An analysis of business sustainability, its key drivers, principles and impact on corporate reporting
Subject: Accounting for managers.
Task Overview
The “traditional” view of a firm’s performance suggests that increasing shareholder value should be the prime operational objective. However, Epstein and Roy (2003), as cited by Birt et al (5e), (Table 2.1, page 43) suggest “9 principles of business sustainability performance” intended to provide a sustainability focus.
Your initial task in this essay is to rank these nine principles, from your own viewpoint, in order of importance. Then, focusing on the top three and the final in your list, discuss:
– why they are positioned and ranked in this way (please note the lecturer has recommended ‘Ethics’ is to be chosen as the first principle from the list)
– the key drivers of each
– the impact (qualitative and quantitative) upon the firm resulting from compliance or rejection of these principles
– the role played by financial reporting in their application
– how they may complement or clash with the “traditional” view of business performance
The Nine Principles of Sustainability Performance
Ethics: The company establishes, promotes, monitors, and maintains
ethical standards and practices in dealing with all the company
stakeholders
Governance:The company manages all of its resources conscientiously and
effectively, recognizing the fiduciary duty of corporate boards
and manages to focus on the interests of all company
stakeholders
Transparency:The company provides timely disclosure of information about
its products, services and activities, thus permitting
stakeholders to make informed decision.
Business Relationship:The company engages in fair-trading practices with suppliers,
distributors and partners
Financial return:The company compensates providers of capital with a
competitive return on investment and the protection of company assets
Community involvement/economic development:The company fosters a mutually beneficial relationship
between the corporation and community in which it is sensitive to the culture, context, and needs of the community
Value of products and services:The company respects the needs, desires, and rights of its
customers and strives to provide the highest level of product and service values
Employment practices: The company engages in human-resource management
practices and promote personal and professional employee development, diversity, and empowerment
Protection of the environment: The company strives to protect and restore the environment
and promote sustainable development with products, processes, services and other activities.
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