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Questions and Answers
What is the primary purpose of a corporation?
Which of the following is NOT a responsibility of shareholders?
What does the ethical dimension of Corporate Social Responsibility emphasize?
Which approach involves compliance with governmental laws and regulations?
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What is a key responsibility of the Chief Executive Officer (CEO)?
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Which of the following funds corporate growth and operational expansion?
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Philanthropical responsibility in corporate social responsibility includes which of the following?
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What is one of the roles of the board of directors?
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What is a primary goal of many businesses?
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What is required for effective CSR implementation?
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Which of the following is NOT a driver of corporate social responsibility?
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Why can CSR activities sometimes conflict with profit maximization?
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What does the environmental scan in effective governance involve?
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How do corporations that engage in socially responsible practices benefit?
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What is the primary role of shareholders in a corporation?
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Which element is essential in the formulation of strategy?
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Which of the following can be considered a barrier to corporate expansion?
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What is a characteristic of good governance practices?
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What is one primary function of the Securities and Exchange Commission (SEC)?
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How do social movements influence corporate behaviors?
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Which type of corporation is typically formed for non-profit purposes?
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Which factor can significantly drive a company's corporate social responsibility initiatives?
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What are common drivers of corporate social responsibility?
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What is a unique feature of a One Person Corporation?
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Which group is primarily responsible for the financial interests of a company?
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What is the primary goal of proactive risk management in organizations?
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Which of the following best describes Stakeholder Theory?
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How can engaging in Corporate Social Responsibility (CSR) positively impact a community?
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Which of the following elements is NOT included in good governance?
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What leads to market differentiation for companies concerned with social responsibility?
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Which of the following stakeholders plays a key role in corporate governance?
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What is Strategic CSR primarily focused on?
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Which theory focuses on the relationship between the owner and the agent in governance?
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What is the primary goal of good governance in relation to compliance and risk management?
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What does transparency in governance refer to?
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Which approach emphasizes the importance of board diversity and independence?
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What is one of the primary functions of the board in corporate governance?
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Which theory is primarily concerned with the availability of resources and its impact on performance?
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What does accountability in corporate governance entail?
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Which of the following best describes Stakeholder Theory?
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Study Notes
Corporation
- Legal entity distinct from its owners
- Can enter contracts, own assets, sue and be sued, pay taxes, borrow money
- Run by management, supervised by board of directors
- Owned by shareholders (stockholders) who have voting rights
Corporate Social Responsibility (CSR)
- Refers to a company's ethical and responsible behavior to satisfy stakeholders
- 4 dimensions: economic, legal, ethical, and philanthropic
Economic Responsibility
- Focuses on profitability and financial sustainability
Legal Responsibility
- Adherence to laws and regulations from governments
Ethical Responsibility
- Beyond legal requirements, doing what's morally right
Philanthropic Responsibility
- Voluntary activities such as charitable donations, community involvement
Drivers of CSR
- Regulations: Governments and regulatory bodies require responsible practices
- Market Behavior: Consumers demand ethical and sustainable brands
- Social Activism: Movements pressure companies to address social issues
- Culture: Strong company culture encourages ethical behavior and CSR initiatives
- Strategy: CSR becomes a part of long-term strategic vision for sustainability and reputation
Barriers of CSR
- Limited Financial Resources: CSR initiatives often require investment.
- Profit Maximization: CSR may conflict with profit-driven goals.
- Availability of Human Resources: Effective CSR implementation needs expertise.
Importance of Good Governance and Social Responsibility
- Ethical Behavior: Ensures ethical operations, considering the impact on society and stakeholders.
- Reputation and Trust: Builds positive image and trust with customers, employees, and investors.
- Risk Management: Proactively addresses issues to minimize risks of litigation and backlash.
- Attraction and Retention of Talent: Entices employees seeking ethical and responsible employers.
- Market Differentiation: Creates a competitive edge in ethical-conscious markets.
- Community Impact: Improves well-being and contributes to solving societal challenges.
Good Governance
- Transparency and Accountability: Ensures open operations and accountability for decision-makers.
- Effective Decision-Making: Strong governance structures lead to sound decision-making.
- Compliance and Risk Management: Adherence to laws and policies minimizes risks.
- Stakeholder Confidence: Builds confidence in organizations demonstrating good governance.
Approaches to Corporate Governance
- Transparency: Openness and honesty in operations.
- Accountability: Upholding legal, contractual, and social obligations to shareholders and non-shareholders.
- Establish Board Composition: Focus on diversity and independence of board members.
- Risk Management: Identifying and managing all types of risks.
Functions of the Board
- Accountability: Responsibility for ethical conduct.
- Monitoring and Supervising: Overseeing management performance.
- Policy Making: Setting company rules and managing operations.
- Strategy Formulation: Guiding the company to achieve its mission and vision.
Board Membership
- One to 15 directors for corporations, owning at least one share.
- Different categories: Independent, Non-Executive, and Executive directors.
Theoretical Perspectives on Corporate Governance
- Stakeholder Theory: Most influential model, considering stakeholders' interests.
- Agency Theory: Focused on owner-agent relationship.
- Resource Dependency Theory: Organizational performance is influenced by resource availability.
- Stewardship Theory: Focuses on the stewardship role of company owners.
- Transaction Cost Theory: Minimizing the costs of exchanging resources with the environment.
- Political Theory: Examines the philosophical aspects of government and its influence.
The "Revised Corporation Code of The Philippines" (RCC) – 11232
- Aims to simplify business operations and promote economic growth in the country.
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Description
This quiz covers key concepts regarding corporations and their responsibilities towards stakeholders. Explore the different dimensions of Corporate Social Responsibility (CSR) and understand the drivers behind ethical business practices. Test your knowledge on how corporations can balance profitability with ethical behavior.
