BA0051 Good Governance and Social Responsibility Comprehensive Flashcards

Comprehensive vocabulary flashcards covering the social responsibility framework, legal issues, corporate governance theories, and the Carlos Ghosn case study.

Corporation

A legal entity created by shareholders to engage in business as defined by Monks & Minow (2011).

Attributes of a Corporation (The four core characteristics)

1. Limited liability, 2. Transferability of ownership, 3. Legal personality, and 4. Centralized management.

2019 Revised Corporation Code (RCC)

Philippine legislation that introduced reforms such as perpetual corporate terms, the One-person corporation (OPC), and removal of minimum subscribed/paid-up capital.

Corporate Social Responsibility (CSR)

Ethical behavior by a corporation intended to satisfy various stakeholders.

Carroll’s 4 Perspectives of CSR

The multi-faceted framework of responsibility consisting of Economic, Legal, Ethical, and Philanthropic dimensions.

Drivers of CSR

regulation, market behavior, social activism, and culture

Balanced Scorecard

A measurement tool for CSR developed by Kaplan & Norton (1996).

Triple Bottom Line

A CSR measurement framework emphasizing the three Ps: People, Planet, and Profit.

Kapwa

A Filipino term for 'fellowship' described by Ng & Rivera (2018) as essential in Filipino leadership.

Free Market

An economic environment with minimal government intervention, famously advocated by Milton Friedman.

Sarbanes-Oxley Act (SOX)

A $2002$ law enacted to increase financial accountability following scandals like Enron, Tyco, and WorldCom.

Dodd-Frank Act

Legislation passed in response to the $2008$ financial crisis that focused on banking sector regulation.

OECD Principles of Corporate Governance

A six-principle framework covering governance foundations, shareholder rights, institutional investors, stakeholder roles, transparency, and board responsibilities.

OECD

Organisation for Economic Co-operation and Development

Governance vs. Management

Governance refers to board direction and oversight, whereas management refers to day-to-day operations.

Agency Theory

A theoretical perspective focused on the relationship and potential conflict of interest between an agent and a principal.

Stewardship Theory

A theory suggesting that the agent acts as a steward who serves the best interests of the principal.

Principles-based Governance

An approach to corporate governance characterized by the directive to 'comply and explain'.

Most Important Function of the Board

Strategy formulation.

Board Composition (Philippines)

A board consisting of $1$ to $15$ directors, where each director must own at least $1$ share.

Independent Director

A board member who has no conflict of interest with the corporation.

Required Committees for Publicly Listed Companies

The Audit Committee, Remuneration Committee, and Nomination Committee.

Family Governance

A governance structure that balances economic value with emotional value based on the work of Schmid, Rouvinez & Poza (2014).

Strategy

A plan of action designed to achieve specific objectives as defined by David (2017).

Stakeholder Theory

The concept that companies are responsible to all affected parties, including customers, employees, and society, rather than just shareholders.

Value Creation

The ultimate goal of business, focusing on sustainable value for all stakeholders.

The Carlos Ghosn Scandal

A major corporate governance failure involving undiclosed compensation of more than $140 \text{ million}$ and misuse of company funds at Nissan.

Ernst & Young ShinNihon

The auditor that questioned Nissan's management practices as early as $2013$.

Nissan Market Capitalization Drop

A decline of $8.43\%$ (approx. $\text{₱}1.6 \text{ billion}$) on the day of Carlos Ghosn's arrest.

Corporation

A legal entity created by shareholders to engage in business as defined by Monks & Minow (2011).

Attributes of a Corporation

The four core characteristics: 1. Limited liability, 2. Transferability of ownership, 3. Legal personality, and 4. Centralized management.

2019 Revised Corporation Code (RCC)

Philippine legislation that introduced reforms such as perpetual corporate terms, the One-person corporation (OPC), and removal of minimum subscribed/paid-up capital.

Corporate Social Responsibility (CSR)

Ethical behavior by a corporation intended to satisfy various stakeholders.

Carroll’s 4 Perspectives of CSR

The multi-faceted framework of responsibility consisting of Economic, Legal, Ethical, and Philanthropic dimensions.

Drivers of CSR

Factors including regulation, market behavior, social activism, and culture, with strategy identified as the most significant.

Balanced Scorecard

A measurement tool for CSR developed by Kaplan & Norton (1996).

Triple Bottom Line

A CSR measurement framework emphasizing the three Ps: People, Planet, and Profit.

Kapwa

A Filipino term for 'fellowship' described by Ng & Rivera (2018) as essential in Filipino leadership.

Free Market

An economic environment with minimal government intervention, famously advocated by Milton Friedman.

Sarbanes-Oxley Act (SOX)

A $2002$ law enacted to increase financial accountability following scandals like Enron, Tyco, and WorldCom.

Dodd-Frank Act

Legislation passed in response to the $2008$ financial crisis that focused on banking sector regulation.

OECD Principles of Corporate Governance

A six-principle framework covering governance foundations, shareholder rights, institutional investors, stakeholder roles, transparency, and board responsibilities.

Governance vs. Management

Governance refers to board direction and oversight, whereas management refers to day-to-day operations.

Agency Theory

A theoretical perspective focused on the relationship and potential conflict of interest between an agent and a principal.

Stewardship Theory

A theory suggesting that the agent acts as a steward who serves the best interests of the principal.

Principles-based Governance

An approach to corporate governance characterized by the directive to 'comply and explain'.

Most Important Function of the Board

Strategy formulation.

Board Composition (Philippines)

A board consisting of $1$ to $15$ directors, where each director must own at least $1$ share.

Independent Director

A board member who has no conflict of interest with the corporation.

Required Committees for Publicly Listed Companies

The Audit Committee, Remuneration Committee, and Nomination Committee.

Family Governance

A governance structure that balances economic value with emotional value based on the work of Schmid, Rouvinez & Poza (2014).

Strategy

A plan of action designed to achieve specific objectives as defined by David (2017).

Stakeholder Theory

The concept that companies are responsible to all affected parties, including customers, employees, and society, rather than just shareholders.

Value Creation

The ultimate goal of business, focusing on sustainable value for all stakeholders.

The Carlos Ghosn Scandal

A major corporate governance failure involving undiclosed compensation of more than $140 \text{ million}$ and misuse of company funds at Nissan.

Ernst & Young ShinNihon

The auditor that questioned Nissan's management practices as early as $2013$.

Nissan Market Capitalization Drop

A decline of $8.43\%$ (approx. $\text{₱}1.6 \text{ billion}$) on the day of Carlos Ghosn's arrest.