Week 4:
Presenter 1:
Rita Kalaydjian
Is it sufficient for corporations to comply with regulations and law?
Firstly, the meaning of compliance is doing what is required to be done, as for corporations to comply with laws and regulations it’s important, but there is something important that has to be mentioned, in accordance to Dunphy, Griffiths & Benn (2007) there is difference between spirit and letter law. Spirit of the law is being ethical from inside, such as knowing what is right and what is wrong to do, whilst letter of the law is obeying the law as it’s written. It is important for a corporation to comply with law and regulations in order to achieve efficiency and sustainability. However, complying with rules and regulations is not sufficient by itself to a corporation seeking sustainability. There are sets of principles and codes that a corporation should obey, such as adopting codes of environmentally friendly policies. However, knowing the codes and policies is not enough, as there are four major drawbacks of company codes which are firstly, when corporate codes do not specify limits of its responsibility, secondly, incompleteness such as corporations that ignore some important rules that enhances its image and reputation for example employing child labor, thirdly, lack of information in accordance to how to implement the codes that are set, finally, lack of internal monitoring whether these policies are complied or not, and training new employees. Law and regulation is not enough by itself because the scandal associated with the financial collapse of Enron in the United States shows that there are important elements such as reputation, communications, disclosure, transparency and trust are interrelated issues for organizations. Another important thing is implementing CSR programs that enhance the image and reputation of the corporation.
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