CHP6: Ethics, Law, and Social Responsibility

These flashcards provide key vocabulary and concepts from the lecture on business ethics, corporate social responsibility, and the legal framework for businesses in Canada and the U.S.

Corporate Social Responsibility (CSR)

A business model through which companies strive to balance legal, economic, ethical, and social decisions to benefit society and the environment while maintaining positive brand image.

Sustainable Development Goals (SDGs)

A set of $17$ targets established by the United Nations in September $2015$ designed to address global social and environmental needs to achieve peace and prosperity by $2030$.

Fiduciary Responsibility

The obligation of managers to safeguard company assets and manage funds in a trustworthy manner on behalf of the owners.

Agency Problem

A situation where the personal interests of the managers do not align with the best interests of the owners or investors who employ them.

Bill 198

Also known as Ontario's Keeping the Promise for a Strong Economy Act $2002$, this law requires CEOs and CFOs to attest to the accuracy of financial statements and imposes penalties for fraud.

Minimum Wage

The lowest hourly rate an employer is legally required to pay employees, as determined by provincial or state governments; for example, the Ontario rate was set to reach $15.00$ on January $1$, $2019$.

Canadian Pension Plan (CPP)

A mandatory government program in Canada providing employees with retirement funds.

Workers' Compensation

Insurance that covers medical costs and lost wages for employees who experience injuries while performing their jobs.

Canada Labour Code

Federal legislation that governs workplace health and safety for employees of the federal government, Crown agencies, and specific federal corporations across Canada.

Occupational Safety and Health Act (OSHA)

Primary legislation in the United States enacted in $1970$ to regulate workplace health and safety standards.

Consumer Rights

A set of ethical and legal protections for buyers, including the right to safe products, the right to be informed, the right to choose, and the right to be heard.

Philanthropy

Voluntary business actions or donations, such as supporting charities or community projects, intended to improve society beyond profit-making obligations.

Carroll's Corporate Social Responsibility Pyramid

A framework that organizes CSR into four simultaneous responsibilities: economic (required), legal (required), ethical (expected), and philanthropic (expected/desired).

Economic Responsibilities

The baseline requirement for businesses to be profitable and sustainable so they can continue operating and providing goods and services to society.

Corporate Citizenship

The degree to which a company fulfills its economic, legal, and ethical obligations toward its various stakeholders.

Business Law

The rules, codes, and regulations that establish the legal framework within which companies must operate.

Legal Compliance

The practice of conducting business activities within the established boundaries of all local, national, and international regulations.

Employment Equity Act

Legislation designed to prevent discrimination and improve employment opportunities for women, Indigenous peoples, persons with disabilities, and visible minorities.

Canadian Charter of Rights and Freedoms

A binding legal document that secures basic human rights for all Canadians, including fundamental freedoms and equality rights.

Canadian Human Rights Act

Law extending protection against discriminatory practices based on race, religion, age, sex, sexual orientation, disability, and other prohibited grounds.

Employment Standards Act (ESA)

Ontario provincial legislation that outlines employee rights and employer obligations regarding wages, work hours, leave, and termination.

Triple-bottom-line Reporting

A framework used to measure corporate performance based on three parameters: social, environmental, and economic (often referred to as people, planet, and profit).

ESG

Standards for Environmental, Social, and Governance performance used primarily by investors to assess a company's sustainability and ethical impact.

FTSE4Good Index Series

A series of indices designed to track the performance of companies that meet specific ESG criteria.

Greenwashing

The deceptive practice of presenting a company or product as more environmentally friendly or sustainable than it truly is.

Ethics

The branch of philosophy focused on determining what is morally right and wrong, guiding personal and professional conduct.

Ethical Issue

A complex social question involving controversy over the most appropriate or morally correct course of action.

Ethical Lapse

A failure to follow ethical principles, resulting in a mistake or error in judgment that causes a harmful outcome.

Ethical Dilemma

A situation where an individual must make a choice between options that are not clearly right or wrong, or where the right action has negative consequences.

Conflict of Interest

A situation where an individual must choose between personal gain and the interests of the business or its stakeholders.

Insider Trading

The illegal act of buying or selling stocks based on non-public information that gives the trader an unfair advantage over the general public.

Conflict of Loyalty

An ethical bind where an individual's personal allegiances to friends or family compete with their professional responsibility to an employer.

Whistleblower

A person who exposes internal organizational wrongdoing, such as fraud, abuse, or safety risks, to individuals or bodies that can take corrective action.

Sexual Harassment

Unwelcome sexual advances or conduct that interferes with employment or work performance, creating a hostile environment.

Inclusive Workforce

A recruitment strategy aimed at hiring underrepresented groups to enhance organizational creativity and better reflect marketplace demographics.