Sustainability and Corporate Governance

Question: Discuss the relationship between sustainability reporting and corporate social responsibility of a business organisation.Critically discuss the HR professions role in helping a business organisation to achieve its sustainability.Using agency theory, discuss the function of corporate governance.Identify and critically discuss corporate governance key issues. Answer: Indeed, sustainability reporting is the basic form of report which gives information about environmental, social, economic and governance performance. It is not only a report which collects the data, but also a method to improve an organization commitment to sustainable development. (Godelnik, 2012) Indeed, every development has some pollution so we need to adopt those development plan which related pollution digest the by human society that is known as sustainable development. Corporate social responsibility (CSR) is also known as corporate citizenship, sustainable responsible business and responsible business. CSR is the function of self-regulatory mechanism which monitor and ensures the business with its ethical standards, international laws and spirit of the law. (Zu, 2008) Further, the relations between the CSR and sustainability reporting are that they are progressively exposing the limits and weakness of conventional corporate disclosure and reporting. Reporting and corporate disclosure are based on financial than non-financial drivers for business success, heavily financial in focus and methodology, investor oriented and markets as its desired audience. Professor Villiers said that this approach provides exclusive rights for specific kinds of information, methodologies and audiences. CSR and sustainability reporting are accepting worldwide through their framework and measures approaches. The CSR and sustainability reporting is based on a multi stakeholder process. The CSR and sustainability reporting have common aim is to provide maximum growth and development in the business organization which helps to maintain its competition position in the worldwide. (Horrigan, 2010) From the above discussion it can be concluded that the CSR and sustainability reporting are connected with each other. Both play an important role in the business organization due to their concept and nature of works.Indeed, human resource (HR) is a part of organization that is focused on employees related activities. These activities include payroll, medical benefit, saving, retirement, hiring and recruiting of new employees and provide training among hired employees. (Heathfield, 2014) HR means providing manpower of the organization and encourages employees to work for organization goals. Further, new graduates student starting their career in the HR areas so today HR role is becoming very significant in the organization. The main HR role in the organization which helps to achieve sustainability that is following below: Strategic business planning: HR manager role in the organization is to ensure that employees are utilized to adjust with the organization goals. HR explains their vision of the organization and finding employees that will adjust themselves. So, those visions will permit you to increase your organization capacity. (TDP, 2013) Organization change facilitation: It is HR role that provides equipped information to your employee to get higher productivity from employees sides. Through facilitation, organization will grow and maintain its competition position in the worldwide. Employee advocacy: This is major role of HR manager is to provide secure working environment for their employees. HR manager should support their employees when they produce low productivity and try to get assurance of their employee then they should encourage them for higher productivity in the organization. (TDP, 2013) They should understand the reason behind the low productivity and try to reduce problem with their employees. From the above discussion, it can be concluded that clear role of HR helps it to maintain its competition position in the worldwide organization. HR managers play an important role due to manage high recruitment of the employee in the organization. Corporate governance Indeed, agent theory determines the relationship between two parties, where one is related to the principle of organization and second is an agent which represents the organization principle transaction with third party. In the other word, it is a way of studies that broker and client work together. Agent theory will support to determine the best incentives for both of parties in enhancing a successful transaction and reduce expenses those are related to broker and client. (Kessler, 2013) Further, corporate governance is term which refers how businesses are operated or controlled. They provide guidelines that how the organization or business can be controlled to fulfill its objectives or goals and it is also good for all stakeholder in the long term. (Thomson, 2009) Further, in the concern of agent theory, we would discuss the function of corporate governance that is following below: Goal and risk management: It is essential function of corporate governance which sets policies and procedures to effectively achieve investment goals. The organization goals can be achieved through entire efforts of the organization stakeholder and agent theory helps to maintain relationship between stakeholders. (Kessler, 2013) Corporate accountability: The main function of the corporate governance is to ensure accountability within the board of directors and the organization management structure. It provides a system of check and balances to make specific organization procedures. The agent theory is related to corporate accountability because it represents organization principle or accountability transaction with third party. (Bonazzi, Islam, 2007) Shareholder meeting: Corporate governance should conduct shareholder meeting within a week or monthly basis which helps to discuss on business growth and development issues. Agent theory also determines that how maintain good relation to develop the organization business. Government regulation: Corporate governance is to ensure transparency in relation to government regulation. These rules include regular financial reporting, safe environmental practices, and ethical treatment of worker and handling of hazardous material. (Kessler, 2013) From the above discussion, it can be concluded that the agency theory as it is often used in the corporate governance literature. Corporate governance and agent theory are connected with each other in the organization perspective. Indeed, corporate governance is a process that objective to allocate corporate resource in the concern of maximizes the stakeholder values. They provide guidelines that how the organization or business can be controlled to fulfill its objectives or goals. (Kessler, 2013) Further, we would discuss the key issues in the corporate governance that are following below: Role of board: This is the main issue in the corporate governance that board members are unable to fulfill their responsibilities and duties. These includes the use their power for a specific objective, avoid conflicts of interest and fiduciary responsibilities. (Bonazzi, Islam, 2007) Quality of financial reporting: Qualities of financial report is main issue of corporate governance. Auditing: This is major issue in the corporate governance because auditing plays an important role in the every organization and if auditing part would be not proper then it can harm the organization growth and success. (Bonazzi, Islam, 2007) Director remuneration: Due to imbalance distribution of directors remuneration it is becoming main issues in the corporate governance. Corporate governance should create the roadmap for directors remuneration on the basis of their qualification and experience. Risk management: It is another important issue in the corporate governance that how to manage risk potential in the organization. Risk is the part of organization because without risk taking factor we cant run business. (Thomson, 2009) Corporate social responsibility: It is an important issue with corporate governance that how to maintain corporate social responsibility because the organizations have profit oriented goals and objective so if they spend time, money and energy then how they will get money. (Bonazzi, Islam, 2007) From the above discussion, it can be concluded that corporate governance has lot of issues which affected the organization growth and development. However, they have not solved the key corporate governance issue regarding the relationship between controlling shareholder and minority shareholder, but overall awareness of the significant of corporate governance issue has increased among directors, investors and managers. References Bonazzi, L., Islam, S., M., (2007). Agency theory and corporate governance: A study of the effectiveness of board in their monitoring of the CEO. Journal of modelling in management, 2(1), 7-23. Godelnik, R., (2012). What Is Sustainability Reporting? 8 Tips For The Casual Reader. Horrigan, B., (2010). Corporate Social Responsibility in the 21st Century: Debates, Models and Practices Across Government, Law and Business. USA: Edward Elgar Publishing Inc. Heathfield, S., M., (2014). What Is A Human Resource. Kessler, E., H., (2013). Encyclopedia of Management Theory. USA: SAGE Publications. TDP, (2013). The Evolving Role Of HR In Organizations. Thomson, L., M., (2009). What Is Corporate Governance? RZu, L., (2008). Corporate Social Responsibility, Corporate Restructuring and Firm's Performance: Empirical Evidence from Chinese Enterprises, USA: Springer Science Business Media.