1.

Company background
Starbucks is a coffee company based in Washington, United States of America. The
company was formed in 1971 in Seattle, Washington.

Starbucks Company has grown immensely since its inception. It has grown to become
the largest coffee company in the world. The company has more than 20,366 stores in
61 countries.

2. Corporate governance
Starbucks has had a lot of things that have helped to shape them into the company that
they are today. Starbucks cares about their customer’s satisfaction and the community
around them, which is demonstrated by their mission statement and their corporate
governance policies, which are as follows: Our mission: to inspire and nurture the
human spirit – one person, one cup, and one neighborhood at a time. The
corporate social responsibility is “At Starbucks, our commitment to good
governance, ethical conduct and social responsibility is core to our way of doing
business, and strongly aligned with our drive to create and increase shareholder
value. We are also committed to maintaining our relationships with stakeholders
and gaining their input and feedback on issues of mutual
importance”[ CITATION Cus07 \l 1033 ]. Their statement has shown that they ensure
adherence to strategic objectives and fulfill responsibilities to all stakeholders.

Starbucks Corporation has stated that they are committed to maintaining their
uncompromising principles. In this regard, their Board of Directors has adopted
governance principles and committee charters to lead Starbucks governance practices.
Currently, their board has 11 directors, a substantial majority of whom meet all of
the independence requirements of NASDAQ® and the U.S. Securities and
Exchange Commission. There are clear guidelines on how a selection of new
directors is done. It is usually done on the basis of personal integrity and ethics. Some
of the basic guidelines include professional backgrounds, gender, members’
personality, race, ethnicity and other standing out characteristics. In 2007, the board of
directors’ amended company’s bylaw to allow shareholders to actively participate in
the election of the directors, they are elected on the basis of majority votes. [CITATION
Sis12 \l 1033 ]. A well-defined structure of corporate governance that shows their
focus on maintaining the independence, minimise risk, promote integrity.

There is a program whereby the shareholders and partners actively participate in the
running process of the company. They provide their views and suggestions. Written
correspondence can also be sent to the directors or the independent board committees
of Starbucks. On the website Starbucks.com there is detailed information on the
committee charters, the directors’ nomination policy, and the governance principles.
These crafts direct information about the company because one can access it from any
part of the world. We can see that they have followed the principles of establishing
clear accountability, encouraging more proactive involvement.

Business ethics has come to the forefront of business concerns today, especially the
ethical practice of becoming a more sustainable company. In the news lately,
Starbucks has announced their first sustainability bond. There are many benefits to
becoming more sustainable as a company that benefits all stakeholders, in turn
creating a successful business according to Freeman’s Stakeholder Theory.
Starbucks, as an example, is satisfying all their stakeholders, by creating a
common interest and value return with their new sustainability bond, while
doing what is ethical.[CITATION Mon13 \l 1033 ]. By doing so, they emphasize their
responsibilities to all stakeholders and strive to minimize potential conflicts of
interest.

The former CEO, Howard Shultz, benefits tremendously from this bond. He
increases profit through the cost savings associated with more sustainable options,
possible tax incentives from the government, increased demand from mindful
customers, and increased longevity of resources. He creates more motivated
workplaces, increasing employee dedication and good publicity for the company.

The Starbucks’ employees become more motivated by working for a greater cause
and enjoying what they do, knowing they are helping the environment. They also can
become hopeful that with future profit increases there is a potential salary increase, or
job opportunities in the sustainability sector.

Loyal Starbucks customers feel satisfied knowing that what they’re buying is aiding
the sustainability efforts. Also, many new customers in this ever-changing and
growing world will come to Starbucks with the desire to be more ethically aware of
what they purchase and how it affects the world as a whole.

The communities around the world, not only ones with a local Starbucks, but the
ones the coffee beans are being sourced from, feel as though they are being heard and
taken into consideration with these corporate decisions.

For the financiers, they are overjoyed by the words, cost savings and profit increase.
The possible cost savings from taking more sustainable routes throughout all stages of
the company is something all financiers want to hear. They are also greatly impressed
by increased profit and value returned to them through the increased customer
demand, the longevity added to the company through sustaining resources and the
possible tax incentives attached to choosing certain sustainable options.

The suppliers, especially at Starbucks with the new sustainability bond, feel
appreciated by the company’s efforts to not only educate them, but to start a more
sustainable farming method. They feel safe in their jobs knowing they and their new
knowledge are now assets to the company. They also feel they will have many more
years to work with new sustainable farming ways.
Freeman’s theory states the way to a successful business is to keep every stakeholder
happy and find where all their interests intersect, while still doing what is ethically
correct. Starbucks did just that when announcing their new sustainability bond.
[ CITATION Mon13 \l 1033 ].

References
Alam, M., 2013. Starbucks corporate governance. [Online]
Available at:
https://www.academia.edu/34125503/STARBUCK_CORPORATE_GOVERNANCE
[Accessed 19 8 2021].
Customer Relations, 2007. My Starbucks. s.l.: Starbucks Corportation.
Sisco, E., 2012. Corporate Governance Paper for Starbucks. [Online]
Available at: https://www.grin.com/document/279820
[Accessed 19 8 2021].