Corporate Governance And Ethics Practice

collective Governance And ethics PracticeThis wrap up looks at the differences of the sustainability shroud for year 2011 of the two companies that from the same automotive industry and based in different countries. The first bon ton is a Volkswagen root word, which is a German international automotive manufacturing federation based in Wolfsburg and founded in 1937. The ara served of Volkswagen Group is worldwide and it produced al virtually 8.5 million vehicles in year 2011. It is one of the worlds leading force automobile manufacturers and has kept the largest commercialize share in Europe for over 20 years (Wikipedia, 2012). The second company is a Mazda Motor corporation, which is the lacquerese automotive manufacturer headquartered in Fuchu Aki Hiroshima and founded in 1920. The area served of Mazda Motor Corporation is worldwide and it produced almost 1.3 million vehicles for global sales in 2007 (Wikipedia, 2012).Are all the railway car manufacturers harmful to s ociety and environment? Based on these two firms sustainability coverage, both firms conduct revealed that they are taking their corporate social responsibility seriously which pass on audit and ginmill their activities, and putting money into atomic number 19 research. The two automotive companies, of course, have to comply with toughening fuel economy regulations reduce the impact of global warm and be more compliant because there is an increasing market demand that red-hot genesis of consumers are looking at fuel economy and sustainability mobility for fashioning decision for what they buy. For fuel economy regulations, according to (Feng Amanda, 2004) in their report for Pew Center on Global Climate Change that the European Union (EU) and lacquer have the most stringent standard for requirement for gasoline new passenger car fuel efficiencies as shown in their report.For the purposes of this assignment, the focus leave behind be on sets out the differences between th e reports of the two companies on in cost of the range of issues dealt with in the reports and the depth of the coverage explains to the differences between the two reports in monetary value of country factors assesses the quality of the reporting in terms of Zadeks (1997) criteria (i.e. inclusivity, comparability, completeness, evolution, curbment policies and governances, disclosure, external verification, and continuous improvement) evaluates the extent to which it would be appropriate for the two companies to use a similar approach and makes recommendations about how each of the reports could be improved and why.DIFFERENCES surrounded by THE TWO REPORTS IN TERMS OF THE RANGE OF ISSUES DEALTH WITH IN THE REPORTS AND THE DEPTH OF THE COVERAGEThe sustainability reports of these two automakers have look into consideration of ESG criteria (environmental, social and corporate governance) and making major strides in these similar sustainability issues Management Approach corpor al Governance and Ethics Practice Environmental security system Product Quality and Safety Workplace Practice Human Rights and Community Practice.In terms of reporting structure, Volkswagen Group had divided the report to eightsome chapters, which are dodge, economy, society, CSR projects worldwide, sustainability mobility, environment, key indicators/figures, and back-up. On the contrary, Mazda Corporate had identified the six chapters, which are Mazda CSR, management, environmental protection, social constituents, client satisfaction, and respect for people. The next few paragraphs of this report will looks at the coverage of the issues dealt in these chapters and the differences between the two sustainability reports.Management ApproachAt Strategy chapter, Volkswagen Group had queerd the management approach on CSR system in eight pages that cover company new sustainability objectives, development of top class team, sustainability requirements for suppliers, management approa ch to the sustainability mobility, sustainability management of corporate social responsibility, stakeholder dialogue, global compact, cooperation with Biodiversity preservation Union (NABU), and the compliance to corporate code of conduct. Whereas Mazda Corporate had tell their approach of CSR strategy in the chapter of Mazda CSR in seven pages that covered corporate vision, CSR operations, external valuation of CSR, awards, rising of employee awareness, stakeholders communication, shareholders and investor relations initiatives and dialogue.Set-aside the unstandardized of reporting structure, Volkswagen Group had divulge the basis of learning on its stakeholder dialogue program, but had not follow Mazda Corporate to disclose information on how company engages with each key stakeholders that with a full page table of Mazda group key responsibilities to stakeholders and opportunities for dialogue and disclosure.Corporate Governance and Ethics PracticeAt Economy chapter, Volkswag en Group had covered this chapter in seven topics, which are customer satisfaction, sustainability in suppliers relations, economic stability, raw material, localization, risk management, and compliance. On the contrary, Mazda Corporate covered this in two chapters with total of seven topics, which are corporate governance, internal controls, risk management, compliance, implementing CSR in the value chain, and customer satisfaction.At Customer ecstasy topic, Volkswagen Group identified customer satisfaction as a key indicator of how well product developments and model facelifts cater to the needs of stakeholders, and focuses on market studies, complaint handling, and meets customer wishes. Mazda had covered this topic with extensive information on guard approach from three viewpoints of vehicles, people, and roads and infrastructure, with details information in safety technologies to explain how safety can be achieved. Additionally Mazda also covered extensive information in the four pillars that how the company can increase customer satisfaction, which are creating appealing products, improving product quality, improving customer satisfaction in sales, and improving the quality of after-sales service.At Sustainability in Suppliers Relations topic, Volkswagen Group had explained the system was built on four pillars which are sustainability requirements for suppliers before submitting quotes, an early warning system for minimizing risk, a transparent procurement process, and supplier monitoring and development process. On the contrary, Mazda had covered clearer information that outline on the Mazda supplier CSR guidelines, major channels of communication with supplier, evaluating and recognizing suppliers, measurement and quality improvement program for local suppliers.At economical Stability topic, Volkswagen looked at global economic competition and stability the company recognized the effort that to help in global economic is to achieve sustainable succe ss by taking more responsibility for the environment and for social developments. This topic not covered by Mazda.At Raw Material topic, Volkswagen Group had revealed the secure and economic supplies of raw materials program, which contains corporate analysis system and regularly engages in dialogue with the Extractive Industries Transparencies Initiative (EITI) to identify risk of subversion. This topic not covered by Mazda.At Localization topic, Volkswagen Group had covered the implementation of systematic localization that had proven not only benefits in logistical but commercially and generates growth in the respective regions at new Volkswagen plan. This topic is not cover by Mazda.At Risk Management topic, Volkswagen Group had disclosed information on its risk management programs briefly. As a comparison, Mazda had enclosed more information on risk management policy, action guidelines, and methods of implementing, and the scopes of application.At Compliance topic, Volkswagen had adumbrate its compliance effort to keep in line with Germane Corporate Governance Code, which is core compliance teams were appointed, annually evaluation of compliance activities, anti-trust legislation matters, and corruption measurement. On the contrary, Mazda had revealed extensive information on corporate governance framework diagram that help in better understanding of company effort in dealing with management issues and how company boost transparency of management with board of corporate auditors. Also Mazda had covered internal controls topic that not by Volkswagen Group, which is disclosed its own self-examination of internal controls framework that having a department to support internal controls.Workplace Practice, Human Rights and Community PracticeAt Society and CSR Projects oecumenical chapter, Volkswagen Group had covered three ethic issues here, which are Workplace Practice, Human Rights and Community Practice. There are three topics covered, which are employme nt, reward and profit communion system, AUTOUNI institution, Volkswagen way, employee opinion survey, ideal management, training and skills development, demographic change, advancing women and promoting diversity, social responsibility, and reveals on CSR projects worldwide. On the contrary, Mazda Corporation had covered in eight topics, which are social contribution framework, major activities in Japan and overseas, human development resolving around the principles of the Mazda Way, employee choice of self-realization, promoting work-life balance, advancing women and promoting diversity, reward and profit sharing system, and respect for human rights. As a comparison, Mazda had included a great entropy in the same page to explain their measurement and how Mazda achieve the goals.Environmental Protection and SustainabilityIn terms of environmental protection and sustainability issue, these two companies had revealed their strategies in similar structure and topics, as shown in the table 1 below. The major differences between the two reports are Mazda had disclosed an impressive Mazda Green Plan 2020 Mid-Term Environmental Plan and clear data within the topic that help in understanding the topic. Both companies had covered approximate information on how they promote in climate protection, and the coverage are CO2 emissions reduction for automobile, energy supply strategy, environment factory, efficient production, environmental technology, green IT, and green logistics.Table 1 Comparing the coverage of environmental protection and sustainability issueVolkswagen GroupMazda CorporationEnvironmental ManagementMazda Approach to the EnvironmentThis is not cover by Volkswagen.Green Plan 2020 Mid-Term EnvironmentalEfficient Powertrains and FuelsDeveloping New SKYACTIV TechnologyElectro-mobilityMaking Environmentally Friendly vehiclesResource Efficient cycle and Resource ConservationBiodiversityManagement and Reduction of substancesWaterPreventing Air and Water Poll utionThis is not cover by Volkswagen.Environmental CommunicationClimate ProtectionPrevention of Global WarmingThis is not cover by Volkswagen.Environmental CommunicationThis is not cover by Volkswagen.Activities and Impact on the environmentDIFFERENCES BETWEEN THE TWO REPORTS IN TERMS OF COUNTRY OR INDUSTRY FACTORSThe effects of the Great East Japan Earthquake in year 2011 has influenced on how Mazda Corporate structured and produced their sustainability reporting. The word earthquake had appeared 25 times in the sustainability report. The top message of chairman of the board has included a paragraph to express company sympathies and condolences message. The paragraph explained how company makes a concerted effort to establish their ethical strategies, and deploy response plan into action to contribute in recovery for the areas stirred by earthquake. The details of support activities for the recovery of stricken regions have presented in this formal report. The report also reveals the damage to Mazda group that Hiroshima Plant and Hofu Plant where impel to suspend operations temporary due to inability to obtain certain parts, and Mazda moved to weekly days off from Saturday and Sunday to Thursday and Friday during the summer point in time in accordance with the policy of the Japan Automobile Manufacturers Association to reduce electricity consumption.For CSR strategy, Mazda Corporate evaluates its CSR strategy referencing to the Charter of Corporate Behavior issued by the Japan Business Federation (Nippon Keidanren, 2004), and structure the table of contents of the sustainability report on these areas of Environmental Protection, Customer Satisfaction, Respect for People, Social Contributions, and Management (Compliance and Information Disclosure). Whereas Volkswagen Group has referencing their CSR strategy with EU Strategy 2011-14 (European Trade Union Confederation ETUC, 2011) and structure the table of contents in these areas of Strategy, Economy, Soci ety, CSR Projects Worldwide, Sustainability Mobility, Environment, Key Indicators, and Back-up.In terms of code of ethics, Volkswagen Group has paragraph their compliance report in line with the German Corporate Governance Code, aside of Volkswagen corporate ethics codes of conduct. Per required by section 161 of the Aktiengesetz (AktG German phone line Corporation Act), an annual of conformity with the German Corporate Governance Code has issued by the Board of Management and the supervisory Board of Volkswagen AG on November 18, 2011 (Volkswagen, n.d.). Whereas Mazda Corporation has outlined their five principles of Mazda corporate ethics code of conduct.THE QUALITY OF THE REPORTING IN TERMS OF ZADEKs (1997) CRITERIAThis paragraph looks at the quality of the reporting in terms of ZADEK et al.s (1997) eight principles of quality in social accounting. To what extend the reporting of two companies conforms to and contributes to the best practice. The eight issues are Inclusivity, comparability, Completeness, Evolution, Management policies and systems, Disclosure, External verification, and Continuous Improvement.InclusivityAAAComparabilityAAACompletenessAAAEvolutionAAAManagement policies and systemsAAAExternal verificationAAAContinuous ImprovementAAATHE EXTENT TO WHICH IT WOULD BE conquer FOR THE TWO COMPANIES TO USE A STANDARDISED APPROACHCurrently the Global Reporting Initiative (GRI) framework, version 3.1, is the most widely used standardized sustainability reporting framework in the world (Wikipedia, 2012). The two companies have adopted the GRI framework as a reference to compile their reports. However both companies reports are not prepared exactly according to GRI guidelines and structure. Should two companies have to use a standardized approach for their sustainability reports that will exactly according to a GRI framework, so that it is utile for reader to navigate the report, finding specific information, and easier to compare data among similar companies. Or should companies are recommended to be selective or focus primary that are most relevant to their business. To what extent that it would be appropriate for the two companies to use a standardized approach?It is not possible for the two companies to presence their data in sustainability reporting exactly the same structure and templates because each company is having their own reporting tools, data and context. However it is possible that the two companies to disclose and to measure of the extent to GRI Guideline Content Indexes.However as per Crane Matten (2010, p. 219) recognized that there is an issue with GRI which GRI has been criticized is its concern only with establishing procedures for voluntary reporting, rather than having an explicit baffle to promote mandatory reporting. So it is not a regulation that company must follow the same GRI framework rules to prepare company sustainability report. Every company is free to determine its own data according to rul es of its own choosing, and there is no effect or penalty at all.The new GRI fourth generation is now in development. It is an opportunity for the GRI seeking input from worldwide into development of the new standard which cater all the possible gaps in standardized approach. With the new G4 GRI standard it should improve on content in the current guidelines that could possibility encourage companies to use a standardized approach.THE RECOMMENDATIONS ABOUT HOW EACH OF THE REPORTS COULD BE modify AND WHYGRI Content IndexMazda Corporation could improve their sustainability report by including a comparative table with GRI content exponentes that disclose all items in the report at each rows of GRI content index. On the contrary, Volkswagen Group had included the GRI content index but the reference column that contains page number can be confused to some readers and might be pointing to the wrong topic. The comparative table with GRI content index could provides an objective to measur e whether all the elements in GRI guidelines have been utilize in the report. It is definitely helpful for reader to find specific information and to compare data among similar industry. The sample of comparative table with GRI content index has shown below.Table 2 The Sample of Comparative Table with GRI content index (G3.1)ItemGRI ContentVolkswagen GroupMazda CorporationStrategy and Analysis1.1Statement from the most senior decision maker-Responsibilities increase with commercial success (Page 6-7)-Top Message (Page 5-6)1.2Key Impacts, risks-Responsibilities increase with commercial success (Page 6-7)-Responsibilities (Page 10-19)-Compliance (Page 28-29)-Top Message (Page 5-6)-Management (Page 21-22)Organization Profile2.1 appellation of the organizationPage 1, 3Page 1-2GRI Content IndexMazda Corporation.CONCLUSIONReporting on sustainability performance is an important way for organizations to manage their impact on sustainable development. The challenges of sustainable developme nt are many, and it is widely accepted that organizations have not only a responsibility but also a great ability to exert positive change on the state of the worlds economy, and environmental and social conditions.Reporting leads to improved sustainable development outcomes because it allows organizations to measure, track, and improve their performance on specific issues. Organizations are much more likely to effectively manage an issue that they can measure. By taking a proactive role to collect, analyze, and report those steps taken by the organization to reduce potential business risk, companies can remain in control of the message they want delivered to its shareholders. Public pressure has proven to be a successful method for promoting Transparency (behavior) and disclosure of greenhouse gas emissions and social responsibilities.As well as helping organizations manage their impacts, sustainability reporting promotes transparency and accountability. This is because an organiza tion discloses information in the public domain. In doing so, stakeholders (people affected by or interested in an organizations operations) can track an organizations performance on broad themes such as environmental performance or a particular issue such as labor conditions in factories. process can be monitored year on year or can be compared to other similar organizations.(2704 words)(References/bibliography on the next page)