21874 Corporate Governance and Sustainability

Subject level: Postgraduate

Handbook description

This subject examines corporate governance systems by which business corporations are directed and controlled, and how these may contribute to sustainable enterprise. Issues considered include the implications of the separation of ownership and control, contrasting institutional systems of governance, competing theoretical explanations, the mechanisms of governance, the increasing significance of capital markets and the internationalisation of finance and regulation. The subject employs a stakeholder management perspective to analyse organisational strategies, values and operations that facilitate the development of sustainable, high-performing organisations, as well as enabling a balance between enterprise, society and the ecosphere. The subject focuses on how organisations develop a 'licence to operate and grow' through their relations with employees, wider society and the natural environment, developing skills in critical analysis, risk evaluation and management, scenario planning and stakeholder dialogue.

Subject objectives/outcomes

On successful completion of this subject students should be able to:

1. Appreciate the distinctive influences of different internal governance mechanisms, and external institutional structures, upon business strategy and performance.
2. Understand the significance of market-based and relationship-based governance systems, and the strategic impact of the globalization of corporate finance and governance.
3. Evaluate, develop and implement strategies to develop ethical engagement and build cooperation with corporate stakeholders, and recognise the demand for accountability and transparency.
4. Analyse the key elements of social and environmental sustainability, and contribute to the debate on the relationship between environmental and social risk and corporate performance.
5. Apply key concepts and techniques of voluntary reporting, management and certification systems that could progress organisations towards social and environmental sustainability.
6. Design management strategies which enable organisations to integrate business opportunity with sustainability values.

Contribution to graduate profile

The subject provides a deeper understanding of the contrasting ways companies are owned and controlled, of the role of competing systems of corporate governance which exist in different institutional environments, and how sustainable these different business approaches are. The subject will contribute to the objectives of the course by integrating the governance, investment, strategic and control elements of business decision making. The subject examines how distinct corporate values and objectives, aligned to competing systems of corporate governance, can produce diverse strategies and results in various product markets. The subject contributes to a better understanding of the complexity of internal business behaviour and control, and the impact of the capital market environment, and how this may contribute to sustainable enterprise. The subject examines how an understanding of stakeholder relationships for sustainability is fundamental to the development of lasting, high-performance organisations in the rapidly changing business, ecological and social environment. The subject develops students' ability to critically assess their existing frames of reference when it comes to analysing organisational sustainability. It aims to develop the necessary skills in stakeholder dialogue and management for participants to work in an innovative fashion towards making organisations more sustainable, while sustaining the natural environment and society.

Teaching and learning strategies

The subject will normally be delivered with lectures and group discussions, with frequent use of cases of companies confronted by corporate governance crises, sustainability issues or other moral dilemmas. Classes will involve a combination of lectures, video analysis, role-plays, case studies, scenario modelling, stakeholder dialogue and simulation exercises. Use will be made of guest speakers including regulators, lawyers, investors, company executives and consultants. Resources will be employed to give more direct insights into business practice including film and video, company materials, and web resources including the governance web sites of corporations, and sustainability agency web sites. Students will be encouraged to develop forensic skills in the analysis of cases of corporate failure, the investigation of sustainability issues, and the analysis of corporate moral dilemmas, and will be encouraged to acquire knowledge and skills of how to develop higher standards of corporate disclosure, stakeholder engagement, and sustainability strategies. The UTS web-based communication tool (UTS-Online) will be used to share information and encourage interaction between staff and students.

Content

• Strengths and weaknesses of market-based and relationship-based governance systems, and how they are related to different business objectives, strategies and performance outcomes
• The mechanisms of governance including the role of the board, executive compensation, and the influence of stock options
• The increasing significance of capital markets, including stock exchanges, institutional investors and private equity, in merger and takeover activity
• The internationalisation of finance, governance and regulation
• Instrumental and normative perspectives on corporate social responsibility and sustainability
• The simultaneous and often competing drives to enhance corporate performance, accountability and sustainability
• Evaluating and managing risk, and the relationships between human and ecological organisational sustainability
• Efficiency and sustainability: the triple and quadruple bottom line
• Strategic sustainability, organisational identity and image
• Stakeholder relations, reflexivity and adaptive management
• Organisational change and leadership for sustainability

Assessment

Recommended text(s)

Clarke,T. (2007) International Corporate Governance: A Comparative Approach, London and New York.: Routledge

Benn, S. and Dunphy, D. (2007) Corporate Governance and Sustainability, London and New York : Routledge

Dunphy, D. Griffiths, A. and Benn, S., (2007) Organisational Change for Corporate Sustainability, London and New York.: Routledge, Second Edition

Indicative references

Carbon Disclosure Project, http://cdproject.net accessed 12 July 2007

Carter, C.B. and Lorsch, J.W. (2004) Back to the Drawing Board: Designing Corporate Boards for a Complex World, Harvard Business School Publishing

Clarke, T. (2004) Theories of Corporate Governance: The Philosophical Foundations, London and New York.: Routledge

Doppelt, B. (2003) Leading Change Toward Sustainability: A Change-Management Guide for Business, Government and Civil Society, Sheffield UK: Greenleaf Publishing

Elkington, J. (1998) Cannibals with Forks, London: Capstone

Figge, F., Hahn, T., Schaltegger, S. and Wagner, M. (2002) The Sustainability Scorecard – Linking Sustainability Management to Business Strategy, Business Strategy and the Environment, Vol 11, Issue 5, pp. 269-284

Gourevitch, P.A. and Shinn, J. (2005) Political Power and Corporate Control: The New Global Politics of Corporate Governance, Princeton University Press

Grayson, D. and Hodges, A. (2004) Corporate Social Opportunity: Seven Steps to Make Corporate Social Responsibility Work for Business, London: Greenleaf Publications

Hawken, P., Lovins, A. and Lovins, H. (1999) Natural Capitalism: Creating the Next Industrial Revolution, London: Earthscan.

Hall, P. and Soskice, D. (2001) Varieties of Capitalism: The Institutional Foundations of Comparative Advantage, Oxford University Press

Holliday, F., Schmidheiny, S. and Watts (2002) Walking the Talk: The Business Case for Sustainable Development, Greenleaf Publishing.

Smith, R.C. and Walter, I. (2006) Governing the Modern Corporation: Capital Markets, Corporate Control, and Economic Performance, Oxford University Press

Vogel, D. (2005) The Market for Virtue: The Potential and Limits of Corporate Social Responsibility, Washington: Brookings Institution

Waddock, S. and Bodwell, C. (2007) Total Responsibility Management, Sheffield: Greenleaf Publishing