Governance and Ethics: Jocelyn Damon Jdamon@iie - Ac.za

Governance
and ethics
Jocelyn Damon
[email protected]
My details
• Jocelyn Damon
• Email: [email protected]
• Available during workdays,
Monday to Friday, 08:00 to
17:00
• Please allow me 48 hours
to respond
Theme 1: The Governance of Listed Companies
LO1: Explain the concept of corporate citizenship with specific reference to:
• Corporate social responsibility (CSR) and corporate social investment (CSI);
• The impact of companies on society; and
• How the profit motive of a company is married with corporate citizenship.
LO2: Distinguish between the types of corporate social responsibility.

LO3: Apply the key principles of responsible companies and what they entail.
LO4: Critically discuss how the CSR obligations of companies in South Africa are regulated.
LO5: Apply the concept of corporate sustainability to a set of facts.
LO6: Analyse the importance of the following in sustainability reporting:
• Identifying the company’s stakeholders.
• Risk, reputation, and sustainability.
LO7: Analyse the importance of sustainability in the concept of the triple bottom line.
LO8: Assess how environmental responsibility of companies is regulated in South Africa.
LO9: Evaluate the business reasons for companies to implement sustainable business practices
in terms of the concept of the triple bottom line.
Theme 1: The Governance of Listed Companies
LO10: Explain how a company could try and achieve the right balance
of substance over form when it comes to implementing effective
corporate governance measures.
LO11: Describe how a culture of compliance could be created.
LO12: Explain how the board should approach the implementation of a
Corporate Governance Framework.
LO13: Apply the elements of good governance to a set of facts and
advise how they
Can Companies be citizens?
Although no body and no soul Companies are capable of far-
reaching impact on society
Economic institution + Corporate Citizen
Often difficult to separate corporate citizenship from other

corporate activities such as reputation building and marketing
Nowadays not enough for companies to make good products we

expect them to be good citizens
Q: in what ways can a company be good Citizens?

Corporate Citizenship is consequence of being integral part of
society (King 4)
As corporate citizen company has rights but also obligations to

society & natural environment
Corporate Citizenship involves how company uses its resources &

balances its needs with those of society to achieve positive lasting
outcomes for itself, society & environment
Companies must think how their activities affect societies in

which they operation & factor this into decision making
Nike
“Detox
challenge”
Tobacco
companies
McDonalds
Companies need
society’s “licence
to operate”
Companies corporate citizenship now as important is its
compliance & risk management
But must balance CSR with fundamental obligation to make a reasonable
CSR &
CSI
CSR: commitment of business
to managing & improving
economic, environmental &
social implications of its
activities at the firm, local,
regional & global levels
CSI: Corporate social
investment
: projects that are not directly
related to normal business
activities of company, usually
having strong developmental
approach & geared for benefit
& upliftment of communities
(within which company
•SUSTAINABILITY MEANS COMPANIES MUST FOCUS ON ‘TRIPLE
BOTTOM LINE’ –
WHERE CONSIDERATIONS OF ECONOMIC PROSPERITY,
ENVIRONMENTAL QUALITY AND SOCIAL JUSTICE COMBINE TO
SECURE THEIR LONG-TERM SUSTAINABILITY
• Marrying Profit with corporate citizenship
• Business must become sustainable in more than just

business terms
• Need balance between “compliance approach” & “value
driven one” (seeing CSR as a business opportunity)
• Key Principles of Responsible companies
• Ethics - internal / external stakeholders - code of ethics
• Accountability - transparency & integrity = reputation
• Governance - balance management of resources with
interests of stakeholders Financial returns- long-term growth
• Employment practices - legal obligations + fair and safe labour practices +
diversity + human rights Business relationships - “companies are judged by the
company they keep” - monitor CSR of partners Products & services - highest level
of service & products
• Community involvement - proactive relationship
with community Environment protection -
protect & restore environment
Sustainabili
ty
•Sustainable development: “development that meets the
needs of the present without compromising the ability of
future generations to meet their own needs”
•For business: sustaining company itself while sustaining the
natural resources on which the company relies
•King 4 & JSE Listing requirements require companies to
consider sustainability issues in their decision making
Three legs to sustainability:
1. Economic prosperity or economic sustainability - focus on

long term economic health
2. Environmental stewardship or environmental sustainability - “do
no harm” & help restore the environment from harm already
done
3. Social responsibility or socio-efficiency - development of human
beings
Sustainability reporting: aim to achieve transparent, consistent &
integrated disclosure of material forward looking information
presented in clear understandable form to allow stakeholders to
make informed assessment of economic value of company
Triple bottom line: companies must disclose their social &
environmental performance alongside their financial results
People - planet - profit triad
Companies must take both current snapshot & forward-
thinking view of company’s social, health & ethical practices
Legislati
on
Constitution of course - section 24 - right to environment that is
not harmful to health
National Environmental Management Act - directors can be held

liable for company transgressions
It makes sense…
Easier hiring of employees & better ability of
socially responsible company to attract &
retain top talent
Increased employee productivity
Reduced manufacturing expenses by reducing

waste
Reduced expenses at company’s commercial

sites through education & spreading
sustainability message
Increased market share from attracting

more customers, developing new markets
& generating increased revenue

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Governance

LO2: Distinguish between the types of corporate social responsibility.

Economic institution + Corporate Citizen

Often diﬃcult to separate corporate citizenship from other

Nowadays not enough for companies to make good products we

Q: in what ways can a company be good Citizens?

As corporate citizen company has rights but also obligations to

Corporate Citizenship involves how company uses its resources &

Companies must think how their activities aﬀect societies in

• Business must become sustainable in more than just

1. Economic prosperity or economic sustainability - focus on

National Environmental Management Act - directors can be held

Increased employee productivity

Reduced manufacturing expenses by reducing

Reduced expenses at company’s commercial

Increased market share from attracting

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