The Triple Bottom Line and Stakeholders
The Triple Bottom Line: People, Planet, Profit
- measures an organizations social, environmental, and financial performance * represents people, planet, and profit
- success can be measured through a social audit * a systematic assessment of a company’s performance in implementing socially responsible programs * ex:a firm may support a foundation or make donations to non-profit organizations or allocate staff time to pro-bono work
- very important because it affects everyone * focuses not only on businesses, but also social communities and the business’s impact on the planet * this framework provides a more sustainable future that considers both social and environmental sustainability
Internal Stakeholders
- consist of employees, owners, and the board of directors
- consist of all of those who can claim the organization as their legal property
- members elected by the stockholders to see that the company is being run according to their interests
External Stakeholders
- people or groups in the organization’s external environment that are affected by it * important because by monitoring business activities, buying products or services, and creating basic expectations, they help ensure a safe and fair market,
- consist of 11 groups that present an organization with daily tasks to handle * includes customers, suppliers, competitors, labor force, special interest groups and government regulation
- refers to the macro-environment such as economic, technological, and sociocultural
The Sarbanes-Oxley Reform Act
- white collar crime * illegal trading, ponzi schemes, and other white-collar crimes dominated the headlines in early 21st century
- sarbanes-oxley act of 2002: * established requirements for proper financial record keeping for public companies * CEO and CFO must personally certify the organization’s financial reports * senior executives prohibited from taking personal loans/lines of credit * penalties of as much as 25 years in prison for noncompliance
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