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2.23     What is stewardship theory and how is it related to corporate governance?

Stewardship theory suggests that motive for serving on a board goes beyond a past papers purely self-interest perspective. This motive may be guided by a code or company purpose or directors may see themselves as stewards of a particular interest. It is generally under this banner that there has been an increase in the number of independent non-executive directors on boards, thus serving the interests of a large number of small shareholders or the community and environment. At times key suppliers or debt providers may take a place on a board to help protect their relevant interests. No matter what the interest they are stewards of some greater good, not just shareholder wealth. However, it may go beyond this as summarised by Peter Weinberg past papers (former Goldman Sachs executive):

“Serving on a board is like taking on a position in public service...It is not (and should not be) a wealth creation opportunity but a chance to play a role in the proper workings of our marketplace.” (p.43, Nordberg, 2008).

2.24     What is risk management and why is it included in the ASXCGC corporate governance principles and past papers recommendations?

Risk management is the systematic process of assessing the probability of something unexpected happening, and the establishment of policies and procedures to manage that risk. It is important for the board and management of enterprises to consider risk in order to properly understand the impact of the environment of their enterprise and to help ensure its survival into the future. It is included in the ASX principles of good corporate governance as it is fundamental for the decision makers in any enterprise to manage risk for purchase test banks.

2.25     Give some examples of each of Carroll’s four key responsibilities of business. Have any of these changed from one responsibility grouping to another over the last decade?

The four key responsibilities of business are economic, legal, ethical and discretionary. Many examples could be given.

1.   Economic — to provide goods at a fair price, to pay creditors on time, to ensure a suitable return to shareholders.

2.   Legal — to comply with the laws, i.e. submit financial reports on time, adhere to pollution regulation, comply with trade practices act dealing with fair pricing and purchase test banks.

3.   Ethical — to treat employees fairly

4.   Discretionary — to provide child care facilities for workers.

There would be a number of items that would have gone from the ethical grouping to the legal grouping, especially those issues relating to the environment. Issues such as pollution emission and effluent discharge may not have been regulated to the same extent 50 years ago. Child care facilities are one example that may go from discretionary to ethical over the next decade with pressure on companies to provide such facilities.

2.26     List some of the reasons given to explain why businesses act in a socially responsible manner.

·   purchase test banks.

·   Economically it makes sense as higher prices and more product sales will be the outcome (good marketing and public relations exercise).

·   Limit interference by government.

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