Corporate Social Responsibility & Ethical Standards Flashcards

Which concept describes the idea that corporations owe duties not just to shareholders but to all parties affected by their operations?

Answer: Stakeholder theory

Stakeholder theory, advanced by R. Edward Freeman, holds that firms must consider the interests of all stakeholders, not just investors.

The B Team Responsible Tax Principles primarily call on companies to:

Answer: Pay taxes in line with economic substance and disclose tax approaches transparently

The B Team principles urge companies to pay taxes where economic activity occurs and to be transparent about their tax strategies.

What is the primary purpose of a supplier code of conduct?

Answer: To communicate the company's minimum expectations for supplier labor, environmental, and ethical practices

A supplier code of conduct defines the non-negotiable baseline standards vendors must meet to work with the company.

In CSR, 'shared value' (as defined by Porter and Kramer) means:

Answer: Creating economic value in a way that also creates value for society

Porter and Kramer's shared value concept argues that companies can generate competitive advantage by addressing societal problems.

Which principle of the UN Global Compact specifically addresses anti-corruption?

Answer: Principle 10

Principle 10 of the UN Global Compact calls on businesses to work against corruption in all its forms, including extortion and bribery.

When a company's stated values conflict with employee behavior, this gap is often called:

Answer: Ethical drift

Ethical drift occurs when day-to-day employee actions gradually diverge from the organization's stated ethical principles.

The US Foreign Corrupt Practices Act (FCPA) prohibits American companies from:

Answer: Bribing foreign government officials to obtain business advantages

The FCPA makes it illegal for US persons and companies to bribe foreign officials to gain or retain business.