Topic 20 Corporate Social Responsibility & Ethics

There is information for charities if you do a full search. For example these are extracts from the 2016 and 2018 annual reports: CHARITABLE AND POLITICAL DONATIONS "During the year, the Group made charitable cash donations of £5,000 (2015: £117,000) in the UK. No political donations were made (2015: nil). There have been a number of further donations of sporting equipment made to worthy causes, and these are set out on page 33" (2016) "During the year, the Group made charitable donations of £66k (2017: £117k) in the UK. No political donations were made (2017: nil). There have been a number of further donations of sporting equipment made to worthy causes." (2018) The equipment mentioned would of course have been at cost and therefore unlikely to have run into hundreds of thousands (otherwise the company would be bragging about it) and more than likely it would have been able to have set such costs against revenue for tax purposes. This is not to do SD down, but to point out the facts. For any comparisons when looking at pay it might be significant to look at the detail behind the Remuneration report (remember directors get 'packages' - salaries, bonuses and often advantageous share options so it is the total of the full package that should be compared). With stakeholder groups it depends on the group. You have discussed the working practices at SD so for employees try to find out the impact of those practices on the workforce e.g. motivation, staff turnover etc. You may have to research this using key words in a search engine and annual report. For example on page 56 onwards in the AR 2018 there is quite a bit of useful information and to be be fair to SD and to comply with the T20 title, there have been improvements in some areas, so for a balanced report you may need to show what the position was and how the company may have changed things. For shareholders most of the impact would be how the share price and dividend have been affected. Additionally you should also look for information (in search engines) about the AGMs as sometimes there have been quite lively arguments at these between shareholders and the board (and this in fact has been the case for SD). However this is your report (and it should therefore be you, guided by your own mentor), who should be doing this type of research - it is there if you use the right key words when you search - just don't expect all the information to be conveniently available in one place - it just doesn't work like that!

I think you have misunderstood the reason for showing charitable initiatives to profit "And the charitable initiatives as a ratio to profits was really insignificant like 0.003% etc, so I decided not to add those in the report" That is precisely why you should be showing them - this company iappears not to doing much.with regard to the philanthropical element of Carroll's pyramid. I would also compare those miserly charitable efforts against dividends for the last three years. Obviously your mentor is a Topic 8 devotee !

Yes you can do that - it will be interesting to see if the weak CSR has had a significant impact on revenue and profit

As financial statements are a minor detail for Topic 20 this does not sound credible. It is more likely that a SPREADSHEET showing formulae was not included as that would lead to a fail

Some ideas for appropriate subject companies for a report on CSR The attached link https://www.bbc.co.uk/news/business-47057870 describes several companies as having 'shocking' ethical practices. These include scant regard for sustainability, poor attitude to the environment and cheap labour practices while pursuing policies encouraging repeat purchasing in the 'fast fashion' industry. Amazon also comes in for criticism and is infamous not just for its exploitative working conditions and practices, but also adopts aggressive practices to avoid paying its fair share of tax (which indirectly means it can undercut more ethical and responsible retailers) and thus indirectly is destroying other many retail businesses

"Facebook intentionally and knowingly violated both data privacy and anti-competition laws" "Mark Zuckerberg continually fails to show the levels of leadership and personal responsibility that should be expected from someone who sits at the top of one of the world’s biggest companies" "MPs note that Facebook, in particular, is unwilling to be accountable to regulators around the world: “By choosing not to appear before the Committee and by choosing not to respond personally to any of our invitations, Mark Zuckerberg has shown contempt towards both our Committee and the 'International Grand Committee' involving members from nine legislators from around the world.” These are not my words - they are direct citations from The Digital Culture, Media and Sport Committee of the UK Parliament Report released today. The malpractice demonstrated by the company are now sufficient to fill a book...... and certainly the above together with the Molly Russell case and its lack of ethics overall and avoidance of tax and lack of contrition would make it a great subject organisation for Topic 20

My initial reaction is that you need to plan and work extremely hard at this stage if you are going to get all of the work done in 7 weeks. With Topic 20 you are not analysing all of the financial statements in depth (as you would Topic 8) -the emphasis would normally be on showing a relationship between the bad CSR and profitability, share price and possibly looking at dividends ( possibly with the latter comparing it as a percentage of profits with amounts spent on charitable donations and initiatives). As such I would expect to see trends for the last 3 or last 5 years. I don't see why you can't therefore use the annual report for year end 2018 as it is available (and am actually surprised you only want to go up to Dec 2017). In fact the best RAPs on CSR and corporate governance show up to the minute articles on the companies. I currently have two P38 students submitting on a UK company whose weak corporate governance only came to light in October 2018 (but involves a huge fraud). If you restrict yourself to old data and information you are very unlikely to get a good grade. Note the rule on latest financial statements does not preclude using the most recent -merely that for Topic 8. It was felt by the marking team with that topic and topic 15 it was unreasonable to expect a student with so many ratios to calculate for two companies and research the reasons for those trends not to have the statements publicly available for at least 3 months. However you are not doing Topic 8 and you are not going to be calculating so many ratios nor analysing those trends in the same manner and therefore I would not only expect you to use 2018 but if you don?t use them find it very odd that you ignored 2018 (it would look like 'old work' -some one else's that you had .borrowed') Although some specific CSR incidents may happen in specific years (the refusal to unlock a known terrorist's phone in 2016 ), most of them will be policies and trends over several years (the battery issue). Therefore there is no hard and fast rule about when to start your review of the delinquent CSR practices but roughly from 2013 onwards to the present day should be considered. Remember that you need to go with balance and there are sometimes two sides such as with the terrorist phone https://www.theguardian.com/technology/2016/feb/22/tim-cook-apple-refusal-unlock-iphone-fbi-civil-liberties Although my iPad is more recent than the one referred to this article which is from 2012 I have the same issue and in the last month have lost the use of 2 apps https://www.theguardian.com/technology/2012/jul/04/apple-ipad-software-update So in summary when it comes to years for Topic 17 & 20 there is no real 'cut-off' and although you mention something about September 2018 I would expect a student for example with Apple to have touched upon the following (though they might use a different source) https://m.slashdot.org/story/347559

Dear GillianM, I have been reading through your comments and they are really helpful. I have written the project on Topic 20 and will be submitting in period 40. I have a query as I am a bit confused and there is no clear comments from my mentor. I wanted to clarify from you. I have included the Appendix but have not done any formula calculations. There are roughly 5 bar charts made from the data available through sustainability reports and annual reports. I was not able to include anything else, can you please give me any last minute suggestions as it is my last attempt and I don't want to risk it. Thank you, Aatif

Please do not submit your work until you have consulted Appendix 1 the Assessment Criteria. You will note if you scroll down that your spreadsheet is supposed to clearly demonstrate use of varied formulas. Sometimes with some topics you have to be innovative when trying to think how to use these. Possibilities with Topic 20 might be calculating percentage changes in share price over a set period , calculating the ratio of total amount of charitable donations to dividends paid or the relationship of average worker's pay to CEO's salary and the like. To a point it depends what info is in the financial statements-but you may have to think outside of the box. Try to go for 3 different formulas (percentage, average, sum for example) If you have already submitted (sorry only just read your query) contact [email protected] and send your updated spreadsheet because on the basis of it not having used varied formulas it will be a technical fail and you will have wasted GBP 380. You will need to send your new sheet before the submission window closes.

Thank you for your detailed reply. Unfortunately I had already submitted my project. I should have been told by my mentor for this and I even reminded him like 10 times that should I be entering some formulas but my mentor was like you are writing on Topic 20 and there is no relevancy of it. I’m wondering to add some formulas as you mentioned but just curious that they don’t mix it with my previous Appendix. I had only used one formula which was net profit ratio. Secondly, if I add some formulas but there is no direct mention of it in my research like share dividend, will it be okay? Really appreciate your response.

I just checked that I have used 2 formulas, one is related to percentage and the other one is net profit ratio calculation. Do you still suggest to update it?

It depends what is on your actual spreadsheet. They must be able to see the formulae there and the requirements are for varied formulae. I usually recommend at least 3 but also a graph or two. Send your updated soreadsheet attached to an email before the submission closes and say you have discovered that you uploaded the wrong spreadsheet file and hopefully you will be ok then. Good luck!

Thank you Gillian for your input. I have used 5 graphs and 2 formulas in total. I think I’ll just add one more formula for safe side and send it through email. Thanks, Aatif

My topic is 20 and my company has restated their annual report each year because the company sold subsidiary. if the subsidiary is sold, they restated the previous years figures by showing the business under disconnected operation in the latest annual report as if the subsidiary was disconnected from the previous year. for non financial data they excluded the disposed subsidiary results from the latest annual report and also restates the previous year report. In this situation which data i should select?? the restated one or the actual data from the particular year??