The notes seen attached, provide an in depth summary of the CSR/CSI, Corporate Governance and the King Code section of the Business Studies syllabus required by the IEB.
These notes have been used to successfully complete the NSC final examinations, confidently and with ease.
CSR/CSI and Corporate Governance/King
Code
Social Responsibility
Corporate Social Responsibility
This is the moral obligation of a business to promote and protect the welfare of all
stakeholders.
Corporate Social investment
This is the actual resources that are invested in these stakeholders. Management has
argued that as long as they create wealth for its shareholders they have acted in a
responsible manner.
Sustainability
This is a CSI/CSR initiative that is able to sustain the community for a long period of
time. Eg, setting up a vegetable garden and teaching the people of the community how
to look after the garden thus it is sustainable as it can be continued once the business
pulls away.
Implication of CSR
1. Positive impact (for business)
➔ Can promote the image of the business.
➔ Can create a competitive advantage due to an improved reputation.
➔ May attract new investors.
➔ A higher rating on the JSE.
➔ May retain good employees.
2. Negative impact (for business)
➔ CSR can distract the business from their core functions.
➔ It can be difficult to identify exactly what the community needs.
➔ Business uses profits which may result in an increase in prices for
customers.
➔ Shareholders may be upset as their dividends are less as profits are being
used for the CSR program.
3. Positive impact (for community)
➔ Better educational facilities are established in poorer communities.
➔ Quality of life has improved.
➔ Can supply the business in the long term.
, 4. Negative impact (for business)
➔ CSR may discourage locals from taking their own initiatives and making
them dependent on the programs.
➔ Programmes may not satisfy the needs of the community.
➔ Sustained projects are difficult to continue without the right expertise
CSR in South Africa
The need for CSR
➔ The inequalities of the past especially in education have resulted in a large
number of non skilled workers.
➔ Break the cycle of poverty.
➔ Apartheid=unequal circumstances.
➔ The crippling effect of the HIV/AIDS epidemic.
➔ Limited water supplies.
➔ Technological advancements have resulted in limited job opportunities.
➔ The “global village” phenomenon – when importing products becomes cheaper
than producing them at home, many jobs get lost.
➔ The effects of the COVID-19 pandemic and lockdown.
➔ Dualistic economy (large part of the population still lives in third world
circumstances).
Poverty
1. Poverty levels
● Extreme poverty results in a lack of nutritious food and medical care,
these people struggle to stay alive.
● Moderate poverty are people who earn little income but are still able to
live.
Triple bottom line reporting (Integrated reporting)
Forms an integral part of modern business management, therefore includes reporting
on:
➔ Economic Prosperity (Profit)
➔ Social Responsibility (people)
➔ Environmental Sustainability (Planet)
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