II.
Strategic Management of Stakeholder Relationship
1. What is Strategy?
2. Stakeholder Theory
3. Strategic Corporate Social Responsibility
Core or critical parts of a strategic CSR framework
4. Success Indicators
Alignment of CSR with business strategy
Leadership
Employee engagement
Collaboration
Communication
Value creation
Elaboration: Mini Case Study
“The Ideal Partner”
Scentimental Inc., a Filipino SME owned by Mrs. Jin Balmadres, has been in operations
for over 20 years. She takes pride in supporting the local manufacturing industry with her design
creativity. Given their success in the retail and wholesale of décor products with retail giants SM
and All Home, as CEO, Mrs. Balmadres has intermittently supported certain charities over the
years. But she felt that the efforts of her company in this area were wanting. Moved by the much
– needed relief for the residents affected by the Taal Volcano explosion in early 2020, she was
advised by her management consultant to work with a foundation. She did some research on
her own on various potential partners. She found that she can either go directly to her desired
beneficiaries, work with an established foundation, or through an intermediary. She decided to
follow her consultant’s advice and work with a foundation. She had her secretary set up an
appointment with her chosen foundation the following week.
Reflection: Questions for discussion
1. What are some of the questions that the CEO needs to clarify with her chosen partner in
their initial meeting?
2. How can the CEO be assured that her contribution / donation will be put to fair use?
Clarify how she can demand accountability from the foundation.
3. Explain some ways on how she can monitor and / or ensure the effectiveness of her
CSR initiatives.
4. Should she require her employees to engage in the activities spearheaded by the
foundation?
Action: Strategy on Doing Good
You are inheriting your parent’s business of a Level 2 private hospital in the province of
Quezon. After years of working in a tertiary public hospital as one of its resident consultants,
you are now faced with two aspects of hospital work when you officially take over your family
business: (1) providing public service as a hospital, and (2) ensuring sustainable revenues in
the coming years. Create a strategic CSR with the following guidelines:
1. Review the vision / mission statement. Assess the dynamics of the industry including the
internal and external stakeholders of the business environment within which it is
operating.
2. Formulate a CSR strategy that aligns both business and social responsibilities by
considering operational and CSR processes.
3. Implement these strategies by identifying specific initiatives and programs, and how
these will be operationalized.
4. Monitor and evaluate the implementation based on the identified objectives of the CSR
initiatives and / or programs by providing metrics.
Prepare a framework to help illustrate this plan of yours to your retiring parents.
III. Corporate Governance
1. Philippine Corporate Governance
2. Governance and Management
3. Key Players in Corporate Governance
CEO
Chairman of the Board
Board of Directors
Shareholders
Stakeholders
4. Theoretical Perspectives
Agency Theory
Stewardship Theory
Resource Dependency Theory
Stakeholder Theory
5. Approaches to Corporate Governance
Functions of the Board
Membership of the Board
Politics in the Board
Importance of Committees
a. Audit Committee
b. Remuneration Committee
c. Nomination Committee
Toward an Effective Working Board
Board Evaluation
Family Governance
Ethical Stewardship
Action: Critical Analysis
As a potential future member of the board of a publicly listed company, you would need
to objectively assess the company’s corporate governance practices for you to ensure and
possibly improve best practices.
Thirty years from now, you are sitting as an independence director of a listed company,
and as the chair of the newly formed governance committee, your task is to perform a review
and audit of the company’s government practices.
Choose any one listed company from the Philippine Stock Exchange. Make use of the
Organization for Economic Cooperation and Development (OECD) principles as a guide to
perform the audit, and any recommendations for improvement should be part of your slide
presentation to the chairman of the board. The report must be professionally presented. Be
concise, clear, and coherent.
IV. Legal, Regulatory, and Political Issues
1. Regulation
2. The Rationale for Regulation
Free Market
3. Laws, Codes, and Regulations
Sarbanes and Oxley Act (SOX)
Organization for Economic Cooperation and Development (OECD)
a. G20 / OECD Principles (2015)
4. Philippine Corporation Code
5. Philippine Code of Corporate Governance
6. Company Codes
7. Political Issues and Corporate Governance
Elaboration: Mini Case Study
“A Matter of Structure”
Solace Hotel is a three – star hotel in Makati City, owned and operated by Amsamm
Property and Development Inc. The CEO, Miss Mylene Co, has been in the garment / retail /
trading sector for over 30 years. Although Ms. Co’s various businesses are privately owned, she
has been an advocate of good governance and is very active in community service through her
CSR initiatives. She established her hotel four years ago and felt that she needed to review and
improve her board structure. Currently, she has the following in place: (1) Board of Directors; (2)
Certification of incorporation and other documentary requirements; (3) code of conduct; (4)
company bylaws; (5) SEC filings; and (6) audited financial statements. The hotel currently has
no corporate governance guidelines in place. She currently has five executive directors, four of
which are family members, and one executive manager. Her desire to include an outside
independent director is under study by the board.
Reflection: Question for discussion
1. Is the company (Solace Hotel) required to have an independent director sit on the
board? Do they need one?
2. What can you suggest to the CEO to improve the existing corporate governance
practices?
3. Should the board have a set of corporate governance guidelines such as direction
selection, director responsibilities, compensation, and others?
Action: Compare and Assess
You are assigned to teach Corporate Governance in the university that you are
connected with. The topic to be discussed in your next lecture session is corporate governance
around the world. Using the internet to do your research and using some textbooks on
Corporate Governance, come up with a slide presentation of the various corporate governance
codes from different countries (China, UK, USA, Japan, and Philippines). Compare and contrast
the codes.
