GS4 · 10 marks · 150 words

For effective corporate governance to take place in the coming years, why is it important to integrate the ESG (Environmental, Social, and Governance) metrics with the multi-stakeholder approach? What benefits can be accrued by such integration?

Answered by 3 toppers · CSE 2023–2024

Corporate GovernanceDimensions of Ethics

Syllabus: Public/Civil service values and Ethics in Public administration: Status and problems; ethical concerns and dilemmas in government and private institutions; laws, rules, regulations and conscience as sources of ethical guidance; accountability and ethical governance; strengthening of ethical and moral values in governance; ethical issues in international relations and funding; corporate governance.

How toppers approached it

From all 3 answers · about 150 words · 100% drew a diagram.

Opening

  • A definition2 of 3
  • No separate opening1 of 3

Body

  • Points2 of 3
  • Points and prose1 of 3

Close

  • A way forward2 of 3
  • No separate close1 of 3

The toppers’ answers

Aditya SrivastavaAIR 1 · CSE 2023 · 145 wordsTheir whole copy

Opening

Corporate ethics are governed by the values of 3Ps - People, Planet, profitability.

Body · points and prose

Diagram
- A Venn diagram with three intersecting circles labelled People, Planet, and Profit. - The intersection of all three is labelled "Corporate ethics."

Need for ESG metrics

  1. Current corporate governance has social issues as -
  • Using man as means
    • Eg: Hire & fire culture
  • No responsibility to society
    • Eg: Punjab Maharashtra Bank fraud.
  1. Governance issues
  • Money as ends in itself
    • Eg: ICICI Bank fraud, Yes Bank.
  • Stifling level play field via monopoly. Eg: Google fined 1330 crore.
  1. Environmental Issues
  • Exploitation of environment.
    • Eg: Kanpur tanneries - chromium pollution in Ganga.

All this calls for multistakeholder approach as

  1. Environment as equal stakeholder
  • → Eg: polluter pays principle (Plastics)
  1. Society as stakeholder
  • → Eg: Tata MANSI proposal
    • → improve IMR, MMR
  1. Corporate social responsibility reforms → make more targetted.
Diagram
Benefits from this: - uphold corporate citizenship - uphold Gandhian trusteeship - commerce with morality - Benefits → social capital - ecocentricism → sustainable growth & profit

Close

This would make the Corporates lead to [compassionate capitalism]

More on Corporate Governance

Ethics in the private sector: boards and disclosure, corporate social responsibility, regulatory capture, business and society.

All GS4 questions on Corporate Governance