The Gulf Oil Spill SOURCE: NOAA, 2010 5 | CORPORATE INTEGRITY The good company THEME BRIEF The Moral Issue Public trust in business is at an all-time low. A recent task force organized by the Business Roundtable investigated the issue of public trust in business, concluding that trust is earned through an unwavering commitment to integrity. In exploring the concept of corporate integrity, transparency and shared value emerged as key factors in trust. Companies create sustainable value through stakeholder networks. If consumers, suppliers, employees, investors, and the public do not believe that a company is delivering on a value proposition for them, their trust in the company is diminished. A business strategy of offloading costs to unsuspecting stakeholders is no longer effective or even profitable in the long run. To earn trust, companies must demonstrate value integrity; managing competing stakeholder claims adeptly to account fully for stakeholder claims and contributions to value. Learning Goal: To build accountable, ethical business cultures of shared value creation. Knowledge/Skills: To understand, explain, and fully account for stakeholder roles and claims in value creation. Evidence of Learning: Class performance; Mini-Project; Final Case Brief (due Week 8) Mini-Project: The Company Report Card Required Reading Porter and Kramer. ‘Creating Shared Value” Harvard Business Review, January-February, 2011. Post, Preston, & Sachs. Redefining the Corporation: Stakeholder Management and Organizational Wealth, 2002. Ch 1 (2, and 4 if you are ambitious) Stout, Lynn. “The Shareholder Value Myth.” European Financial Review, April-May 2013. Public trust in business, Suggested Resources McKinsey, “,” July 2011 Fortune Global 500 “” Socially responsible investing: ; Forum for Sustainable/Responsible Investment
The Gulf Oil Spill SOURCE: NOAA, 2010 5 | CORPORATE INTEGRITY The good company THEME BRIEF The Moral Issue Public trust in business is at an all-time low. A recent task force organized by the Business Roundtable investigated the issue of public trust in business, concluding that trust is earned through an unwavering commitment to integrity. In exploring the concept of corporate integrity, transparency and shared value emerged as key factors in trust. Companies create sustainable value through stakeholder networks. If consumers, suppliers, employees, investors, and the public do not believe that a company is delivering on a value proposition for them, their trust in the company is diminished. A business strategy of offloading costs to unsuspecting stakeholders is no longer effective or even profitable in the long run. To earn trust, companies must demonstrate value integrity; managing competing stakeholder claims adeptly to account fully for stakeholder claims and contributions to value. Learning Goal: To build accountable, ethical business cultures of shared value creation. Knowledge/Skills: To understand, explain, and fully account for stakeholder roles and claims in value creation. Evidence of Learning: Class performance; Mini-Project; Final Case Brief (due Week 8) Mini-Project: The Company Report Card Required Reading Porter and Kramer. ‘Creating Shared Value” Harvard Business Review, January-February, 2011. Post, Preston, & Sachs. Redefining the Corporation: Stakeholder Management and Organizational Wealth, 2002. Ch 1 (2, and 4 if you are ambitious) Stout, Lynn. “The Shareholder Value Myth.” European Financial Review, April-May 2013. Public trust in business, Suggested Resources McKinsey, “,” July 2011 Fortune Global 500 “” Socially responsible investing: ; Forum for Sustainable/Responsible Investment
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