Social Responsibility

Framework
Team 7
Allada, Charles
Uson, Gran Ezra
Rodriguez, Royce
Louis Eguita
What is a Corporation for you ?
 Corporation
• A legal entity created by an individual or group of shareholders who have
ownership of the corporation (through shares of stocks issued by the corporation)
to engage in business activities.

• Their ownership of the corporation is generally represented by their holding of

common stock (one share-one vote). Certain types of shares can have more voting
rights or dividend priority, as expressed in the company bylaws. Not all corporations
though are formed with the objective of profit-making, such as charitable
institutions, nonprofits, or nongovernmental organizations (NGOs). But the
majority of corporations are formed to provide a return for their shareholders.
• Transferability allows a shareholder to sell his shares of stocks in the
stock market freely should he/she decide to let go a part or all of his
shares unless explicitly stated in the corporate bylaws.
• Corporations are legal entities and are sometimes defined as "legal
persons." Corporations are allowed to perform functions that
humans make, such as buying and selling properties, owning
copyrights, patents, trademarks, and engaging in any other business
activities.
• corporations have the benefit of centralized management. The
company's daily management and governance are under the
jurisdiction of executive managers and the board of directors.
 The Philippine Corporation

• According to the 2019 Revised Corporation Code (RCC), there is no minimum number
of incorporators (directors) but shall not have more than 20, and each of the
incorporators (directors) must own at least one share of stock. Today, a corporation is
granted a perpetual corporate term (in line of the previous 50-year term). There is also
the removal of the required subscribed/paid-up capital, and residency of incorporators
was made to keep up with global standards. The most significant change done was the
introduction of the One Person Corporation (OPC).
• The RCC focuses on four areas of reforms: enhancement of ease of doing business in
the Philippines; fortified stockholder protection and institutionalized corporate
governance provisions; emphasis on corporate social responsibility; and improved
policies and regulatory corporate framework.
 Importance of Social Responsibility and Good
Governance

• The way a corporation conducts its business has profound effects on individuals
in the societies they operate. Corporations have continued to grow and can
sometimes influence government policy through political lobbying
 Corporate Social Responsibility

• Corporate social responsibility (CSR) is a manifestation of good corporate

governance.
• CSR is the responsibility of companies to act and behave ethically to satisfy their
various stakeholders' needs.
• It is an ongoing commitment of organizations to ensure accountability to the
stakeholders their existence impacts.
 Four dimensions that characterized
companies’ responsibility within society
(Carroll’s Framework)
• Economic - companies must first be profitable after they have paid their obligations to
employees and suppliers, and conform to consumers' needs and demands. This is the very
foundation and required of all corporations.
• Legal - A corporation is created through law and, as such, must abide by the rules and
regulations imposed for fairness and justice. Much like economic responsibilities, it is required
for companies to be legally compliant as well.
• Ethical - Doing what is right for stakeholders is what ethical companies should aim for. Society
expects companies to take on this responsibility beyond what is required of them legally.
• Philanthropic - To fulfill this responsibility, companies need to truly embrace philanthropy,
meaning, issues that pertain to the improvement of human lives must be addressed without
compromise. This responsibility, however, is not required nor expected but rather desired by
companies.
 A Brief History of CSR
• CSR was officially introduced in the early 1950s through American economist
and educator Howard Bowen's (1953) seminal work on social responsibility
• In the Philippines, CSR started as donations from various businesses in the
1960s. CSR flourished in the 1990s as companies acknowledge their role as social
catalysts. And from the 2000s onward, CSR has become an essential part of a
company's identity. Top companies started to approach CSR as an integrative
strategic management tool. CSR now is a universally accepted norm of good
corporate governance.
 DRIVERS AND BARRIERS OF CSR
Drivers:
Regulation - Regulation and law provide a framework that companies must comply with. For
instance, in China, CSR is no longer a voluntary act but is mandated by the central
government
Market behavior - Benchmarks have been established because of companies' best practices
that use CSR as a builder of reputation; how the market behaves and influences; and how
companies engage in their respective CSR initiatives and have become a source of
competitive advantage.
Social activism - How stakeholders in society react and voice out their concerns to
corporations publicly through various means (such as social media, demonstrations, lawsuits,
and the like) have impacted how organizations behave. Social activism can either be internally
or externally driven, meaning companies do not necessarily have to respond to public clamor
but can internally drive change from within the organization.
Drivers:

Culture - Culture is a mixture of beliefs, norms, symbols, and the heritage that a
particular country or geographic area shares and practices. This is built over time and
becomes part of its normative values. For CSR and good governance to thrive, a
culture of benevolence and philanthropy must be ingrained or deeply embedded in an
organization.
Strategy – Is perhaps the most significant driver of CSR. Integrating CSR in its
planning from the different functional areas of a company fortifies the relationship and
becomes a creator of value that benefits the corporation in the long term. It is also
important that the focus and objectives of a company's desired CSR initiatives must be
clearly articulated to its internal (management) and external partners
Barriers:

Limited financial resources - a company needs to be profitable and take care

of its own needs before it has the ability and resources to engage effectively in
social responsibility. CSR requires a long-term stance in its commitment of
resources to truly see the benefits of its initiatives.

Profit maximization - A company that single-mindedly focuses on operational

efficiency is usually driven by profit maximization.

Availability of human resources- No matter how good the intentions are in

promoting CSR in organizations, it will need efficient mobilization through
employee involvement and engagement in its programs. Without the support of
human resources in its implementation, CSR activities will be lackluster.
Measuring CSR

• The purpose of measurement is to understand what is being measured better and lay the
groundwork for improvement. CSR is a management concept that is not easy to measure.
Unlike other functional areas where tangible measurements have been developed for quite
some time, market share, customer satisfaction, attrition rate, turnaround time, financial ratios,
goodwill, loyalty, and social/environmental impact are just some CSR concepts that cannot be
accurately measured. But all these intangibles can be translated into measurable variables that
can provide indications of relationships and outcomes.
• Measuring CSR provides several benefits, such as helping organizations make better decisions
on allocating resources with the greatest impact, improving processes that will make CSR
initiatives more efficient, and providing more support for the business case.
 Triple Bottom Line (the three Ps:
people, planet, and profit)
• is an accounting framework that describes three evaluation perspectives that
contribute to creating greater value for the organization. The increasing pressure
from the government and society to manage and assess the results of their
operations gave way to scrutinizing companies from their economic (profit),
social (people), and environmental (planet) impact
 Leadership

• Leadership has a key role in influencing CSR. Both CSR and leadership are founded
on concepts of service, integrity, and inspiration to others. The relationship between
them is mutually empowering and transforming
• Leader perceptions provide evidence regarding their CSR attitude and acts of the
leaders can trickle down to affect employees' subsequent attitude, behavior, and
actual engagement through volunteerism.
• A leader must also be able to communicate their CSR stories internally and
externally effectively. These stories through internal memos, press releases, social
media, and others contribute to companies' reputation. Usually, large companies
have a corporate communications group to assist the leadership in their CSR efforts.
It is therefore critical that whatever accomplishments have been made by their
initiatives and programs, have to be made known to the various stakeholders for
CSR to thrive and progress even further in the long term.
 Future of Philippine CSR
• The future of CSR in the Philippines is promising and continually evolving.
The main driver of this evolution is awareness of the individual that his/her
contribution to society is ever-increasingly important. As the environment
deteriorates because of geopolitics and differing expert opinions, certain
individuals such as Greta Thunberg can bring CSR issues to the forefront.
Top Philippine corporations, such as Ayala Land, BDO Unibank, Coca Cola
Philippines, Globe Telecoms, and many others are leading the way in setting
examples on how to embed CSR in their corporate strategies.