Corporate governance is a decision system that accelerates performance and manages risks.
Corporate social responsibility (CSR): It plays a significant role in business ethics by guiding companies to operate in ways that enhance society and the environment, rather than causing harm. CSR involves strategies and actions that ensure a company's operations contribute positively to societal goals, such as sustainability and ethical governance.
Business ethics: Business ethics involves applying ethical theories, such as consequentialism, deontology, and virtue ethics, to evaluate and improve business conduct. Companies are encouraged to adopt practices like corporate social responsibility and stakeholder management to ensure their actions align with ethical norms and avoid reprehensible conduct. In a business context, "reprehensible" refers to actions or behaviors that are morally or ethically unacceptable and deserving of strong criticism. This term is often used in discussions of business ethics, which examines the moral dimensions of commercial activities. Such behaviors not only violate ethical standards but can also damage a company's reputation, lead to legal consequences, and harm relationships with stakeholders, including customers, employees, and the community.
Social values: CSR is integral to business ethics as it aligns corporate activities with broader social values and expectations. It encourages companies to go beyond profit-making to consider their impact on stakeholders, including employees, customers, communities, and the environment. This approach can improve a company's reputation, foster trust with stakeholders, and potentially lead to better financial performance.
Accountability: CSR reports, often part of environmental, social, and governance (ESG) transparency, are tools for companies to communicate their sustainability efforts and ethical practices to stakeholders. These reports help to measure progress toward sustainable development goals and ensure accountability. However, there are criticisms that some companies use CSR as a public relations tool without making substantial changes to their core business practices. Thus, the effectiveness of CSR in promoting genuine ethical behavior depends on transparency, monitoring, and stakeholder engagement.
Corporate governance is a decision system to accelerate performance and manage risks. It is important to emphasize that governance is fundamentally about having a systematic approach to making decisions within the corporate entity. GRC can be used to raise visibility and awareness for many things that are captured at the different levels of the organizational hierarchy and bring them in front of the leadership team to oversee strategy management.
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