Course/Year/Section:

MODULE 1 WEEK 1
A.Learning Outcomes:

a.Introduce self to classmates and teachers

b.List expectations for the course

c.Discussion of mission,vison and core values of the school

d.Understand the concept of governance

eK.now the various models of corporate governance.

f.Categorize the theories affecting corporate governance development.

B. Concept (Generalization)

Before the start of any discussion or opening of the new lesson or topic ,you will need to list down
expectations for the course . After that, you will need to know the schools, mission, vision and core
values for you to be familiar with .These 5 weeks will be dealing with the discussion about Social
Responsibility Framework. To start with you must be able to know the definition of Corporation,
Importance of Social Responsibility and Good Governance,A brief History of CSR

Introduction

The concept of “governance “is not new. However it means different things to different people,
therefore we must get our focus right. The actual meaning of the concept depends on thelevel of
governance we are talking about ,the goals to be achieved and the approach being followed.

The concept has been around in both political and academic discourse for a long time, referring in a
generic sense to the task of running a government, or any appropriate entity for that matter. In this
regard the general definition provided by Webster’s Third New International Dictionary(1986-982)is
some of assistance, indicating only that governance is a synonym for government, or “the act or process
of governing, specifically authoritative direction and control “. This interpretation specifically focuses on
the effectiveness of the executive branch of government.

The working definition used by the British Council, however, emphasizes that” governance” is a
broader notion than government(and for that matter also related concepts like the state, good
government and regime), and goes on to the state “Governance involves interaction between the formal
institution and those in civil society. Governance refers in a process whereby elements in society wield
power, authority and influence and enact policies and decisions concerning public life and social
uplifment.”

National/provincial government decision makers, appointed local decisions makers,formal decision

makers-shape the city-formally and informally organized

Elected local officials media-middle level government officers; national & local education providers &
experts private sector employees;CSOs,PVOs

Mafias-small scale enterpreneurs;trade unions

NGOs;CBOs-daily wage earners;low level government employee;workers in the informal sector women

The Urban Middle Class-uninformed,uninterested,disorganize,but has the greatest potential to bring

about change

The Urban Poor-suffer the most,are exploited,but beginning to get organized

“Governance” therefore ,not only encompasses but transcends the collective meaning of related
concepts like the state,government,regime, and good government many of the elements and principles
underlying “good government”have become an integral part of the meaning of “governance”. John
Healey and Mark Robinson define”good governance” as follows ;”It implies a high level of organizational
effectiveness in relation to policy and its contribution to growth, stability and popular welfare. Good
government also implies accountability,transparency,participation,openness, and the rule of law . It does
not necessarily presuppose a value judgement, for example a healthy respect for civil and political
liberties,although good government tends to be a prerequisite for politicallegitimacy”.

C. Example and discussion

The Corporation
A corporation is a legal entity created by an individual or group of shareholder who have
ownership of the corporation ( through share of stocks issued by a corporation) to engage in business
activities. Monks and MInow (2011) defines a corporation as a structure established by law to allow
different parties to contribute to capital, expertise, and labor or the minimum benefit of all them. Their
ownership of the corporation is generally represented by their holding of common stock ( one
share=one vote).

Importance of Social Responsibility and Good Governance

 The way a corporation conducts its business has profound effects on individuals in the society
they operate. Corporations have continued to grow and can sometimes influence government policy
through political lobbying. Imagine a society where drinking water becomes a problem when its water
resources when its water resources are being polluted by companies dumping their waste into lakes,
rivers, and oceans or when you wake up one day to find out that the bank where you have to put all
your savings into collapsed overnight. Who should be accountable?

A Corporate Social Responsibility

Corporate social responsibility (CSR) is a manifestation of good corporate governance, a

Complimentary concept that we will be discussing more in-depth in Chapter 3 CSR is the responsibility of
companies to act and behave ethically to satisfy their various stakeholders needs. It is an ongoing
commitment of organizations to ensure accountability to the stakeholders their existence impact.

Economic-An expectation of profit is natural when stakeholders form corporations.

Legal -A corporation is created through law and such, must abide by the rules and regulations
imposed for fairness and justice.

Ethical -During what is right for stakeholders is what ethical companies should aim for. Society expects
companies to take on this responsibility beyond what is required of them legally.

Philantropic-To fulfil this responsibility companies need to truly embrace philanthropy meaning issues
that pertain to the improvement of human illness must be addressed without compromise. This
responsibility however is not required nor expected but rather desired by companies.

A brief History of CSR

CSR can be traced back to the industrial revolution when there was growing concern for the
well-being of workers and its effect on their productivity. The industrial revolution was responsible for
the for the economic growth of nation
CSR was officially introduced in the early 1950’s through American economist and Educator
Howard Bowen’s(1953) seminal work on social responsibility. Boven paved the way for the succeeding
academic research and management practice of CSR.
In the Philippines ,CSR started as donations from various businesses in the 1960’s.Activities
from this decade were unorganized and sporadic.

Drivers and Barriers of CSR

How can one strengthen the propagation of CSR? And what are some of the barriers it needs to
contend with for companies to embrace it fully?
Below is an Illustration of the opposing forces of CSR:

DRIVERS ____ C __ BARRIERS

Regulation ____ ___ Limited financial Resources

Market Behavior ____ S __ Profit Maxiimization

Social activism

Culture

Strategy ___ R ___ Availability of human resources

Drivers

Regulations- Regulation and law provide a framework that companies must comply with

Market behaviour-Benchmarks have been established because of companies best practices that use CSR
as a builder of reputation ,how the market behaves and influences; and how companies engage in their
perspective CSR initiatives and have become a source of competitive advantage

Social Activism-How stakeholders in society react and voice out their concerns to corporations publicly
through various means (such as social media ,demonstration, lawsuits ,and the like)have impacted how
organization behave

Culture-Culture is a mixture of beliefs , norms, symbols, and the heritage that a particular country or
geographic area shares and practices.

Strategy-Perhaps the most significant driver of CSR is strategy.CSR in its planning form the different
functional areas of a company fortifies the relationship and becomes a creator of value that benefits the
corporation in the long term.

Barriers

Limited financial resources- As with Caroll’s economic perspective of CSR, a company needs to be
profitable and take care of its own needs before it has the ability and resources to engage effectively in
social responsibility.
Profit maximization-A company that single- minded focuses on operational efficiency is usually driven by
profit maximization. According to Kolstad (2007), most executive support the Friedmanian view of
maximizing returns to shareholders despite the growing literature on CSR’s positive effects on corporate
financial performance,persistence, and acceptance of maximizing profits act as barriers to CSR.

Avalaibity of human resources-No matter how good the intentions are in promoting CSR in
organizations it will need efficient mobilization through employee involvement and engagement in the
programs.

D. Exercises

Question for discussion

1. Where should the CEO focus her CSR efforts? How should she prioritize her desired
engagements?