Lance Moir

What do we mean by corporate social responsibility

There have long been conflicting expectations of the nature of companies’ responsibilities to society. However, for those businesses that do undertake what might be termed “corporate social responsibility”, what is actually socially responsible behaviour as opposed to management of corporate image management or other activity aimed predominantly at business benefits? This article reviews definitions of corporate social responsibility from both practice and the literature and looks at theories to explain why such behaviour takes place. The literature has strong divides between normative or ethical actions and instrumental activities. The article concludes by posing the question of when instrumental activities become business activities rather than largely social responsibility.

Developing a conceptual framework to identify corporate innovations through engagement with non‐profit stakeholders

Purpose – The pressure on companies to position themselves as responsible corporate citizens has been identified as a key driver of the increase in collaborative relationships between corporations and non-profit organizations, with innovation and learning recognized as benefits to the firms from such relationships. This paper attempts to identify factors that can foster (or impede) the identification and development of firm-related innovations that result from engagement with non-profit stakeholders. Design/methodology/approach – The paper reviews literature within the stakeholder, cross-sector collaboration, and innovation genres, to examine business-non-profit relations specifically in the context of innovation generation. Findings – The outcome of the literature review is a conceptual process model of cross-sector-collaboration. This identifies firm motivations, engagement conditions and intra-firm factors that would appear to influence innovation outcome, and which would benefit from empirical exploration. Originality/value – The paper begins to develop a framework for considering business-non-profit relations in the context of innovation generation and aims to further one’s understanding of factors in the engagement process that can influence an innovative outcome.

Determinants of financial covenants and pricing of debt in private debt contracts: the UK evidence

Abstract This paper presents details of financial covenants given by a sample drawn from the largest 200 non-financial quoted firms in the UK in private debt contracts and analyses these data to see whether there are relationships between the nature of the covenants given and firm characteristics. Data were obtained from 72 firms, of which 17 gave no financial covenants. Firm size was found to be the only significant factor influencing whether firms did or did not give covenants as well as the only factor which influenced the margin given on debt. Some types of covenants given were found to be different from those found in previous research. In particular, there is greater use of EBITDA as a base for both interest cover and gearing covenants. This shows the importance of cash flow based lending as opposed to asset based lending for general financing for large firms.

Developing the wider role of business in society: the experience of Microsoft in developing training and supporting employability

Purpose – The purpose of this paper is to describe Microsofts activities in encouraging employability and to show how these activities provide strategic advantageDesign/methodology/approach – Two of Microsofts corporate responsibility initiatives linked to the development of employment in Europe are described and it is shown how these activities have created sustainable competitive advantage for Microsoft through an analysis of industrial organisation economics and the resource‐based view of the firm. Reflects on the characteristics of these involvements and points to aspects which may have wider applicability.Findings – Involvement in societal projects can contribute intangible assets to the firm whilst delivering social value. However these projects are part of wider coordinated activities with other organisations and with government.Research limitations – These are reflections on participation in business and hence the conclusions are not representative and the analysis is unstructured.Practical impl...

Measuring the business case: linking stakeholder and shareholder value

Purpose – The purpose of this article is to provide a detailed review of how to design and test a framework for assessing the impact of corporate responsibility on firm value. Design/methodology/approach – Building on an earlier conceptual framework, this paper describes the testing of the framework on three cases within EDF over a period of some six months. The results of the workshops on the cases are then taken to show how to build on the earlier conceptual framework. Findings – Much of the difficulty of trading off corporate responsibility with financial performance is due to a lack of detailed understanding of how corporate responsibility issues can affect drivers of value. The framework was validated but to be effective it requires detailed understanding of both corporate responsibility and financial management. Research limitations/implications – The cases were undertaken within one company and so the results need to be tested in other contexts. Equally the model is too complex at this stage to be rolled out across the group. Practical implications – Nevertheless the framework is designed to be used in business and indeed EDF have taken the results into their processes. Originality/value – The paper sets out a detailed approach to linking corporate responsibility and business value in a practical way. The issue now is for businesses to find ways to apply the framework.

Derivatives reporting in the UK: A treasury perspective on the introduction of FRS 13

The past twenty years have seen a significant increase in the use of derivative financial instruments by companies throughout the world (Berkman and Bradbury 1996; Berkman, Bradbury and Magan, 1997a; Berkman, Bradbury, Hancock and Innes, 1997b; Bodnar, Hayt, Marston and Smithson, 1995; Bodnar, Hayt and Marston, 1996; 1998; Collier and Davis, 1985). This paper examines the impact of Financial Reporting Standard 13: Derivatives and Other Financial Instruments, Implementation and Disclosures, on treasury department activities. In particular, the researchers conducted interviews with UK treasury department staff to assess their general attitudes to, and the perceived impact of, FRS 13. In general, the treasurers responded favourably to the standard, and considered the narrative disclosures to be particularly useful. The numerical disclosures were considered to be very detailed and specialised; interviewees thought that users might have difficulty in understanding them. However, the implementation of IAS 39, that becomes mandatory for all EC countries from 2005, was causing treasurers far more concern.

Can the MBA Develop Leadership?: ‘Academic Reflection’ vs ‘Practical Training’

This chapter examines whether the MBA can truly develop leadership. This question crystallises some of the current critiques of the MBA; practical critiques on the one hand about the relevance of the MBA — does it actually prepare students for real management roles? — and, on the other, critiques of the MBA’s academic rigour — for instance is it ‘critical’ enough of contemporary management practice?

What to Measure in the Twenty-first Century?

One of the main governance issues that boards have to face is what to measure and, in particular, how to set appropriate performance goals for operating managers. If governance is about the ‘the relationship among various participants in determining the direction and performance of corporations’ (Monks and Minow, 2004), then we need to address who the participants are, how to choose a direction and what constitutes performance. It is precisely this inter-relationship which causes the problem. For many managers the achievement of a single objective — maximisation of shareholder wealth — to a single actor, the shareholder provided enough complexity. Indeed many (e.g. Jensen, 2001) argue that this is all it should be. However, there are other participants — customers, employees, governments who also make claims on the firm and its resources and who also seek ‘performance’. In a traditional shareholder value model, the key decision tool would be based around net present value and ultimate measures of ‘value’. This focus has led boards to think about financial measures such as earnings per share and share price growth. Yet recent financial scandals reflect unethical behaviours whilst societal pressures have also led to risks which can impact on firm value. In a more complex setting, the interplay between firm value and societal value changes the traditional approach. For the senior management of a firm the problem then is how to determine performance in such as way as to satisfy these multiple stakeholders (Freeman, 1984) whilst still meeting the economic objectives.