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SMMCG9[CS-4] Stakeholders and Governance - Coggle Diagram
SMMC
G9
[CS-4] Stakeholders and Governance
Group Members
Anna
Phoebe
Pete
Adiyasa Gao
Fion
Levi
Jerry
Public Firms and Their Role in Society
Corporate Social Responsibility
Mechanisms of Corporate Governance
Recent Developments
Two Central Challenges
Over-emphasis on shareholders and return on equity
Over-emphasis on measurable short-term financial metrics
Broadening the mission
Corporate social responsibility
Sustainability goals
Balance scorecard
Financial
EVA
Profitability
Growth
Customer
Differentiation
Cost
Quick Response
Operations
Product developed
Order fulfillment
Demand management
Organizational
Leadership
Learning
Ability to change
Ecosystem Strategies
Business ecosystem
An economic community supported by a foundation of interacting organizations and individuals the organisms of the business world
Examples
Malls
Toyota supplier-dealer network
Apple
Amazon
Facebook
Silicon Valley
Coursera
Particularly salient for many modern platform based businesses
Protection From Shareholders
Old approaches
Poison pills
Going / staying private
Private equity
Unicorns
Dual class shares
The parable of WeWork
Problems among stakeholders
Board of directors
It may reduce cost when company find a better board to monitor the company.
Stock price
Let manage focus on company and stock price in the intermediate interval.
Recuritment
Use different matrix to make the income statement good looking.
Institutional investors
High-influenced directors may effect manager.
Takeover
Low stock price may influence people's image to company.
Debit
It may influence company's operating strategy.
Agency problem
Mechanisms
Risk bearing principals
Solving from managers
Lessen problems of separation of ownership
Corporate governance
General Strategic oversight and guidance
Selecting, evaluating and compensating the CEO
Overseeing CEO succession plan
Providing guidance
Reviewing, monitoring, and approving strategic initiatives
Conducting a risk assessment and mitigation
Ensuring a firm's audited financial statement
Ensuring the compliance with laws and regulations
The Pyramid of Corporate Social Responsibility
Philanthropic Responsibilities
Corporate citizenship
Ethical Responsibilities
Do what is right, just, and fair
Legal Responsibilities
Laws and Regulations are society's codified ethics define minimum acceptable standard
Economic Reponsibilities
Gain and sustain competitive advantage
The pyramid of corporate social responsibility is a theoretical concept that implies that corporate social responsibility is presented by four dimensions: economic, legal, ethical, and philanthropic responsibility.
Responsibility of Managers
Economic responsibilities
Legal responsibilities
Laws and regulations
Protection of the economic interest of the company
The ethical responsibilities
Doing what is right, just and fair
Corporate social responsibility
Help build competitive advantage
Depend on where you do business
United Arab Emirates , Japan, India are less CSR
China, Brazil, Germany are more CSR
Value creation framework
What's your customer base and how are you bringing in non-consumers
Considered in terms of a value creation framework
Focus on creating new regional clusters
Corporate Social Responsibility
Corporate governance
Elationships among the stakeholders that is used to determine and control the strategic direction and performance
Agency costs
That the principal is the one paying to have something done
Incentive cost
Provide the agent with more incentives
Monitoring costs
Principal can monitor the agent's behavior more
EX.McDonald's
Enforcement cost
Penalties for non-compliance
Minimize the cost
Mechanisms to direct and control the firm
Mechanisms are to ensure the pursuit of the strategic goals of the company
How to create a good Corporate governance
Adverse selection problem
Moral hazard problem
Bad EX.Bernie Madoff
Ponzi scheme
Three Core Areas
Public Firm
Corporate Social Responsibility
Governance Mechanisms
Stakeholders
External
Governments
Unions
Suppliers
Communities
Customers
General public
Internal
Managers
Shareholders
Bondholders
Employees
Board Members
Company's Success :tada:
managing different shareholders' interests
balancing the interests of shareholders
Public Firm
backbone of economy
Characteristics
2. Transferability of investor interest
Buying and selling of stocks by stock owners
3. Legal personality
BOD ---responsible for all of the stakeholders in the corporation
1. Limited liablilty for customers
key to a publicly traded corporation
4. Separation of ownership and control
ownership
extra income
residual claim
control
stockholders (managers)
Hierarchy of authority
Beyond game rules --- Have rules of the whole corporation game
Shareholder Primacy Age
Companies' obligations --- Shareholders
Dilemma--- public operations
Reinforcement--- reality of modern financial markets
Shareholders
Board Of Director
Management
Employees
Responsibility
Stakeholders of Company
Germany
France
China
Japan
Different Corporate laws
Separation of Ownership and Control
Enron Corporation
Their simplistic version
Essentially
Did nothing
On the books
Move up the stock price and get more bonuses
Managerial actions affect the economy
1 more item...
Global financial crisis
Real estate bubble burst
Collapse in the pricing
Agency problems
Stakeholder Analysis
Who are stakeholder?
Interests and Claims
Decisions of stakeholders
Maintain balance
Keep the organization together
Doesn't affect the most important stakeholders
Economic, Legal, Ethical, and Philanthropic responsibilities
Corporate social responsibility pyramid
Customers
Suppliers
Community
Employees
