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8/14/2019 Coorporate Social -Davani
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CORPORATE SOCIALRESPONSIBILITY IN
GLOBALIZATION
Dr.Gholamhossein Davani
Chairman of Dayarayan Auditing &Financial Services Firm))RSMi Iran
Member of High council of Iranian association of Certified)Public Accountants )IACPA
IMA,IIA,AAA,BAA,EAA,CAAA,AIA,CFE
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Ladies & Gentlemen.
I am very glad to have the opportunity tospeak at this conference, as it gives me the
chance to stress the importance of the
corporate social responsibility inglobalization.
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Population=6,525,000,000
GDP= $43,920,000,000,000
Oil Product= 79,650,000 )BBI/day
Oil proved reserve )BBI= 1,349,000,000,000
Purchasing Power Party )PPP= $ 59,590,000,000,000
Export= $ 10,320,000,000,000
Import= $ 10,270,000,000,000
Labor Force )Person= 3,001,000,000
Oil Consumption )BBI/Day= 80,100,000
Internet users= 1,018,057,389
Telephone- mobile cells= 1,752,183,600
Debt-external= $38,540,000,000,000
Natural Gas- Proved reserves )Cu-m= 174,600,000,000,000
Natural Gas-Export )Cu-m= 667,600,000,000
Daily transaction= S 1,300,000,000,000 )60 times of industrial goods
CHIP= Clearing House Inter-banks Payment System Every Minutes 2 B.US
Every day = $1,000,000,000,000Daily transaction= $ 1.300.000.000.000 )60 times of industrial goods
CHIP= Cleaning house inter banks payment system every minutes 2 B. US Dollars
Everyday= $ 1.000.000.000.000
World at a glance 2006
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Telephone
1,206,315,500Internet users
1,018,057,389
Airplane
49,024
Roadway
32,345,165KM
Railway
11,115,205KMWorlds import
10,270
Billion USD
World export
Billion USD 10,320
Gas Proved Reserve
)Cu-m 174,600,000,000,000
Gas Import
828,000
)Cu-m
Gas Exports
667,600,000,000
)Cu-m
Gas- consumption
)Cu-m 2,820
Oil- proved reserve
)BBI 1,349,000,000,000
Oil production
)BBI/day 79,650,000
Oil Consumption
80,100,000
)BBI/day
Oil export
7,920,000
Bbi/day
Labour force
3,100,000,000
Mobile cell
1,752,183,600
World at a glance 2006
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Outlook of world 2006
835,000,000,000
26,620,000,000,000
2,350,000,000,000
12,770,000,000
589,000,000,000
279,100,000,000,000
39,640,000,000
5,451,000,000,000
7,335,000,000
172,200,000,000,000
Gas reserve
5,600,000,0002,450,000758,0001,0953,6693,40077720India
135,500,001,510,0003,979,000685528,10055178Iran
16,100,000,0006,534,0003,631,0001,3138,1826,3007521,790China
144,300,0001,977,00077,690621,82230,0004432,067France
4,500,000,0001,827,0002,075,000601,86930,9003272,218UK
39,600,0002,650,000167,400822,45429,8001,0162,747Germany
29,290,0005,353,000120,6001273,91430,7005504,848Japan
22,450,00020,730,0007,610,00029812,41042,00092712,470USA
7,335,000,00014,700,0003,172,00048612,180454351,31813,310Euro
1,326,000,000,00082,590,00083,000,0006,52559,59047,76610,32043,920World
Oil reserveOil BBI/DayOil product
BBI/DayPopulation
GDP
Purchase
per
capital
GDP
Percent
Current price
Export
Billion
GDP
Official rate
Billion
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World Military expenses 2006
4/3Iran
19India
35Germany
42UK
44Japan
45France
81China
518USA
Source: CIA Fact book 2006
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6,30028,10042,000---$ GDP )Per capital PPP
1,79013,31012,47043,920)$ GDP)Billion
7521,31892710,320)$ Export)Billion
ChinaEUUSAWorldDescription
Big world economic 2006
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What is Globalization
Globalization as a decoupling of space and
time, emphasizing that with instantaneouscommunications, knowledge and culture
can be shared around the world
simultaneously. Sociologist, Anthony Giddiness
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)Global village )one world list
Global village is a term coined byWyndham lewis
in his bookAmerica and comic man )1948 butHerbert Marshall Mcluhan )1911-1980. Also
wrote about this term in his bookThe making of
typographic Man) )1962
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Globalization is an umbrella term which refersto complex of economic, trade, social,technological, culture and political.
Global village idea is Electronicinterdependence when electronic media
replace visual culture.
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)Elements of Global village )one-wordlist
Convergence
UniformityHomogenization
Hyper-liberalism
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The History of Globalization
Globalization is an historical process that began
with the first movement of people out of Africa intoother parts of the world. Traveling short, then longer
distances, migrants, merchants, and others have
always taken their ideas, customs, and products into
new lands. The melding, borrowing, and adaptationof outside influences can be found in many areas of
human life.
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World Great Transformation
Fire Discover
Invention of Gun Invention of Printing Invention of Machine Invention of Computer Invention of InternetVirtual Organization
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Arising New Globalization
Globalization is a process
that has been going on forthe past 5000 years, but it
has significantly
accelerated since thedemise of the Soviet Union
in 1991.
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Timeline of GlobalizationAge of Imperialism-1900
Great Depression- 1929
World Economic Forum )WEF-1971
1986-Dwellers landGeneral Agreement on Tariffs and Trade )GATT-1986
Montreal Protocol-1987
Fall of Berlin Wall-1989
Collapse of Soviet Union-1990
Union European-1992
Un World Conference on Human Rights-1993
North American Free Trade Agreement )NAFTA-1994
World Trade Organization )WTO-1995
International criminal court-1998
Euro adapted 12 countries -2002
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Effects of Globalization
E-governance
E-trade E-bank
E-learning
E-)Virtual Organization
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Year 2000:
30 trillion 5 billion people 20% global GDP
Year 2050:
140 trillion 8 billion people 40% global GDP
)assuming 3.5% growth
)Global Gross Domestic Product )GDP
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New world Discipline
The fall of the Berlin Wall and the
collapse of the Soviet Union ended the
cold war between the forces of capitalismand socialism with capitalism
triumphant. The development of the
internet made possible the organizationof business on a global scale with greater
facility than ever before.
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Importance of Ethics
There is no such thing as business
ethics.Theres just ethics; and we all
have to practice them every day in
everything we do.
Peter Drucker
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Social ResponsibilityThe currency and general relevance of socialresponsibility and sustainable development)SR/SD to society is seen in such areas asinvestor interest in ethical mutual funds,government lists of threatened or endangeredspecies, and pollution control mandatesestablished by public policy setters. Indeed,
business, government, and society are caughtup in a debate over how this planets scarceresources are to be preserved and used.
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What are SR/SDThese are voluntary initiatives with a global
constituency that can also be defined as multi-sect
oral, in that they can be applied in a wide range ofindustries. They have all evolved through social
partnerships involving some elements of business,
governments, labor organizations and non-
government organizations. They all take a multi-stakeholder approach to corporate citizenship
issues.
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Elements of Social responsibility Community
Diversity
Environment
Ethics
Financial Responsibility
Human Rights
Safety
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Timeline of Corporate Governance The Cad bury Report )1992, UK Green bury Report )1995 , UK Hampel Report )1998, UK The Smith Report )2003, UK The Higgs Review )2003, UK The Company Law White Paper )2002 Sarbanes- Oxley Act 2002 USA
The Tyson report on the Recruitment Development of Non-Executive Directors )2003 The European Commissions Action Plan for
Company Law and Corporate Governance )2003
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Corporate GovernanceThe good corporate governance needs to address
not only boards of directors, committees, and legal
and regulatory issues, but also business practicesand ethics, disclosures and transparency,
enterprise risk management, monitoring, and
communication. That it's a whole set of systems
and processes.It's not just narrowly focused on compliance with
Sarbanes-Oxley.
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Accountability
The objective of accountability towardsstakeholders requires information about
general issues such as product safety, theenvironment, employee relations, etc. Anethical bookkeeping system collects datasystematically about the organization's ethicalbehavior, which is relevant for stakeholders.
This process is most likely to include "hard"information, including for instance complaintsof stakeholders, business accidents or fines forunethical behavior .
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Different Roles in Accountability &
Corporate Governance
Role of chief of the board
Role of audit committee Role of non-Executive managers Role of internal audit Role of shareholders annual meeting Role of Human resources Role of transparency
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Traditional view of business strategy
and Social Responsibility
Industry
Structure
Resources
Corporate values
and ideology
Stakeholders
Business Strategy
Social
Responsibility
Competitive
Advantage
Social
Performance
Financial
Performance
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Integrated view of business and
social strategy
Industry
Structure
Resources
Corporate values
and ideology
Stakeholders
Business StrategyCompetitive
Advantage
Financial
Performance
Social
ResponsibilitySocial
Performance
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Sustainability
Sustainable development is a
very simple idea. It is aboutensuring a better quality of lifefor everyone, now and forgenerations to come.
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Sustainable Company
The systems and processes of corporate governance alsoshould consider a diverse group of stakeholders, notsolely shareholders. "Most corporate governancefocuses just on shareholders. But a shareholder'sinterest is different than an employee's interest, whichis different than the interest of a community, creditor,or supplier. And too often, the focus of shareholders,management, and everyone else in the company is on
.increasing shareholder valueFurthermore, this responsibility is often on the backs ofthe community or the employees or the suppliers, and.that is not in their interest
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History of Global Reporting
The Global Reporting Initiative )GRI was conceivedin 1997 by the Boston-based Coalition on
Environmentally Responsible Economies )CERES incollaboration with the Tells Institute. Over the pastfive years, the GRI has evolved into a set of reportingcriteria on all aspects of a companys performance.The initial draft standard was field-tested in 1999
by over 20 companies and released in June 2000. Arevision was published in 2002.
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It is possible for standards to have
:several of these characteristics
Principles )Global Compact and Global Sullivan Principles
Standards )GRI, OECD Guidelines, SA8000, AA1000S, and ILO Conventions
Foundation )ILO Conventions, AA1000S
Process )SA8000, AA1000S, ISO 14000S
Performance )SA8000, OECD Guidelines, and ILO Conventions
Certification )SA8000 and ISO 14000 Series
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SA/CSRAfter Enron Clops some terminologies sameSocial audit )SA, corporate socialresponsibility )CSR have been relief. These
days, corporate social responsibility )CSR iscommon currency but a currency that israther devalued. The phrase is so over- andpoorly used that it begins to lose any meaning.Any proper definition of CSR would require a
categorical standard of values. This is lacking.In fact CSR now means many different thingsto many people.
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Social ResponsibilityIn the globalization area auditors'
responsibilities have changed to corporate social
responsibility that main basic is related toEthics. Although many auditors are burning the
midnight oil to familiarize themselves with the
new regulations and to prepare for their role in
the compliance process, the scope andcomplexity of change has made the learning
process a significant challenge.
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)Global Reporting Initiative )GRI
P= M E )i
P= Share price/market capM= Multiple
E= earning per share
i= Social / Environment
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Elements of social responsibilities &
sustainable development
International Labor Organization )ILO
UN Declaration on the right of the childSex Discrimination in employmentHuman RightEnvironment Protocol
Social Security
Commerce Code & Fair competitor
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New responsibilities of Managements
Social Responsibility
Sustainable developmentCorporate GovernanceBusiness Ethics
Sustainable developmentTransparencyAccountability
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Labour law
Social Security Law
Tax act
Commerce Law
Environment LawStock Exchange regulation
General account office )GAO
Iranian managements legal responsibility
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:Iran Corporate Governance Include
Partner Rotation-Transition Questions
Non-audit Services Audit Committee Pre-approval Audit Committee Communications
Full Disclosures "Cooling Off" Period
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Yearly World Stock Value Exchange Transaction
41,000
31,000
26,000
7,900
2005
2003
2000
1990
$ Amount: Billion
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Stock Exchange 2006$ Amount: Billion
38Tehran Stock Exchange
1,701TSX
1,715Hong Kong
3,708Euro next
1,212Swiss
1,323Spain
1,638Germany
3,715London
4,614Tokyo
15,451New York
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Tehran Stock Exchange at a glance
2451921611331161159697/3Gross Domestic Product )GDP
Billion USD
435432426383334318307129Companies Listed
37,61535,47235,47033,62512,7878,4466,784267Market value
Million USD
078 ,109,46012,11311,3805,0623,7582,978472Index Shares prices
20062005200420032002200120001991Description
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Sources1- Auditors responsibility on globalization PPT Gh. Davani.2006
2- Stockholder Engagement standard, Institute of Social & Ethical
accountability.
3- GRI and the transparency imperative, why GRI, global reporting
initiative.
4- Living corporate citizenship by persons education Ltd.
http://www.business-minds.com
5- Corporate social responsibility & the global Sullivan principle.
6- Ethics after Enron: PPT. Where are we, and where are we going,
University of San Diego 2003.7- The world fact book www.cia.gov
8- IMF- www.imf.org
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