Английский язык. Практический курс для решения бизнес-задач Пусенкова Нина
In its ‘Global Investor Opinion Survey’ of 200 institutional investors undertaken in 2000, McKinsey found that 80% of the respondents would pay a premium for well-governed companies. They defined a well-governed company as one that had mostly outside directors, undertook formal evaluation of its directors, and was responsive to investors’ requests for information on governance issues. The size of the premium varied by market, from 11% for Canadian companies to around 40% for companies where the regulatory background was least certain (in Morocco, Egypt and Russia).
Other studies have linked broad perceptions of the quality of companies to superior share price performance. A study of five-year cumulative returns of Fortune’s survey of ‘most admired firms’ found that those «most admired» had an average return of 125%, whilst the ‘least admired’ firms returned 80%. In a separate study Business Week enlisted institutional investors and ‘experts’ to assist in differentiating between boards with good and bad governance and found that companies with the highest rankings had the highest financial returns.
Source: Wikipedia
Essential Vocabulary
1. corporate governance – корпоративное управление
2. fiduciary (fid) a – доверенный, порученный, фидуциарный, основанный на доверии; доверенное лицо, опекун, душеприказчик по завещанию, попечитель
3. constituent n – составная часть, элемент; избиратель
constituent a – имеющий право голоса, избирающий; законодательный; составной
4. best practice – лучшая практика
5. information asymmetry – информационная асимметрия
6. regulator n – регулирующий орган, орган надзора
regulation n – регулирование, правило
regulate v – регулировать
regulatory a – регулирующий
7. Securities and Exchange Commission (SEC) – Комиссия по ценным бумагам и биржам
8. withdrawal n – изъятие, увод, уход, удаление
withdraw v – изымать, отнимать, отказываться, уходить, отходить
9. disclosure n – раскрытие (информации), разглашение
disclose v – раскрывать (информацию), разглашать
10.transparency n – прозрачность
transparent a – прозрачный
11. controls n – регулирующие устройства, рычаги или механизмы контроля
12. moral hazard – моральный риск (риск того, что действия по ослаблению последствий рискованных действий повысят вероятность таких событий)
13. executive director – исполнительный директор
14. superannuation n – пенсия по выслуге лет
15. ex ante – ожидаемый, предполагаемый
16. scheme n – план, программа, схема, диаграмма, структура
17. covenant n – договор, условие или статья договора, ограничивающие действия одной или двух сторон
18. discretion n – усмотрение, свобода действий; полномочия; осторожность, осмотрительность
discretionary a – предоставленный на усмотрение, дискреционный
19. subordinate n – подчиненный
subordinate (to) v – подчинять, ставить в зависимость
subordinate a – зависимый, подчиненный, второстепенный, придаточный
subordinated a – субординированный, младший по объему прав
20. raise money (capital, funds) – привлекать деньги (капитал, средства)
21. expansion n – рост, экспансия, расширение производства, продаж и т. п.
expand v – расширять
22. endorsement n – индоссамент, одобрение, передаточная надпись на векселе, свидетельство известной личности о качестве товара
endorse v – индоссировать, делать передаточную надпись на векселе, подтверждать правильность, подписываться
23. bylaw n – подзаконный акт, регламент, внутренние правила и регламент деятельности компании
24. nominee n – кандидат; лицо, выдвинутое на должность; получатель чего-либо по доверенности
nomination n – номинация, выставление, выдвижение кандидата, назначение на должность
nominate v – предлагать кандидата, назначать на должность
25. mandate n – мандат, наказ, доверенность, поручение
mandate v – передавать под мандат, обязывать
mandatory a – обязательный, принудительный, мандатный
26. listing n – листинг (котировка на бирже)
list n – список
list v – внести в листинг, перечислять
27. London Stock Exchange (LSE) – Лондонская фондовая биржа
28. respondent n – респондент, ответчик (в суде, в ходе опроса или переписи населения)
29. Organization of Economic Cooperation and Development (OECD) – Организация экономического сотрудничества и развития (ОЭСР)
30. premium (pm, prem) n – премия, маржа
31. background n – задний план, фон, обстановка; подготовка, образование, квалификация
background a – фоновой, прошлый
Exercise 1. Answer the following questions.
1. What is corporate governance? 2. What are the important foci of corporate governance? 3. Why has the interest in corporate governance strengthened recently? 4. Who are the parties to corporate governance? 5. What are the key principles of corporate governance? 6. What are the internal corporate governance controls? 7. What are the relative merits of executive and non-executive directors? 8. What are the external corporate governance controls? 9. Are rules better suited than principles to practical implementation of corporate governance? 10. What are the competitive advantages of the liberal and coordinated models of corporate governance? 11. What authority do BoDs have in the U.S.? 12. What is the main difference between corporate governance codes and guidelines? 13. How does the quality of corporate governance affect performance of a company?
Exercise 2*. Find terms in the text that match definitions given below and make sentences of your own with each term.
1. individuals associated together by the fact of residence in the same locality, or of subjection to the same laws and regulations
2. indicating trustee or his office; accepted only because the public has faith in its value
3. empowered to appoint or elect a representative; serving to make up a thing; component
4. a particular course or model of action
5. that which comes out of or results from something; the consequence; the conclusion
6. specialized knowledge
7. an agreement between two or more persons to do or refrain from doing some act; an incidental clause in a legal agreement
8. to assign by writing one’s name on the back; to sanction, ratify or approve
9. a standing rule of an organized group, created for the regulation of its internal organization and the governing of its members; a local law or ordinance enacted by a municipality or other community
Exercise 3. You are a corporate governance expert hired by a Russian company to introduce appropriate corporate governance procedures and develop its corporate governance code. You have to explain to the CEO the potential benefits of the good corporate governance track record and create the corporate governance principles for the company.
Exercise 4*. Fill in the blanks using terms given below.
Techniques that Keep Staff Toeing the Line
According to Sir David Tweedie, chairman of the UK International Accounting Standards Board, the……. and negligence that made a mockery of…….. in the US came down to one thing: greed. «The excessive………. was obscene,» he says. «75% of…….. issued by major companies in America went to the top five…… By fiddling the……., you could end up making so much money from stock options that you didn’t have to work thereafter – and neither did your family for several generations.»
Sir David is equally scathing about those involved in corporate governance who……. to prevent problems. In his view, executive…… failed; non-executives were kept in the dark;……. committees failed;……. fell asleep at the wheel;…… agencies did none too well;…… missed it; the…….. failed to regulate; and the…….. and lawyers were part of the problem, helping companies with their questionable……..
«That is why it was such a shock to corporate America,» he explains. «It wasn’t just one little piece gone wrong, but a whole line of…….. that went flat. The whole system was collapsing.»
Since 2001, the debate about corporate governance has spun off in many directions. It has taken in executive remuneration, financial……. standards, the…….. of non-executive directors, auditor……… investor trust, the split between the roles of…….. and chief executive, and wider……… The unifying theme in all such……. is that they primarily concern company boards. The subtext is clear: corporate governance is the preserve of the very…….. business people.
Yet corporate governance has far wider resonance. The Turnbull Report, aimed at spreading……. in UK governance, made clear that while…….. for internal control ultimately rests with a board…….. involves employees too. «All employees have some responsibility for internal control as part of their……… for achieving objectives,» the report states. «The system of internal control should be…….. in the operations of the company and form part of its culture.»
Bill Waite, chief executive of the Risk Advisory Group, says that like so many other things in business, governance involves the…….. and…….. of a workforce. «The biggest risk in any company comes from the…….. Even where the…….. is external, you usually find an employee has been befriended and then exploited.»
On the other hand, staff can also be antennae for…….. When investigating the Tyco International fraud, the Manhattan District Attorney remarked that he found it «extremely troublesome… that no………. had come forward.» The majority of FTSE 500 companies now have these………. in place.
Traditionally, of course…….. practices have been seen as somewhat beneath the interest of boards. Yet if the systems and procedures operating within an organisation to…….. risks are governance issues, theoretically that ought to change. So how far should companies go towards embedding……… behaviour?
Andrew Wilson, director of the Ashridge Centre for Business and Society, says the answer depends on both the…….. culture of individual companies and the…….. business cultures in which those companies………. US companies tend to take a very……….-driven attitude to governance, setting down on paper exactly what is expected of employees. «Gift policies sometimes say a case of wine is inappropriate, while a bottle of wine is fine – it is that detailed», he explains.
Meanwhile, European companies prefer broad principles that allow greater……. for individual……… Ideally, says Mr. Wilson, governance should allow for «disciplined……….».
«A rule-based, bureaucratic……… encourages people to think about what they can get away with, when what you want are sensible judgements in line with business…….. Perhaps, the classic question to ask is „How would I feel if this (action) was reported in the press?“
Although detailed rules make it easier for an auditor to control its clients, they also make it easier for people to work out exactly what to do to get around them. «An investment bank will come up with a……. in three seconds,» he says. «In contrast, a……. will catch all variations.»
According to Brian Gregory from Oracle, corporate governance may serve to break down «the fortress HR formality», as boards take a greater interest in an area normally seen as off-limits. «There has been a huge amount of attention on……., but so much less on the people aspects of risk,» he says.
The renewed…… on corporate governance has given a spur for HR…….. systems to be developed that are able to interact with accountancy and other business systems, he says. Information about the skills, competencies……… aspirations and…… of individual employees is now no more than a few mouse clicks away from…….-conscious board members. Modern HR software enables additional……. on employee risk. «At the end of the day,» concludes Mr. Gregory, «governance is about making sure there are no surprises.»
Source: Financial Times
Terms:
SEC, boards, audit, investment banks, focus, fraud, corporate governance, accounts, failed, auditors, analysts, checks and balances, reporting, procedure, effectiveness, background, independence, operate, competence, chairman, internal, empowerment, malfeasance, principle, accountancy, whistleblowers, conflicts of interest, credit rating, remuneration, controls, issues, executives, senior, stock options, expenses claims, mitigate, best practice, responsibility, deals, managing risks, accountability, discretion, embedded, quality, staff, threat, HR, ethical, domestic, compliance, scope, approach, values, scheme, security, IT
Exercise 5. Translate into English.
Корпоративное управление в ТНК-ВР
Стратегия ТНК-ВР подчеркивает важность прозрачности и хорошего корпоративного управления в построении русской компании мирового класса и достижении уровня, сопоставимого с уровнем наших международных коллег.
ТНК-ВР рассматривает хорошее корпоративное управление как ключевой двигатель создания ценностей. Этика управления и профессионализм – фундамент, на котором строятся эксплуатационные усовершенствования.
В течение следующих пяти лет ТНК-ВР будет внедрять стандарты корпоративного управления, которые помогут достигнуть самого высокого уровня не только на российском рынке, но и с течением времени позволят конкурировать с лидерами международного рынка.
Совместно с высоким качеством человеческого капитала, полученным от трех компаний-предшественниц, высокие стандарты управления обеспечат ТНК-ВР устойчивым фундаментом для дальнейшего роста.
Совет директоров из 10 членов (с одинаковым количеством представителей двух акционеров компании – ВР и AAR) управляет ТНК-ВР. Правление имеет два комитета – Комитет по аудиту и Комитет по компенсациям. Ежедневное управление компанией выполняет команда высшего руководства.
Точная и своевременная информация – основа хорошего корпоративного управления. Прозрачность, обеспеченная своевременным потоком точной информации от производства до управления (и обратно), дает возможность эффективного прогнозирования и планирования, принятия обоснованных решений и логичного распределения ресурсов.
ТНК-ВР находится на стадии реализации нескольких проектов, целью которых является повышение уровня корпоративного управления и увеличение прозрачности. Так, широкомасштабный проект трансформации бухгалтерского учета (ATP) начался в начале 2004-го и был нацелен на модернизацию систем и практики учета. Как первый проект подобного рода в российской нефтяной промышленности, он разрабатывался для того, чтобы компания получала в ускоренном режиме более точную и полную информацию для нужд внешней и внутренней отчетности. В ходе проекта были достигнуты следующие цели:
– время, необходимое для закрытия данных, сократилось до 10 дней;
– был разработан единый план счетов (chart of accounts);
– учет в соответствии со стандартами МСФО (IAS) осуществляется в регионах;
– сохранность и целостность данных обеспечивается внедренными и контролируемыми системами.
В дополнение к этому было начато внедрение проекта по усовершенствованию системы внутреннего контроля и «Кодекса деловой практики и корпоративных стандартов».
Источник: www.tnk-bp.ru
Lesson 16
Corporate Social Responsibility
Read and translate the texts and learn terms from the Essential Vocabulary.
People, Planet and Profit
Corporate social responsibility (CSR) refers to a company’s obligation to be sensitive to the needs of all its stakeholders in its business operations. The principle is closely linked with the imperative of ensuring that these operations are «sustainable». ‘Sustainable development’ was defined by the 1987 Brundtland Commission as development that «meets the needs of the present generation without compromising the ability of the future generation to meet their own needs.» In other words, meeting the goals of sustainable development means searching for development paths that permit decoupling of economic growth from environmental degradation.
Today’s heightened interest in the proper role of businesses in society has been promoted by increased sensitivity to environmental and ethical issues. In some countries government regulation of environmental and social issues has increased, and standards and laws are also often set at a supranational level (e.g. by the European Union).
It is important to distinguish CSR from charitable donations and «good works». Corporations have often spent money on community projects, the endowment of scholarships, and the establishment of foundations. They have also encouraged their employees to take part in community work thus enhancing the reputation of the company and strengthening its brand.
CSR goes beyond charity and requires that a responsible company will take into account the impact on all stakeholders and on the environment when making decisions. This holistic approach to business regards organizations as being full partners in their communities, rather than being primarily in business to make profits and serve the needs of their shareholders.
CSR reporting
The application of Sustainable Development principles through the introduction of a CSR policy is often accompanied by what is called triple bottom line reporting which declares that it is necessary to account for not only financial results, but also for the social and environmental impact of the business, i.e. focus not only on Profit, but on People and Planet aspects as well. Some countries (e.g. France) have made such reporting mandatory. However the measurement of social and environmental performance is difficult and new measurement techniques need to be developed.
Advocacy for triple bottom line reforms is popular in Green Parties and in the United Nations circles.
While many people agree with the importance of social and environmental goals, there are also many who disagree with the ‘Triple Bottom Line’ as the way to achieve these goals. The main arguments against it may be summarized as:
Division of labor, which is characteristic of rich societies and a major contributor to their wealth, ensures that organizations contribute most to the welfare of society when they focus on what they do best. Business’s expertise is in satisfying the needs of society and generating a value-added surplus. Thus the ‘triple bottom line’ is diverting business attention away from its core competency. Just as charitable organizations like the Salvation Army would not be expected to pay a cash dividend, business should not be expected to take on concerns outside its core expertise.
Effectiveness. Concern for social and environmental matters is rare in poor societies (a hungry person would rather eat the whale than photograph it). As a society becomes richer its citizens develop an increasing desire for a clean environment and protected wildlife, and both the willingness and financial ability to contribute to this. The ‘Triple Bottom Line’ is said to be an example of the choices available to the citizens of a society made wealthy by businesses attending to business. Thus, Adam Smith’s Invisible Hand will ensure that business contributes most effectively to the improvement of all areas of society.
Nationalism. Some countries adopt a nationalistic approach with the view that they must look after their own citizens first.
Inertia. The difficulty of achieving global agreement on simultaneous policy may render such measures at best advisory. People would be unwilling to undergo a depression or recession in order to remediate lost ecosystems.
Many large companies now produce annual reports that cover Sustainable Development and CSR issues, and these reports are often externally audited. But there is no common template for the reporting and the evaluation methodology varies between companies. Critics often comment that some of these reports are just an ad and as an example note that Enron published a glossy «Corporate Responsibility Annual Report» and that tobacco corporations such as BAT also produce social reports.
The Global Reporting Initiative (GRI) is an attempt to standardize sustainability reporting and the AA1000 standard is an attempt to improve their legitimacy.
Criticism of CSR
Some critics of CSR, such as Milton Friedman, argue that a corporation’s principal purpose is to maximize returns to its shareholders, whilst obeying the laws of the countries within which it works. Others argue that the only reason corporations put in place social projects is utilitarian; that they see a commercial benefit in raising their reputation with the public or with government.
It is clear that a CSR activity generally can only be effective at achieving social or environmental outcomes to the extent that it maximizes profits: hence the CSR slogan – «doing well by doing good». This requires that the resources applied to CSR activities must generate a higher return than those resources could obtain if applied anywhere else, e.g. capital investment, lobbying for tax relief, outsourcing, fighting against unionization, or taking market risks.
Some argue that it is self-evidently «good» that businesses should seek to minimize any negative social and environmental impact of their economic activity. It can be beneficial for a company’s reputation to publicize any environmentally friendly business activities. A company which develops new engine technology to reduce fuel consumption will be able to promote its CSR credentials as well as increase profits.
A conflict can arise when a corporation espouses CSR and its commitment to Sustainable Development on the one hand, whilst damaging revelations about its business practices emerge on the other. The McDonald’s Corporation has been criticized by CSR campaigners for unethical business practices, including mistreatment of workers, misleading advertising, and unnecessary cruelty to animals. Similarly Shell has a much-publicized CSR policy and was a pioneer in triple bottom line reporting, but was involved in 2004 in a scandal over the misreporting of its oil reserves, which seriously damaged its reputation and led to charges of hypocrisy.
Source: Wikipedia.
People, Planet, Profit: The Value of CSR
CSR, also referred to as corporate stewardship or corporate citizenship, has become increasingly important to companies competing in today’s business climate. Companies focusing on the ideals of People, Planet, and Profit further bolster the notion that addressing social and environmental issues supports the attainment of financial goals and can be critical to long-term corporate success.
But the biggest question surrounding CSR is not «Is this the right thing to do?» but a more in-depth, «Why should we do this?» Profitable business and CSR are not mutually exclusive. There are many solid reasons as to why CSR is good business.
Branding
The market has become oversaturated with company messages touting the newest, hottest, or cheapest. This has lessened the effectiveness of traditional marketing efforts and jaded the audiences they are aimed at. Relationship and cause marketing are two avenues in which companies can realize the value of their brand, build good will, and establish lasting impressions with their stakeholders. Brands like Avon, The Body Shop, Timberland, and Target have made their social commitments a fundamental component of their corporate mission, and reputation. This attitude is reflected in their marketing efforts and has resulted in a stronger brand reputation, and increased revenues. People want to align themselves with companies they admire and respect.
Conversely, companies that have tarnished their brands by not acting responsibly in regard to their stakeholders have discovered that ignoring social responsibility has irreparably damaged their brand i as well as their bottom line. Enron and WorldCom are two highly publicized examples of companies who put profitability ahead of responsibility. The glare of the media is aimed directly at corporations nowadays; any small glitch in a company’s reputation could dramatically impact their revenues both long– and short-term.
Socially Responsible Investment Institutions
Socially responsible investment funds (SRIs) offer perhaps the most direct financial link to CSR. The influence of SRIs internationally can be seen in the hundreds of funds, the number of shareholder resolutions filed, and the financial performance of companies associated with SRIs.
Globally, this group of funds has tremendous financial leverage. While each fund offers a unique perspective, common themes include their CSR criteria used for company selection and evaluation. Equally, companies not meeting a minimum threshold of social performance are those typically targeted for shareholder resolutions.
Building a business case for CSR is strengthened by the performance of SRI-based companies. The Dow Jones Sustainability Index (DJSI) has historically tracked the performance of companies with active CSR initiatives, measuring them against companies not aligned with CSR principles. Companies with CSR programs have consistently outperformed those without CSR over the past five years.
Legislation and Litigation
Generally, a company’s actions are governed by its adherence to laws and compliance with business regulations. Historically, it has been assumed that corporate leaders are guided by their own moral compass; values and ethics influence decisions and legislation is not required to govern morality and behavior. However, certain corporations have sullied the reputation of business in general. As a result, recently we have seen a rise in legislation, fines, and litigation surrounding corporate responsibility. To be in compliance with current laws, avoid penalties and litigation, adopting a philosophy of CSR makes good business sense.
Avoidance of litigation is another motivator for companies to adopt socially responsible practices. Increasingly, activist and non-governmental organization groups are using litigation in an attempt to change corporate behavior. Previously, efforts by these groups included shaming a company to change behavior through adverse media and filing shareholder resolutions to demand change. These same groups are now filing lawsuits in their attempts to force companies to embrace socially responsible practices.
Employees and Customers
Employee recruitment, retention, and morale are strong business reasons for corporations to integrate CSR into their organizations. Research studies that evaluate the impact that CSR has on employee recruitment and retention offer the following data.
Companies demonstrating strong CSR commitments find it easier to recruit employees, particularly in tight labor markets.
A 1997 study of 2,100 MBA students found that more than half said they would accept a lower salary to work for a socially responsible company.
CSR efforts strengthen a company’s position as an employer of choice.
Morale, motivation, innovation, productivity and creativity are all improved by providing the opportunity for people to work for organizations that not only support their career but also provide for much deeper meaning in their life.
Integrity at work relates to employee loyalty. 40% of employees who say their senior leaders have high personal integrity are also truly loyal to their organization. That number drops to only 6% when employees do not believe their senior leaders have integrity.
Also, numerous studies have shown that there is a direct correlation between CSR and the ability to attract and retain customers. Customer choice has traditionally been driven by price, quality, appearance, safety, convenience, and accessibility. However, increasingly other value-based criteria are influencing purchasing decisions.
Product Improvement / Cost Reduction
Lower recruiting costs, larger market share, fewer regulatory fines, waste reduction, cost savings through recycling, and increased stock price and shareholder value are all tangible metrics for CSR.
Studies also suggest that reduced regulatory costs, and customer complaints are additional financial benefits realized after the implementation of a CSR program. However, there is research that supports a more direct cost/benefit analysis of CSR efforts. Intel provides a good case study of specifically measuring and quantifying their CSR improvement and associated financial benefit.
Intel has a system of assessments and audits that yields hard data regarding the social and environmental performance of its suppliers. This data allows Intel to better manage its supply chain by enabling the suppliers to become part of the company’s continuous improvement process. This process of assessing and auditing its supply chain has been integral in drawing a correlation between Intel’s CSR efforts and their business implications.
Source: www.eorm.com
Essential Vocabulary
1. Corporate Social Responsibility (CSR) – социальная ответственность корпораций
2. obligation n – обязательство, обязанность, долг
oblige v – обязывать, принуждать; делать одолжение
3. sensitivity n – чувствительность
sensitive a – чувствительный
4. sustainable a – устойчивый
5. supranational a – наднациональный
6. charity n – благотворительность
charitable a – благотворительный
7. endowment n – вклад, дар, пожертвование; (дарственный) фонд; дарование
endow v – обеспечивать постоянным доходом, наделять, одаривать, делать дар
8. foundation n – закладка (фундамента), фундамент, основание; обоснование, основа; фонд, пожертвованный на культурное начинание; учреждение или организация, существующая на пожертвованный фонд
9.triple bottom-line – тройная итоговая строка
10. advocacy n – защита, адвокатура; пропаганда
advocate n – адвокат, защитник, заступник, сторонник
advocate v – отстаивать, защищать, выступать в защиту, пропагандировать
11. division of labor – разделение труда
12.welfare n – благосостояние, благоденствие, благополучие; благотворительность
13. remediation n – исправление, лечение, восстановление
remedial a – исправительный; лечебный; ремонтный; являющийся средством судебной защиты
14. template n – шаблон, лекало, калибр
15. Global Reporting Initiative (GRI) – глобальная инициатива по отчетности
16.ad (advertisement) – реклама (амер. жаргон)
17. legitimacy n – законность; закономерность; законнорожденность
legitimate a – законный; допустимый; оправданный; законнорожденный
18. tax relief – налоговая скидка, освобождение от уплаты
19. union n – союз, профсоюз
unionization n – охват профсоюзом, объединение в профсоюз
unionize v – охватывать профсоюзом, объединять в профсоюз
20. environmentally friendly – экологически дружественный (безопасный)
21. credential n – мандат, удостоверение личности; рекомендация, (мн.) верительные грамоты
22. stewardship n – управление, распоряжение
steward n – управляющий, распорядитель; стюард
23. corporate citizenship – социально ответственное поведение корпораций
corporate citizen – социально ответственная корпорация
24. branding n – брендинг
25. socially responsible investments (SRI) – социально ответственные инвестиции
26. resolution n – выражение желания или намерения что-то сделать; резолюция или решение; разрешение спора
27.threshold n – порог
threshold a – пороговый
28. Dow Jones Sustainability Index (DJSI) – индекс устойчивости Dow Jones
29.fine n – штраф, пеня; тонкий; точный; первоклассный
fine v – взимать штраф, налагать штраф
30. litigation n – судебный процесс, судебное дело, тяжба
litigant n – истец или ответчик в судебном процессе
litigate v – судиться, оспаривать на суде
31. non-governmental organization (NGO) – неправительственная организация
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