CSR and Corporate Governance Practices-Free-Samples for Students

Question: You are required to prepare a report to be submitted to the management committee of the venture capital fund identifying and making recommendations on the best corporate governance practices to be introduced into all entrepreneurial growth SME companies into which the venture capital fund will invest. Answer: Introduction The CSR acts as the global governance mechanism. It assists in the sustainable development of the society comprising of its health and welfare. Corporate Governance considers the outlook of the stakeholders. CSR and Corporate Governance are two interdependent terms. While CSR is a procedure through which the business ensures that it complies with the prescribed norms in letter and spirit and the ethical standards. Corporate Governance monitors that the company is complying with the applicable laws and regulations of the country and its operations are consistent with the international norms of behavior. In this report, the recommendations regarding the implementation of the CSR disclosure and Corporate Governance practices by a company which is listed on the Australia Stock Exchange shall be stated (ACCSR, no date). Corporate Social Responsibility (CSR) Disclosures required by the Listed Companies in Australia According to ASX (2018) CSR is the approach which is dedicated to the sustainable development by providing social, environmental and economic benefits for the stakeholders. The Australian Stock Exchange Board (ASX Board ) governs the environmental, social and governance risks (ESG) faced by the companies through its enterprise risk management framework. Its strategy is to manage these risks and to affect the society through its contribution in the financial market and its mechanisms to monitor the compliances followed by the companies. The ASX with the help of CSR promotes the awareness among its investors regarding the potential rewards and the risks of investing. It assists in the easy access of the tools and techniques to the investors which will safeguard their interests and protect them against frauds. In this regard, the ASX Corporate Governance Council has been formulated to establish a principle based framework for corporate governance policies. According to Chai et al. (2015) the ASX listing rules, the listed entities are required to reveal the extent to which they have complied with the corporate governance framework. They must explain through its If not, Why not reporting. These compliances bring transparency to the governance practices of the listed companies which help the investors in making informed decisions. ASX participates in the Carbon Disclosure Project which is related to the emissions and waste of the carbon gas. It has also participated in the FTSE4 Good Index Series which identifies the corporates which meet the social and environmental criteria. It has participated in World Federation of Exchange annual survey which describes the exchanges role in maintains sustainability (Adeneye Ahmed, 2015). Hence, ASX promote the policies related to ethics, code of conduct, anti-bribery and corruption, fraud control and whistleblower protection to safeguard the interests of the investors and promote the development of the corporates. Corporate Governance Practices Required to be complied by the Listed Companies in Australia The Corporate Governance is the set of rules and regulations which govern the listed companies in Australia. It is the mechanism by which the companies are accountable to their investors. Good corporate governance practices boost investor confidence which will enhance the capability of the organization to compete for investments (United Nations Industrial Development Organization, 2018). For this purpose, ASX Corporate Governance Council has been formulated .It laid down the Principles and Recommendations for the listed companies on the ASX. They were established with the intention to achieve the expectations of the shareholders and the investors. The Council has laid down the If not, Why not approach regarding the listed entities on the ASX. If the board of directors of the listed entity does not adopt any of its recommendations then they should explain why they have not adopted the recommendation under particular situation. This approach gives the overview to the investors regarding the information related to the companys policies of governance and administration. It facilitates the stakeholders and the investors to have a meaningful dialogue with the board of directors regarding the matters of decision making. It will help them to decide whether to invest in a particular company or not. Hence it safeguards the interest of the investors and enhances the goodwill of the company. Hence, the corporate governance practices states the roles and accountabilities of the board clearly and conveys them the methods how their performance would be monitored. They also assist in the composition of the board of directors, their responsibilities as per their skills so that they can perform their duties efficiently (ASX, 2014). Recommendations Corporate Governance and Corporate Social Responsibility are two interconnected terms which help the listed entities to administer their management in an efficient manner. The goal of the organization should be to formulate the most efficient framework which can enhance their performance and at the same time it should be in confirmation with the various compliances to be followed by the company. The corporate social responsibility should be in agreement with the corporate governance framework which describes the companys accountability to formulate such methods and procedures which do not impact the society and the environment adversely. Thus an ideal corporate governance framework assists the company to appoint an effective board and the strengthens the relationship of the organization with its stakeholders (Galant Cadez, 2017). Hence, the companies listed on ASX should assimilate the Corporate Governance practices and Corporate Social Responsibility in its constitution to enhance its growth and boost up the confidence of its investors Conclusion Hence, to conclude, the listed companies should adopt the principles laid down by the Corporate Governance practices and Corporate Social Responsibility in order to comply with the norms both in letter and spirit. The corporations not only boost up their long term profits by adopting these principles but also they enhance their market value through the transparency and disclosure norms. By following these principles the company can balance its economic, environmental and social growth. It can address the anticipations of the shareholders as well. The principles of Corporate Governance practices and Corporate Social Responsibility align the objectives of the listed entities to the aim of sustainable global development. The principles if properly implemented by the companies can bring various competitive advantage such as improved productivity, enhanced reputation and goodwill, better decision making processes and risk management frameworks (EY, 2013). References ACCSR (no date) What is CSR? [online]. Available from: https://accsr.com.au/what-is-csr/ [Accessed 9th February, 2018]. Adeneye, Y. B. Ahmed, M.(2015) Corporate Social Responsibility and Company Performance. Journal of Business Studies Quarterly. 7(1). ASX (2014) Corporate Governance Principles and Recommendations [online]. Available from: https://www.asx.com.au/documents/asx-compliance/cgc-principles-and-recommendations-3rd-edn.pdf [Accessed 9th February, 2018]. ASX (2018) Corporate social responsibility[online]. Available from: https://www.asx.com.au/about/corporate-social-responsibility.htm [Accessed 9th February, 2018]. Chai, J., Chang, P. , Wang, Z. Brew, Y. (2015) The Public Perception of Corporate Social Responsibility and Its Effects on Customer Behavior in China. American Journal of Industrial and Business Management.5,pp. 611-621. EY (2013) Corporate Social Responsibility in India[online]. Available from: https://www.ey.com/Publication/vwLUAssets/EY-Government-and-Public-Sector-Corporate-Social-Responsibility-in-India/$File/EY-Corporate-Social-Responsibility-in-India.pdf [Accessed 9th February, 2018]. Galant , A. Cadez ,S. (2017) Corporate social responsibility and financial performance relationship: a review of measurement approaches. Economic Research. 30(1),pp. 676-693. United Nations Industrial Development Organization (2018) What is CSR? [online]. Available from: https://www.unido.org/our-focus/advancing-economic-competitiveness/competitive-trade-capacities-and-corporate-responsibility/corporate-social-responsibility-market-integration/what-csr[Accessed 9th February, 2018].