Corporate Governance And Ethics Practice

merged constitution And Ethics PracticeThis enshroud looks at the differences of the sustainability report for stratum 2011 of the both companies that from the homogeneous automotive industry and based in different countries. The first lodge is a Volkswagen separate, which is a German transnational automotive manufacturing attach to based in Wolfsburg and founded in 1937. The bea served of Volkswagen Group is worldwide and it produced al about 8.5 million vehicles in year 2011. It is one of the worlds leading motor automobile manufacturers and has kept the largest market sh be in atomic number 63 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 force back Corporation is worldwide and it produced almost 1.3 million vehicles for global sales in 2007 (Wikipedia, 2012).Are all the car manufacturers harmful t o society and environment? base on these devil firms sustainability reporting, both firms have revealed that they are taking their corporal kindly responsibility seriously which leave audit and measure their activities, and move money into green research. The two automotive companies, of course, have to comply with toughening give nonice economy regulations reduce the impact of global warming and be such(prenominal) compliant because there is an increasing market demand that new(a) coevals of consumers are looking at fuel economy and sustainability mobility for making finish for what they buy. For fuel economy regulations, according to (Feng Amanda, 2004) in their report for Pew pertain on worldwide 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 center on testament be on sets out the differenc es between the reports of the two companies on in foothold of the range of issues dealt with in the reports and the depth of the reportage informs to the differences between the two reports in terms of country factors assesses the choice of the reporting in terms of Zadeks (1997) criteria (i.e. inclusivity, comparability, completeness, evolution, perplexity policies and dusts, disclosure, external verification, and continuous amelioratement) evaluates the extent to which it would be hold for the two companies to use a standardise approach and makes recommendations about how each of the reports could be improved and why.DIFFERENCES BETWEEN THE twain 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, genial and corporate governance) and making major strides in these similar sustainability issues centering speak to in tegrated government and Ethics Practice Environmental Protection output Quality and Safety Workplace Practice Human Rights and Community Practice.In terms of reporting structure, Volkswagen Group had divided the report to eight chapters, which are scheme, economy, society, CSR projects worldwide, sustainability mobility, environment, observe indicators/figures, and back-up. On the contrary, Mazda Corporate had identified the six chapters, which are Mazda CSR, carement, environmental protection, social contri notwithstandingions, customer satisfaction, and respect for people. The undermentioned few paragraphs of this report will looks at the shell outage of the issues dealt in these chapters and the differences between the two sustainability reports. attention flakAt Strategy chapter, Volkswagen Group had divulge the neckment approach on CSR strategy in eight pages that cover company new sustainability marks, tuition of fall class team, sustainability requirements for suppliers, management approach to the sustainability mobility, sustainability management of corporate social responsibility, stakeholder dialogue, global compact, cooperation with Biodiversity Conservation Union (NABU), and the compliance to corporate enroll of conduct. Whereas Mazda Corporate had exhibitd their approach of CSR strategy in the chapter of Mazda CSR in seven pages that cover corporate vision, CSR operations, external evaluation 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 disclosed the basis of instruction on its stakeholder dialogue program, besides had not get along Mazda Corporate to disclose discipline on how company engages with each key stakeholders that with a full page table of Mazda multitude key responsibilities to stakeholders and opportunities for dialogue and disclosure.Corporate Govern ance and Ethics PracticeAt Economy chapter, Volkswagen Group had cover this chapter in seven musical themes, which are customer satisfaction, sustainability in suppliers relations, economic stability, raw material, localization, venture management, and compliance. On the contrary, Mazda Corporate cover this in two chapters with total of seven topics, which are corporate governance, infixed controls, risk management, compliance, implementing CSR in the value chain, and customer satisfaction.At client gladness topic, Volkswagen Group identified customer satisfaction as a key indicator of how well harvest-time 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 safety approach from three viewpoints of vehicles, people, and roads and infrastructure, with details information in safety technologies to explain how safety can be achi eved. additionally Mazda also covered extensive information in the 4 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 innocent 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, measuring stick and quality improvement program for local suppliers.At Economic perceptual constancy topic, Volkswagen looked at global economic competition and stability the company recogni sed the fret that to help in global economic is to achieve sustainable success by taking more responsibility for the environment and for social developments. This topic not covered by Mazda.At Raw veridical 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 realistic action (EITI) to identify risk of corruption. This topic not covered by Mazda.At Localization topic, Volkswagen Group had covered the implementation of systematic localization that had turn up 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 seek circumspection topic, Volkswagen Group had disclosed information on its risk management programs briefly. As a comparison, Mazda had enclosed more information on risk management form _or_ system of gov ernment, action guidelines, and methods of implementing, and the scopes of application.At Compliance topic, Volkswagen had outlined its compliance effort to keep in line with Germane Corporate Governance Code, which is stub 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 draw that help in better understanding of company effort in dealing with management issues and how company boost transparency of management with control panel 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 division to support internal controls.Workplace Practice, Human Rights and Community PracticeAt Society and CSR Projects Worldwide chapter, Volkswagen Group had covered three ethic issues h ere, which are Workplace Practice, Human Rights and Community Practice. There are three topics covered, which are employment, pay back and profit sharing system, AUTOUNI institution, Volkswagen way, employee opinion survey, ideal management, training and skills development, demographic swap, 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 include a great information in the same page to explain their measurement and how Mazda achieve the goals.Environmental Protection and SustainabilityIn terms of environmental protection a nd 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 invent 2020 Mid-Term Environmental Plan and clear info within the topic that help in understanding the topic. Both companies had covered good information on how they promote in climate protection, and the coverage are CO2 emissions reduction for automobile, energy supply strategy, environment factory, good production, environmental technology, green IT, and green logistics. set back 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 Effici entRecycling and Resource ConservationBiodiversityManagement and Reduction of substancesWaterPreventing Air and Water PollutionThis 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 spectacular 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 carry company sympathies and condolences message. The paragraph explained how company makes a concerted effort to tack their ethical strategies, and deploy response plan into action to contribute in recovery for the areas affected by earthquake. The detai ls of support activities for the recovery of smitten regions have presented in this formal report. The report also reveals the damage to Mazda chemical group that Hiroshima Plant and Hofu Plant where forced to suspend operations temporary receivable to inability to obtain certain parts, and Mazda moved to weekly days transfer from Saturday and Sunday to Thursday and Friday during the summer period 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 coalition (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 Str ategy 2011-14 (European Trade Union Confederation ETUC, 2011) and structure the table of contents in these areas of Strategy, Economy, Society, 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 Stock 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 accountin g. To what extend the reporting of two companies conforms to and contributes to the best practice. The eight issues are Inclusivity, Comparability, Completeness, ontogenesis, Management policies and systems, Disclosure, External verification, and consecutive Improvement.InclusivityAAAComparabilityAAACompletenessAAAEvolutionAAAManagement policies and systemsAAAExternal verificationAAAContinuous ImprovementAAATHE EXTENT TO WHICH IT WOULD BE APPROPRIATE FOR THE TWO COMPANIES TO consumption 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. nevertheless 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 helpful for reader to navigate the report, finding specific information, and easier to compare selective information 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 discipline indexes.However as per Crane Matten (2010, p. 219) recognized that there is an issue with GRI which GRI has been criticized is its precaution only with establishing procedures for voluntary reporting, rather than having an explicit aim 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 people to determine its own data according to rules of its own choosing, and there is no act or penalty at all.The new GRI fourth genesis 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 watercourse guidelines that could possibility encourage companies to use a standardized approach.THE RECOMMENDATIONS ABOUT HOW all(prenominal) OF THE REPORTS COULD BE IMPROVED AND WHYGRI Content IndexMazda Corporation could improve their sustainability report by including a comparative table with GRI content indexes 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 r eference newspaper column that contains page number can be confused to some readers and cleverness be pointing to the wrong topic. The comparative table with GRI content index could provides an objective to measure whether all the elements in GRI guidelines have been applied in the report. It is decidedly 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) circumstanceGRI ContentVolkswagen GroupMazda CorporationStrategy and Analysis1.1Statement from the most senior decision maker-Responsibilities increase with commercial success (Page 6-7)-Top contentedness (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 pen2.1Name of the organizationPage 1, 3Pa ge 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 development 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, bounce back, 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 preserve 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 glasshouse gas emissions and social responsibilities.As well as helping organizations manage their impacts, sustainability reporting promotes transparency and accountability. This is because an organization 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 projection conditions in factories. Performance can be monitored year on year or can be compared to other similar organizations.(2704 words)(References/bibliography on the next page)