PART ONE ·Look at the statements below and at the
five extracts from an article about broadening corporate
responsibility. ·Which extract (A, B, C, D or E) does each
statement (1-8) refer to ·For each statement (1-8), mark one
letter (A, B, C, D or E) on your Answer Sheet. ·You will need to
use some of these letters more than once.
A Executives are coming to understand that
they can’t meet their corporate responsibility simply by maximizing shareholder
value. Last year Price water house Coopers surveyed 1,161 chief executive
officers of companies from 33 countries. Some 68 percent of those polled said
that global corporate responsibility was vital to profitability. Meanwhile
citizens around the world have become more vocal in demanding that global
business beheld accountable for conduct that could undermine social,
environmental or economic progress. B Although
markets have encouraged more firms to act in a responsible manner in the global
economy, market forces have not been sufficient to ensure responsible behavior
all of the time. Moreover, the responsible firms that work harder to ensure that
workers or the environment are treated well as they make goods and services
could have higher costs, which may allow other competitors to gain market share.
The right mix of public policies can ensure that responsible firms are not
penalized. C Washington, D. C is drowning in
paper. Congress has voted on proposals to promote corporate responsibility.
Meanwhile, the President, executives and activists are all scurrying about in
search of additional proposals to make executives more accountable for their
companies’ financial reports. Given that capitalism today is global as well as
local, the US must work with its allies to write international corporate
governance norms. But we need to use this opportunity to think more broadly
about how to reassure global economic confidence long term. All of the reform
efforts to date focus on a narrow definition of corporate responsibility.
President Bush acknowledged in his July 9th speech, "There is no capitalism
without conscience." That is why the ultimate reform would encourage
corporations to also act responsibility towards their workers and the
environment. D The codes, including ones
promoted by the Department of State-the Voluntary Principles for Security and
Human Rights and the OECD Guidelines, are designed to help business protect
human rights in nations with poor human rights records. Corporate social
responsibility policies can also include EPA regulations that require
corporations to report on their global environmental liabilities. After all, the
costs of cleaning up can be a major drain on corporate profits. But these
policies are not well coordinated or known as CSR policies. Were someone to
compile an overview, we might gain a greater understanding of how such policies
can be made more effective. But there are some policies including tax policies
that encourage firms to shift production or their headquarters to nations with
weaker fiscal or regulatory systems. Other policies that may undermine global
corporate responsibility include corporate welfare and agricultural
protectionism. E The French government recently
overhauled French corporate law and mandated the disclosure of companies’ social
and environmental as well as profit performance. This is a good idea. The
British require pension funds to report on the social, environmental, as well as
profit performance of their investments. The Canadian government is also
examining a wide range of public policies to promote CSR. Perhaps the most
interesting development was that in 2001, with funding from the Atkinson
Foundation, five private citizens organized a commission on democracy and
accountability. Their final report issued 25 specific policy recommendations on
promoting global and domestic CSR. Stakeholders can’t simply rely on market forces to ensure global corporate social responsibility.