maximum of 20 incorporators/directors, required each incorporator to own at least one share, granted corporations perpetual existence, and introduced the One Person Corporation (OPC).

What are the four key reforms established under the Revised Corporation Code (RCC)?

1. Ease of doing business
2. Stronger stockholder protection and institutionalized corporate governance
3. Greater emphasis on corporate social responsibility (CSR)
4. Improved corporate regulatory framework

Which American economist and educator, shown below, is recognized as the 'Father of CSR' following his seminal 1953 work on social responsibility?

Howard Bowen

Which economist, pictured below, argued in 1970 that the sole responsibility of corporations is to generate profit for shareholders?

Milton Friedman

What are the four responsibilities comprising Carroll's (1991) CSR Pyramid from bottom to top?

1. Economic Responsibility (Be profitable - the foundation)
2. Legal Responsibility (Obey the law)
3. Ethical Responsibility (Be ethical - do what is right and fair)
4. Philanthropic Responsibility (Be a good corporate citizen)

In Carroll's CSR Pyramid, how do ethical responsibilities differ from philanthropic responsibilities?

Ethical responsibility is expected by society beyond legal requirements to do what is right and avoid harm; philanthropic responsibility is neither required nor expected by society, but rather desired by companies to improve human lives.

How did CSR evolve in the Philippines during the 1960s, 1970s, and 1980s?

In the 1960s, CSR consisted mainly of sporadic and unorganized donations; the 1970s brought more coordinated efforts with intermediaries; and the 1980s fostered closer collaboration between donors and donees, partly in response to economic challenges following the end of the Marcos regime.

How did the role of CSR in the Philippines develop from the 1990s through the 2000s–Present?

In the 1990s, companies began recognizing their role as social catalysts for change; from the 2000s onward, CSR transitioned from simple donations to an essential, integrated component of corporate identity, governance, and strategic management.

What are the five main drivers that encourage companies to practice CSR?

1. Regulation (legal mandates)
2. Market behavior (benchmarks, reputation, competitive advantage)
3. Social Activism (public stakeholder feedback, social media, lawsuits)
4. Culture (shared beliefs, norms, and heritage)
5. Strategy (integration across functional areas for long-term value)

What are the three primary barriers to corporate social responsibility identified in the lecture?

1. Limited financial resources (a company must first be profitable to sustain CSR)
2. Profit maximization (the Friedmanian mindset prioritizing only shareholder returns)
3. Availability of human resources (lack of dedicated personnel to implement programs)

Why is the measurement of CSR initiatives considered challenging for organizations?

Because many CSR outcomes are intangible and long-term, making impacts on goodwill, corporate reputation, customer loyalty, environmental sustainability, and employee engagement difficult to quantify directly.

What strategic framework, illustrated below, was introduced by Kaplan and Norton (1996) to integrate tangible and intangible measurements across four organizational perspectives?

The Balanced Scorecard (evaluating Financial, Customer, Internal Business Process, and Learning and Growth perspectives centered on Vision and Strategy)

What accounting framework evaluates organizational performance across three perspectives known as the 'three Ps'?

The Triple Bottom Line framework, which measures People (Social), Planet (Environmental), and Profit (Financial) to foster sustainable, equitable, viable, and bearable value creation.

What Filipino cultural concept did Ng and Rivera (2018) identify as an essential component of effective CSR leadership?

“kapwa” (fellowship)

According to the lecture, what key factors will define the future of Philippine CSR?

Volunteerism and activism serving as key drivers, full disclosure and transparency becoming the norm, and alignment with international regulatory frameworks for universal sustainability and human survival.