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CSR for G4S Plc

CSR for G4S Plc

CSR for G4S Plc

CSR and Corporate Governance

Corporate organizations in the modern world have been increasingly characterized by the extension of their operations beyond the economic contest to ethics, legal, and philanthropic roles in the communities where they operate (Morrison, 2016). Utilitarianism argues that business activities in the modern world are much guided by the consequentialist principle under which the righteousness or wrongness of their endeavors is dependent on their outcomes. Business organizations, therefore, adopt different forms of corporate social responsibility for various purposes such as giving back to the community or search for competitive advantages through increased publicity. The involvement of a company in corporate social responsibility is a function of many forces, including the stakeholders and corporate governance of an organization. According to Carroll (2016), CSR can be broken down into four cadres which can be graphed in a pyramid to demonstrate the economic, legal, ethical, and philanthropic responsibilities of a business organization. This paper will examine the concept of corporate governance and the duties of directors to the stakeholders, and apply Archie Carroll’s model to explain the corporate social responsibility for G4S Plc.

Corporate governance is a dynamic concept used to explain the various ways through which companies are managed, controlled, and directed. Corporate governance is the sole duty of a company’s board of directors. The directors of a company are mandated to direct and control all the corporate affairs of the companies in the best interests of the stakeholders. Among the primary roles through which the board of directors protects the interests of the shareholders is the delegation of management. They are tasked with the selection, compensation, and appraisal of the CEO to ensure that the company operates smoothly and profitably. Also, it establishes the strategic objectives and structures to be followed to achieve such goals. Overall, the primary role of the board of directors to the stakeholders is envisioning, controlling, and directing the company’s affairs in a bid to achieve prosperity in the best interests of the stakeholders.

Four Areas that Makeup CSR according to Archie Carroll

Corporate social responsibility is made up of four distinct areas, including economic, legal, ethical, and philanthropic obligations; all of which are permeated by ethics. The economic responsibility at the base of the pyramid implies that it is the essential requirement of any commercial enterprise (Carroll, 2016). It refers to the fact that businesses are required by society to generate sufficient profits that can be utilized to meet the expectations of the community as well as other companies. It implies that the foundation of CSR is economic soundness and business sustainability. The business is also expected to abide by all current legal requirements because they are integrated into the operations of the civil society (Carroll, 2016). A company ought to operate ethically; therefore, business organizations are expected to act rightfully, justly, and fairly in a bid to reduce any chances of harming any stakeholders with whom they interact. At the peak of the peak is the expectation by society for the business to exhibit good corporate citizenship. At that level, the entire community in which the business operates expects substantial benefits from the company; through which it gives back to the society (Carroll, 2016). The business is, therefore, expected to offer financial, physical, and other types of resources to the community as a way of exhibiting its good citizenship attributes. The CSR pyramid can be demonstrated as show in Figure 1:

Figure 1: The CSR pyramid (Carroll, 2016)

Application of the Model to G4S Plc

According to Carroll (2016), the basis of CSR for any business is the attainment of sustainable economic success through profitability that can be utilized to support the whole edifice. G4S has continuously met its economic responsibilities regarding CSR by generating and reporting substantial profits year after year (G4S Plc, 2019). The company, for instance, reported annual net profits of £233 million for the year ended in December 2017 and £90 million for the year ended in December 2018 (G4S Plc, 2019). Despite the decline in the net profits after tax, the company maintained reasonable gains by avoiding falling into losses. It is also evident that the company’s revenues for 2017 and 2018 were £7.8 and £7.5 billion respectively. Overall, the company has demonstrated economic sustainability and business sustainability through the profits generated. Its economic sustainability is also justified by the increase in its total assets from £5.4 billion in 2017 to £5.5 billion in 2018 (G4S Plc, 2019).

Carroll (2016) argues that business organizations must also meet their legal responsibilities. G4S Plc has continuously demonstrated substantial compliance with the full range of legal frameworks in the different global markets where they operate. The company has maintained careful risk mitigation strategies to avert the risk of entering into onerous contracts that could plunge the company into legal consequences (G4S Plc, 2019). The company also operates a legal department that closely monitors any variations in foreign ownership laws in a bid to ensure plan for appropriate adjustments. Also, the group maintains constant liaison with various governments and authorities to derive an appropriate understanding of the regulatory environments in which they operate (G4S Plc, 2019).

The third level of CSR for companies covers the ethical responsibilities of an entity in the society where it operates. G4S is expected to operate in the right manner devoid of harm to any member of the community (Carroll, 2016). The company’s commitment to ethical responsibilities is supported by the fact that it does not deal with any harmful commodities such as chemicals. The firm is committed to the provision of a wide range of services, including security and data. Also, the company’s commitment to ethics is reinforced by its values, including integrity, respect, safety, and security. It also does not condone such vices as bribery and corruption (G4S Plc, 2019). The company operates an anonymous reporting system called Speak Out to facilitate reporting of any ethical concerns as a way of increasing its ethical compliance. It also participates in the reduction of greenhouse emissions by following the WBCSD and WRI Greenhouse Gas Protocol to gauge their Scope one and two emissions in all operations.

The company is expected to exhibit good corporate citizenship by committing substantial financial and non-financial resources to society (Carroll, 2016). The company achieves the objective by participating in different community initiatives for economic and social benefits (G4S Plc, 2019). Its CSR activities in this perspective are centered on health and safety, human rights, and anti-bribery and corruption. The company conducts regular audits and training in different communities across the world to ensure that the members of society are aware of their rights and how to deal with any threat to the same.

References

Carroll, A. (2016). Carroll’s pyramid of CSR: taking another look. International Journal Of Corporate Social Responsibility1(1). doi: 10.1186/s40991-016-0004-6

G4S Plc. (2019). Integrated Report and Accounts 2018. New York: G4S. Retrieved from https://integratedreport.g4s.com/documents/G4S038-Full-Report.pdf

Morrison, J. (2016). The global business environment (4th ed.). London: Macmillan.

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