Corporate Social Responsibility and Corporate Governance

Vocabulary flashcards defining key concepts in Corporate Social Responsibility (CSR), stakeholder management, and corporate governance frameworks including the King Reports.

Corporate Social Responsibility (CSR)

An ongoing commitment by a business to behave ethically and contribute to the economic and social development of employees and the community.

Corporate Citizenship

When a business acts responsibly towards society and the environment.

Stakeholders

Individuals or groups affected by or interested in the activities of a business.

Primary Stakeholders

Stakeholders directly affected by the success of a business, e.g. employees and shareholders.

Secondary Stakeholders

Stakeholders indirectly affected by business activities, e.g. government, community and environment.

Ethical Business Practice

Conducting business honestly, fairly and responsibly.

CSR Policy

Guidelines explaining how a business will fulfil its social and environmental responsibilities.

Goodwill

The positive reputation and support a business gains from the community.

Corporate Sustainability

Meeting current business needs without compromising future generations.

Socio-economic Problems

Issues such as poverty, unemployment, inequality and poor education.

Arguments FOR CSR

Improves business image, creates goodwill, addresses social problems, protects the environment and promotes sustainability.

Arguments AGAINST CSR

Reduces profits, distracts from core activities, may increase prices and creates expectations.

Core Business Activities

The main activities a business carries out to achieve its objectives and generate profit.

Sustainable Development

Meeting present needs without compromising future generations' ability to meet their needs.

Hit-and-Run Approach

When a business starts a CSR programme but withdraws without ensuring long-term benefits.

Disposable Income

Money individuals have available to spend after paying taxes.

Environmental Sustainability

Operating in a way that reduces pollution, waste and depletion of natural resources.

Social Sustainability

Addressing workplace issues such as health and safety, equality and skills development.

Making Society Sustainable

Improving communities through education, healthcare and social development programmes.

Supply Chain

The network of suppliers and processes involved in producing and delivering a product.

Value Chain

Activities involved in creating and delivering value to customers.

Sustainable Suppliers

Suppliers who operate ethically and minimise negative effects on society and the environment.

Non-renewable Resources

Natural resources that cannot be replaced within a short period, e.g. coal and oil.

Carbon Tax

A tax on carbon emissions to encourage businesses to reduce pollution.

BBBEE

Broad-Based Black Economic Empowerment; aims to increase economic opportunities for previously disadvantaged South Africans.

Occupational Health and Safety

Measures taken to protect employees from workplace injuries and health risks.

Shareholders

Individuals or organisations that own shares in a company and expect a return on their investment.

Employees

People working for a business who expect fair remuneration, safe working conditions and job security.

Suppliers

Individuals or businesses providing raw materials, goods or services and expecting prompt payment.

Consumers

People who purchase goods and services and expect good quality products at reasonable prices.

Competitors

Businesses selling similar or substitute products that compete for customers.

Government

Collects taxes, provides infrastructure and regulates business activities.

Community

People living where a business operates who expect it to contribute positively to society.

Trade Unions

Organisations that represent employees and protect their rights and interests.

ABET

Adult Basic Education and Training; programmes aimed at improving adult literacy and basic education.

PPP

Public-Private Partnership; cooperation between government and private businesses to provide infrastructure or services.

CSR Programme

A planned project through which a business fulfils its social and environmental responsibilities.

Buy-in

Support and commitment from management and employees towards a business initiative.

CSR Strategy

A plan outlining how a business will achieve its social and environmental responsibilities.

Monitoring

Regularly checking the progress and effectiveness of a CSR programme.

Offensive CSR

Proactively identifying and addressing social and environmental problems.

Defensive CSR

Protecting the business's reputation by ensuring its activities are legal and responsible.

Transparency

Openly communicating relevant information about business decisions and performance.

Stakeholder Relationships

Maintaining positive relationships with stakeholders through communication and cooperation.

CSR Reporting

Communicating a business's social, environmental and economic performance to stakeholders.

Integrated Reporting

Reporting on the financial, social and environmental performance of a business.

Corporate Governance

Rules and processes used by top management to direct and control a business while considering stakeholders' interests.

King Committee

Established in 1992 to clarify corporate governance and its implementation in South Africa.

King I

Introduced recommendations for good corporate governance and responsibilities towards society.

Triple Bottom Line (TBL)

An approach considering People, Planet and Profit.

People

The social impact of a business on employees and society.

Planet

The environmental impact of a business.

Profit

The financial and economic performance of a business.

Accountability

Taking responsibility for one's actions and decisions.

Independence

Making unbiased decisions without conflicts of interest or unfair influence.

Discipline

Demonstrating self-control and responsible behaviour when making business decisions.

Integrity

Acting honestly and truthfully in all business activities.

Fairness

Considering the interests of all stakeholders when making business decisions.

King II

Published in 2002 and introduced seven principles of good corporate governance.

King III

Released on 1 September 2009 and focused on responsible management, integrated reporting and director accountability.

Apply or Explain

Businesses must apply King recommendations or explain why they have chosen not to apply them.

King IV

Focuses on ethical leadership, accountability, sustainability and four governance outcomes.

Apply and Explain

Organisations are expected to apply all King IV principles and explain how they have applied them.

Fiduciary Duty

The legal responsibility of directors to act honestly and in the best interests of the business.

Independent Director

A director who can make objective decisions without unfair influence.

Audit Committee

An independent committee that monitors financial reporting, auditing and internal controls.

Risk Management

Identifying, assessing and managing potential risks that could affect a business.

Ethical Leadership

Leading a business honestly, responsibly and in a way that promotes ethical behaviour.

Remuneration

Payment or compensation received by employees and directors for their work.

Institutional Investor

An organisation that pools money to invest in securities, property or other assets.

King IV's Four Outcomes

Ethical culture, good performance, adequate and effective control, and trust and good reputation.

Ethical Culture

Creating an environment where honesty, integrity and responsible behaviour are encouraged.

Good Performance

Ensuring business strategies create sustainable value over the short, medium and long term.

Adequate and Effective Control

Ensuring systems, structures and processes are in place to manage and control the business.

Trust and Good Reputation

Building stakeholder confidence through responsible and ethical business practices.

Governing Body

The board or group responsible for overseeing corporate governance and ensuring organisational objectives are achieved.