Güler Aras

Governance and Sustainability: An Investigation into the Relationship between Corporate Governance and Corporate Sustainability

– The purpose of this paper is to show that corporate governance is fundamental to the continuing operation of any corporation; hence much attention has been paid to the procedures of such governance. Similarly sustainability is fundamental to the continuing operation of any corporation, and is arguably the fashionable concept of the moment. While it is clear what is generally meant by corporate governance it is much less clear what is meant by sustainability and the paper starts by investigating this concept., – For two such fundamental concepts however it would seem that there should be a relationship between the two, although little work has been undertaken on exploring this relationship. The central part of this paper is therefore based upon an exploration of the relationship between governance and sustainability, by investigating the FTSE100 companies and their corporate governance policies., – This analysis found some strengths – and hence cause for optimism – and some weaknesses – and hence cause for concern. Areas where further work is needed are identified., – The paper has implications in enhancing the understanding of the necessary components of corporate governance, although it is necessarily limited by the size of the sample., – This paper increases the understanding of the relationship between corporate governance, sustainability and sustainable development.

Managing corporate performance: Investigating the relationship between corporate social responsibility and financial performance in emerging markets

Purpose - Corporate social responsibility is important and fundamental to the sustainable operations of corporations. Similarly financial performance is undoubtedly fundamental to the continuing operating of any corporation. This paper aims to investigate the relationship between corporate social responsibility and firm financial performance. Design/methodology/approach - The main part of this paper is based upon an exploration of the relationship between corporate social responsibility and financial performance in developing countries. The authors do this by investigating the Istanbul Stock Exchange (ISE) 100 index companies and their social responsibility policy and financial indicators. The relationship between CSR and financial performance is empirically examined between 2005 and 2007 with different approaches and measurement methods. The authors show that some causality is related to lagging between periods for financial performance and CSR. Based upon previous empirical studies, this study conducts the analysis based on the assumption that there may be a relationship between firm size, profitability, risk level and CSR. Findings - In doing this analysis the authors found a relationship between firm size and corporate social responsibility. However the authors were not able to find any significant relationship between corporate social responsibility and financial performance/profitability. Research limitations/implications - The paper has implications in enhancing the understanding of performance management through understanding the relationship between corporate social responsibility and financial performance particularly in a developing country, although it is necessarily limited by the size of the sample. Originality/value - This paper increases the understanding of the relationship between corporate social responsibility and financial performance. This research is also the first research that has examined Turkish companies.

The Durable Corporation: Strategies for Sustainable Development

Sustainability is normally considered to be about choices for the future being limited by decisions made in the present, and is frequently portrayed as concerning environmental issues alone. The Durable Corporation rejects both of these notions to argue that sustainability is a more complex concept that involves balancing many factors. Combining rigorous applied research with practical examples of best practice from around the world, the book explores the nature, value and role of sustainability in business and argues that resource utilization must be based upon the twin pillars of equity and efficiency rather than attempting to ensure that our choices in the future are not reduced. The authors of The Durable Corporation propose a new model of sustainability and a fresh approach to managing resources. These features make it essential reading for all those with responsibility for the sustainability or durability of the enterprises in which they are engaged or in the study of the issues at stake.

Making sustainable development sustainable

Purpose – Although all organisations claim to be engaged in sustainable development, research shows that they misunderstand what is involved. This paper aims to reconsider what is meant by sustainability and to show that the way accounting operates in an organisation actually prevents an organisation from recognising sustainable operations.Design/methodology/approach – The paper develops a theoretical argument that sustainability depends upon a redefinition of efficiency and shows the problems with the current descriptions of organisational activity.Findings – The paper shows that efficiency is not demonstrated through cost cutting but through recognising value‐creating activities, and that sustainability cannot be achieved without a consideration of the distribution of the effects of organisational activity.Research limitations/implications – The research shows a different model of sustainability which highlights key aspects that are not normally included; it thereby points the way towards further resear...

A Handbook of Corporate Governance and Social Responsibility

The current economic situation has highlighted deficiencies in corporate governance while also showing the importance of stakeholder relations. It has also raised the profile of the debates regarding corporate social responsibility and shown the inter-relationship with governance. And the two together are essential for sustainable business. The social and environmental contexts of business are generally considered to be as significant as the economic and financial contexts and good governance will address all of these aspects. The combination of these aspects offers long term benefits for a firm, such as reducing risk and attracting new investors, shareholders and more equity as well as sustainable performance. Written by experts from all over the world, The Gower Handbook of Corporate Governance and Social Responsibility is the most authoritative single-volume guide to the relationship between good governance and social responsibility and the reality of managing both. In addition to the theory and practice of governance and CSR, the book includes case studies from large and small organizations and NGOs to highlight examples of good and bad practice, and to show international and cultural similarities and differences while at the same time furthering the debate regarding the relationship between good governance and social responsibility. Contents: 39 chapters Part 1 Theoretical Overview Part 2 Applying Corporate Governance Part 3 Applying Corporate Social Responsibility Part 4 Dealing with Stakeholders Part 5 Experience in Practice: case studies Index

Developing sustainable reporting standards

Purpose - This paper aims to evaluate the development of reporting standards for both financial reporting and for corporate social responsibility (CSR) reporting. It aims to argue that both International Financial Reporting Standards and US Generally Accepted Accounting Principles are vehicles of colonial exploitation and cannot be sustainable. This can be contrasted with the voluntary approach to the development of CSR reporting standards. Design/methodology/approach - The methodological approach is dialectical, and is based upon diagnosis and concomitant prognosis. Findings - The findings take the form of an evaluation of progress so far in the harmonisation of financial reporting standards, the development of CSR reporting standards and the consequences are contrasted with the rhetorical justification. From this a prognosis is developed. Research limitations/implications - The implications are a projection into the future and therefore subject to limitations. Originality/value - This paper increases the understanding of the relationship between standards development and exploitation and the implications for the longer term.

What Level of Trust is Needed for Sustainability

Purpose - The purpose of this paper is to argue that the main ontological position of modern capitalism, founded on the philosophy of utilitarianism, derived of course from the work of Jeremy Bentham and John Stuart Mill, is fundamentally flawed as it ignores power inequalities and assumes that the economic fiction of perfect competition can actually exist. Design/methodology/approach - Nevertheless it provides a legitimating mechanism for modern capitalism and the operation of firms within a market economy. More significantly, from the viewpoint of this paper, is the problem caused by the naive assumption that the firm as nexus of treaties is sufficient to negotiate the contracts between the various stakeholders. This is significantly inadequate because it ignores the aspect of trust between the parties – the focus of the paper. Findings - In this paper it is argued that the sustainability of a firm is not predicated in the negotiated contracts it enacts but rather in the underlying trust which is implied and that one of the problems of the modern firm is that this trust has been negated in the drive for efficiency and shareholder value. The purpose of this paper therefore is to explore the nature of trust between the various stakeholders to the social contract which the firm enacts, paying particular attention to the involuntary stakeholders. In doing so, the role of trust in each aspect of sustainability identified in a previous paper is analysed and consider whether it is necessary for each stakeholder or just they key ones, or whether it is different for each aspect? In doing so, particular attention is paid to involuntary stakeholders. Originality/value - This argument has implications for every business in managing its stakeholder relations.

Sustainable Practice: The Real Triple Bottom Line

One of the children of Brundtland has been the concept of the triple bottom line – economic, environmental and social – as a means of planning for and measuring performance. This approach has largely been unquestioningly accepted. Despite this the agenda for socially responsible behaviour has evolved and developed. Now the concern is for the whole supply chain, which transcends the organisational boundary and throws a question over any idea of the triple bottom line. Corporate concern increasingly focuses upon two key issues, which are also of paramount importance to individuals: environmental degradation, particularly climate change, and human rights protection. In addition a lot of concern has been expressed as a result of revelations stemming from the economic and financial crisis, which have exposed significant failures in governance at corporate level and in markets and governments. Environmental degradation, human rights protection and governance operate at many levels from global to corporate. In many ways they parallel the idea of the triple bottom line but are not organisationally bounded. They represent issues of greater concern than merely corporate issues; they have an impact on the global and societal matters also. They are also totally connected to sustainable behaviour. In this chapter we therefore argue that this is the real triple bottom line, and discuss the implications.

Analysing social responsibility in financial companies

Although it is an accepted methodology to exclude financial companies from any comparative financial analysis of a sample of companies when performance is being analysed and this exclusion is due to the different financial structure of such organisation, it seems to have also become standard practice to exclude such companies when the analysis of corporate social disclosure is also being undertaken. The justification seems to have been merely transplanted without any firm rational ever being produced. This paper challenges this transfer of practice to show by theoretical and empirical analysis that the same assumptions do not hold and that all organisations are similar when the analysis of corporate social disclosure is also being undertaken.

The future of corporate governance: a prognosis.

Corporate governance is fundamental to the continuing operating of any corporation; hence much attention has been paid to the procedures of such governance. A significant part of the reason for this is due to the developments brought about through globalisation. The phenomenon known as globalisation is a multidimensional process involving economic, politic, social and cultural change. However the most important discussion about globalisation is related to the economic effect it has upon countries and the corporations operating within and across these countries. There has been much written about globalisation – either positive or negative – and the effects which it is having. One consequence of globalisation though is manifesting itself in the structure and organization of corporations. This is concerned with the harmonisation procedures and structures which will manifest itself through the emergence of global norms for corporate governance. We have seen through the preceding chapters a variety of issues concerned with corporate governance. Equally we have seen examples of the central message of this book concerning the overwhelming importance of cultural issues in the operation of whatever systems of governance are introduced. Nevertheless some form of commonality and harmonization continues to be a subject of debate. This chapter takes this debate and the arguments from the chapters in this book in order to consider what the future might hold for corporate governance procedures and mechanisms.