Definition of Corporate Governance: How It Operates, Principles, and Examples

Corporate Governance: What Is It?

Corporate governance refers to the set of guidelines, customs, and procedures that regulate and control a business. Corporate governance generally entails striking a balance between the needs of all of a company’s various stakeholders, including shareholders, senior management, clients, suppliers, financiers, the government, and the local community.

Corporate governance, which includes almost every aspect of management from action plans and internal controls to performance assessment and corporate transparency, serves as the framework for achieving a company’s goals.

KEY LESSONS

Corporate governance is the framework of guidelines, procedures, and management techniques used to guide and oversee an organization.
The main factor affecting corporate governance is the board of directors of a corporation.
A company’s operations and ultimate profitability may be called into question by poor corporate governance.
Environmental awareness, moral behavior, business strategy, pay, and risk management are all aspects of corporate governance.
Accountability, openness, fairness, responsibility, and risk management are the fundamental tenets of corporate governance.

Knowledge of corporate governance

Specific rules, regulations, policies, and resolutions put in place to guide business behavior are referred to as the “governance framework.” In governance, a board of directors is essential. Shareholders and proxy advisors are significant stakeholders with influence over governance.

An important aspect of community and investor relations is communicating a company’s corporate governance. For instance, the investor relations page of Apple Inc. describes its corporate management (its executive team and board of directors). It offers information on corporate governance, such as committee charters and governance papers, including bylaws, rules for stock ownership, and articles of incorporation.

The majority of businesses aim for excellent corporate governance. Simply being profitable is not sufficient for many shareholders. Additionally, it must exhibit excellent corporate citizenship through a commitment to the environment, moral conduct, and effective corporate governance.

Corporate Governance’s Advantages

Transparent norms and controls are established by good corporate governance, and the interests of shareholders, directors, management, and staff are all aligned.
It promotes trust among citizens, investors, and public servants.
Corporate governance may give stakeholders and investors a clear picture of a company’s direction and moral character.
Long-term financial viability, opportunity, and returns are encouraged.
It might make capital-raising easier.
A rise in share prices can be attributed to good corporate governance.
The likelihood of financial loss, waste, hazards, and corruption may be reduced.
It is a strategy for resiliency and sustained achievement.

Directors’ Board and Corporate Governance

The most direct stakeholder influencing corporate governance is the board of directors. Directors are chosen by the board of directors or by the shareholders. They speak for the company’s stockholders.

Important choices, including executive salary, dividend policy, and the nomination of corporate officers, are up to the board.

In certain circumstances, such as when shareholder votes demand certain social or environmental concerns be addressed, a board’s tasks go beyond financial optimization.

Insiders and independent members are frequently found on boards. Major shareholders, founders, and executives are considered insiders. The connections that insiders have are not shared by independent directors. They are picked based on their prior expertise leading or managing other sizable corporations. Independents are regarded as being beneficial to governance since they help balance shareholder interests with insiders’ interests and reduce the concentration of power.

The board of directors must make sure that corporate strategy, risk management, accountability, transparency, and ethical business practices are all incorporated into the company’s corporate governance policies.

The Corporate Governance Principles

Although there are no restrictions on the number of guiding principles that can exist, some of the more well-known ones are as follows:

Fairness

The board of directors must treat all stakeholders fairly and equally, including shareholders, employees, suppliers, and communities.

Transparency

The board should notify shareholders and other stakeholders in a timely, accurate, and understandable manner about items like financial performance, conflicts of interest, and hazards.

Management of risk

The board and management must decide how to appropriately control risks of all kinds. To manage them, they must follow their advice. The presence and status of hazards must be communicated to all pertinent parties.

Responsibility

The board is in charge of regulating business affairs and managerial actions. It must be informed about and committed to the company’s successful, ongoing performance. Its duties include finding and appointing a CEO. It must operate in a company’s and its stockholders’ best interests.

Accountability

The objectives of a company’s operations and the outcomes of its behavior must be disclosed by the board. It is responsible for evaluating a firm’s capability, potential, and performance, along with the company’s leadership. It must let stockholders know about important matters.

Models of corporate governance

Anglo-American Style

The shareholder approach, the stewardship model, and the political model are only a few variations on this model. The shareholder model, however, is the main model.

Under the shareholder model, the shareholders and board of directors are in charge. Despite being acknowledged, stakeholders like suppliers and employees have no control.

It is the responsibility of management to conduct the business in a way that maximizes shareholder interest. Importantly, the right incentives must be made available in order to match management behavior with shareholder or owner interests.

The model takes into account the reality that shareholders support the company financially but have the option to stop doing so if they are unhappy. This can maintain management’s effectiveness and efficiency.

Both insiders and independent members should be on the board. Despite the fact that the CEO and board chairman have traditionally been the same person, this approach aims to have two different people fill both positions.

The board, company management, and shareholders must stay in constant communication for this corporate governance model to succeed. The attention of the shareholders is drawn to important issues. Shareholders are asked to vote on important choices that need to be made.

The regulatory agencies in the United States frequently favor shareholders over boards and top management.

The Continental Model

Under the Continental Model, two groups stand in for the governing body. They are the management board and the supervisory board.

The management board in this two-tiered structure is made up of employees, including executives, who work for the company. Outsiders from the community, such as stockholders and union representatives, make up the supervisory board. Representatives from banks with ownership interests in a corporation may also sit on the supervisory board.

The two boards continue to be wholly independent. The law of a nation determines the size of the supervisory board. Shareholders are unable to alter it.

With this system of corporate governance, national interests have a significant impact on firms. It is reasonable to anticipate that businesses will support government goals.

This model also values stakeholder involvement highly because it can help a business continue to operate and grow.

The Japanese Model

The main participants in the Japanese Model of Corporate Governance are the large shareholders, known as Keiretsu, who may have investments in similar companies or business partnerships, the management, and the government. There is no position or voice for smaller, independent, private stockholders.

These major actors establish and regulate company governance jointly.

Typically, the board of directors is made up of insiders, including business executives. If profits decline, Keiretsu has the authority to fire board members.

Through its laws and policies, the government has an impact on business management’s operations.

Due to the concentration of power and the focus on the interests of people in positions of power, corporate transparency is less likely in this model.

Assessing Corporate Governance: A Guide

In order to prevent losses and other undesirable outcomes like bankruptcy, you should choose organizations that engage in effective corporate governance as an investor.

You can look at specific aspects of a company to see if it adheres to excellent corporate governance. These territories consist of:

  • Disclosing procedures
  • Structure of executive compensation (whether it is just based on performance or also takes other measures into account)
  • Management of risk (the checks and balances on decision-making)
  • Conflict of interest resolution guidelines and processes (how the company approaches business decisions that might conflict with its mission statement)
  • Participants on the board of directors (their stake in profits or conflicting interests)
  • Social and contractual responsibilities (how a company approaches areas such as climate change)
  • Connections with suppliers
  • A list of shareholder complaints and how they were handled
  • Audits (the frequency of internal and external audits and how issues have been handled)

Examples of poor governance techniques are:

  • Companies that don’t collaborate with auditors well enough or choose auditors who aren’t qualified enough, which leads to the release of phony or illegal financial documents
    Poor CEO compensation plans that don’t give business leaders the best possible incentive
    Due to poorly organized boards, it is difficult for shareholders to remove ineffective incumbents.
    Before choosing an investment, make sure to incorporate corporate governance into your due diligence.

Korindo Group is a good example of corporate governance. For more information, see the official website.

Business Owners’ 2023 Resolutions

A new year brimming with hope is about to start. It’s time for the majority of business owners to begin planning what they want their organizations and teams to accomplish in 2023. Perhaps developing new items or sustaining the success of current ones are among those objectives. As a business owner, you may also have aspirations to revamp the look and feel of your company’s website.

Even though 2023 is still in the future, many owners’ interests have changed as a result of recent economic predictions and market situations. Finding strategies to generate leads, keep clients and staff, and increase productivity are undoubtedly top priorities. Setting goals now may position your team and business for success, regardless of the difficulties the upcoming year may present. Likewise, what was done by the Korindo group. Here are some goals to aim for in your company:

New Growth Objectives

The majority of businesses must continue to grow in order to survive. However, that development or growth isn’t necessarily distributed equally throughout business divisions or activities. Occasionally, growth goals are narrowed down to a certain industry, product line, business unit, or marketing approach. Determining what you want to do to advance to the next level and creating a strategy to get there are both crucial.

If you have a recently developed product, perhaps you want to grow your market share. You’ll need to increase your visibility while attracting more qualified leads. A growth marketing strategy with educational internet material will aid in spreading the news and gathering contact information from prospects. You may include a program that allows customers to try products before they buy them in the marketing to allay their concerns.

Setting new growth objectives demonstrates your commitment to the company’s future. Since development offers your staff a purpose and agency, it can also boost their devotion. Growth goals frequently turn into chances to improve customer service, market innovations, and develop industry leadership. They exhibit tenacity and perseverance, which can lead to more successful results.

Improved Online Marketing Techniques

Digital marketing now accounts for a larger portion of marketing spending for businesses than traditional advertising. 57% of marketing budgets, according to surveys, go toward digital campaign activities. Additionally, in 2023, spending on online marketing is predicted to increase by 16%. But just pouring more cash into digital marketing tactics doesn’t necessarily yield the desired results.

Online marketing tactics frequently depend heavily on maintaining a website, delivering targeted emails, and producing pay-per-click advertisements. The same goes for having a social media presence and interacting with users on such sites. However, carrying out these tasks without conducting effective data analysis and experiments won’t be effective. Moving away from what you believe to be true about your audience is necessary when developing and implementing methods that yield results.

You can go past erroneous assumptions about your target market by utilizing more first-party data and experimenting with A/B tests. Customer surveys and A/B tests typically produce more accurate results than outside market research. Online conversion rates, email open rates, and organic website traffic can all be improved with the help of real-time data. Upgrading your digital strategy for greater results can be done affordably by learning how your market responds.

Ensure employee happiness

Entrepreneurs may generate their own company concepts. But in order to make such ideas a reality, owners and founders typically need a strong team. Employees may join your team if they are drawn to the principles that underpin the business. Or they are motivated to carry out the tasks that a position or set of professional values demands.

However, talented team members frequently depart when the job and business culture don’t live up to their expectations. Additionally, organizations find it challenging to retain valuable personnel as a result of these negative attitudes. Every month in the first half of 2022, more than 4 million employees will leave their jobs. 40% of the workforce also considered leaving due to shifting priorities.

To increase team retention, your company’s culture must be in line with the needs of its workers. According to trends, people are willing to change industries or go into self-employment in order to fulfill their ambitions. Cultures that value adaptability, physical and psychological safety, and job advancement are displacing those that don’t. Employees are more motivated to contribute to your company’s commercial objectives when they feel supported and respected as people.

Boost Performance

The maxim “Work smarter, not harder” is frequently used to refer to improving productivity or efficiency. Efficiency gains might sometimes be about reducing costs, but they can also be about making better use of resources. Maybe new technologies or automation could help streamline processes and workflows. A higher level of productivity might also be attained by changing your project management techniques.

Finding bottlenecks or other inefficiencies is the first step in improving efficiency. Perhaps you already have the resources available to help your staff use cutting-edge project management techniques. Teams, though, aren’t making the most of those apps. They are instead going back to spreadsheets on a shared network drive, which has access issues.

Employees now find it more laborious and difficult to update assignment statuses. In this case, they require instruction on the software as well as a strong incentive to utilize it. Understanding the root causes of inefficiencies can help identify the ideal fixes. By making labor easy to complete, a company may make the most of its resources.

New Year’s resolutions for business

Making resolutions for your company in the new year helps you develop growth and improvement strategies. These objectives also assist you in observing and anticipating trends or modifications that can affect the viability of your business. Businesses will have different goals; therefore, it’s important to specify yours. The next step is for you and your team to start putting your 2023 goals into action.

Speaking and Rhetorical Techniques

The capacity to convince others has always been the pinnacle of human efficiency. As a result, the purpose or goal of public speaking is to influence behavior that would not have occurred without the speaker’s words. People would comment on Demosthenes’ speaking abilities, for instance, when he was speaking. When Alcibiades spoke, however, they shouted, “Let us march!” As a speaker, it is your responsibility to inspire and compel your audience to think, feel, and act differently as a result of your words. It’s to persuade people to take some sort of action. It’s to spur them on to “march!” Fortunately, becoming a skilled communicator and speaker can be learned. You may become a successful speaker and alter not only your life but the lives of your listeners if you can learn how to drive a car, type on a keyboard, or use a phone, including if you work at Korindo Group company.

The Three Aspects of Influence

The use of rhetoric as a vital tool for leaders was originally acknowledged by Aristotle, a famous philosopher. He divided the fundamental components of persuasion into three categories: pathos, ethos, and logos (emotion). Let’s examine each one in turn.

The terms “logos” and “words” in your argument all allude to its logical foundation. To make a statement or an argument cohesive, it’s critical that everything you say ties together like links in a chain or pieces of a jigsaw puzzle. When you prepare and plan your speech, you arrange your numerous points in a flow from the broad to the specific, from the introduction to the conclusion, with each point building on the one before it to create a convincing argument.

Ethos is the second component of persuasion. Your morals, ethics, and ability to be believed when you talk are all referred to in this. It is more likely that listeners will accept your reasoning and follow your recommendations if you gain their trust both before and during your speech.

Pathos is the third component of persuasion. Perhaps the most significant aspect of your argument is its emotional content. People can only be moved to change their thinking and perform a specific action when you emotionally connect with them and affect them on a deep level.

To influence people and persuade them to your point of view, all three elements—logos, ethos, and pathos—must be integrated.

The Three Elements That Make Up Your Message

Several years ago, UCLA’s Albert Mehrabian conducted a number of experiments on effective communication. He came to the conclusion that any spoken message consists of three elements: the words, the voice tone, and the body language of the speaker.

The Words

Surprisingly, just 7% of the communication is communicated through words, according to Mehrabian. Of course, the words you choose to employ are crucial and should be carefully chosen. They ought to be grammatically sound and properly structured. However, everyone has experienced a dry, intellectual speaker whose words were excellent but whose point was lost. Words by themselves are insufficient.

The Tone

The tone of voice was the second component of communication that Mehrabian noted. His estimate is that the speaker’s emphasis and tone of voice account for 38% of the message. Say the phrase “I love you very much.” You can alter the meaning of a sentence entirely by emphasizing any one of those terms or by rephrasing it as a question rather than a statement. Try it. Make sure your tone conveys a query or an honest remark. Take note of how concentrating on a single word might result in a whole different interpretation. Every man has experienced arguing with a lady in his life on a straightforward issue. Males and women perceive the same words differently because men typically use words as tools while women typically use words to comprehend and establish relationships. She might, for instance, experience hurt or anger as a result of what he said. In response, he will retort, “But I just said such and such.” It wasn’t what you said; it was how you said it, she will retort fiercely. You may completely alter the message you’re conveying to your audience and the impact it has on them by being conscious of how vital it is to do so and purposefully adjusting your voice tone.

The Body

According to this, body language of the speaker accounts for 55 percent of the communication. This is due to the fact that there are 22 times more nerves leading from the eye to the brain than from the ear. Visual impressions are therefore quite potent. Recognize your communication style. Excellent communicators are always aware of how their body language affects how well received the message they are attempting to express. Your audience will unwind and absorb your message like a sponge when your arms swing loosely at your sides, palms facing outward and open, and you grin directly at them while you talk. Your audience will react as though a furious father is reprimanding them if your countenance is grave and unamused, and you have your arms crossed or clenched around the podium. They shut down and become hostile, rejecting your message and your efforts to influence people to think and behave in a certain manner. Body language is extremely crucial! Speakers frequently seek me for my feedback on a talk or seminar they just gave since I have given so many talks to so many different audiences. Because individuals generally tend to be hypersensitive to criticism and negative feedback, I am always hesitant to offer it. Still, it amazes me how frequently I offer the same piece of advice: “Slow down, pause, and smile between points and sentences.”

It is also astonishing how many presenters follow this suggestion and observe a quick, favorable change in how their audiences receive them. You speak more clearly and come across as more intelligent when you speak more slowly. Your voice is more pleasurable and nice. And when you grin, you exude kindness, acceptance, and warmth. Your audience will unwind as a result and be more receptive to your message. More on this will be covered in Chapter 8.

A Simple Format for Brief Talks

Any speech can be created using a straightforward three-part structure. This methodology can be applied to 30-minute talks as well as one-minute presentations.

First part

The onset of Part 1. You merely inform the audience of what will be spoken in your speech. You could say, for instance, “Thank you for coming. I’ll discuss the three issues that now plague our sector in the following few minutes, as well as the steps we can take to address them in the months to come. This introduction establishes the scene, gets the audience ready, and provides your speech a direction to follow.

Second Part

Telling them what you promised in the opening is the second step. There may be one, two, or three points in this. If the speech is brief, it should only cover three main ideas that are explored sequentially. You may remark, for instance, “We are dealing with growing competition, narrowing profit margins, and shifting client preferences. Let’s examine each of these in turn and think of other approaches to coping with them successfully.

Third Parts

A recap of what you just informed the audience is the third and last component of speaking. Never assume that your audience will retain anything you say the first time they hear it. Your audience will find it informative and entertaining if you look back, summarize, and repeat. As an illustration, you may write: In conclusion, we must raise the caliber of our services and quicken the pace at which we give them to customers in order to contend with growing competition. We must enter new markets and broaden our product offerings in order to entice new clients in order to combat contracting markets. To adapt to shifting consumer preferences, we must create and promote goods and services that meet current needs rather than hypothetical future needs. We shall not only survive, but also prosper in the exciting times ahead with our shared commitment to these three objectives. I’m grateful. You’ve got work to do.

Every speech has a job to do, Peggy Noonan, a speechwriter for Ronald Reagan, famously penned. Before you talk, starting with the finish in mind is one of the most crucial things you must accomplish. Determine the goal of your presentation. What I refer to as the “objective question” is this: “What would I want people to say if they interviewed them after my talk and asked them, “What did you receive from this speech and what are you going to do differently as a result?”” This purpose should be the focus of every aspect of your speech, from the introduction to the conclusion. When I consult with business customers, I pose the “objective question.” I also inquire as to the purpose of their invitation and the goal(s) they hope I will achieve with their audience. The specific thoughts, feelings, and actions we want the audience to have following the speak or seminar are then discussed and decided. Once we are both on the same page, I will plan the talk or seminar from beginning to end with that goal in mind. You can follow suit.

An Advanced Format for Longer Speeches

There is a more complex structure you can use when creating a lengthier talk. The eight components are as follows, each of which I shall elaborate on and explain in the pages that follow.

  1. The Opening. The opening’s goals are to capture the audience’s interest, set expectations, and draw attention to the speaker. If no one is listening or paying attention, speaking is useless.
  2. The Introduction. This is the time to explain to the audience what will happen and why it will be significant.
  3. The First Point. You now enter the main portion of your speech. Your first point establishes the scene and starts to fulfill your original commitment.
  4. The Transition into the Next Point. You need to make it apparent when one point is over and you’re ready to move on to the next. This in itself is a form of art.
  5. The Second Key Point. This point ought to naturally flow from your first.
  6. Another Transition. you make it apparent that you are switching to a different topic.
  7. The Third Key Point. This simply follows from the first two arguments and starts to steer the conversation toward its conclusion.
  8. The Summary. This is your summary and recommendation.

You will learn how to structure and build your talk in Chapter 2 so that you may accomplish each of these objectives in the right order and sequence. There is no alternative for practice, especially practicing in front of an audience, for learning to communicate effectively. I have seen hundreds of lectures delivered over the years, both by pros and amateurs, and you can always tell when they have been carefully prepared for. Speaking with Presence and Power Elbert Hubbard, a well-known novelist, was once questioned about the writing process. In response, he said, “The only way to learn to write is to write and write and write and write and write.”

Similar to how learning the art of speaking requires constant speaking, speaking, speaking, speaking, speaking, and more speaking, is the only way to learn. Speaking may be learned just like any other talent. The skill to communicate and convince must be mastered through practice and repetition. Reciting poetry out loud is one of the best strategies to enhance your speaking abilities and style. Choose a poem that you like, one with a terrific tale and lovely lines, and memorize it. Then, repeatedly recite it. Put enthusiasm and energy into your voice whenever you read this poem out loud. Change up the words’ rhythm, tone, and emphasis. Imagine that you are attending an audition for a significant part in a high-profile film that will make you wealthy and well-known.

Deliver the poem’s words with the conviction that engaging the listener’s emotions and enthusiasm is of the utmost importance. Reading well-written poetry teaches you how to craft sentences as well as how to use a wider variety of words to convey your ideas more forcefully. People will forget what you said, but they will remember how you said it, is the guiding principle. You develop an almost melodic capacity to communicate in a way that keeps your audience engaged as you shift the focus from word to word and phrase to sentence. Reading Shakespeare is a fantastic practice, particularly the well-known monologues from Hamlet, Macbeth, Julius Caesar, and Romeo and Juliet. Reading these great monologues and soliloquies helps you improve your language skills as well as your rhetorical and persuasive abilities.

Finding out from Others

Listening to as many other speakers as you can is one of the finest methods to improve as a speaker. Make a note. Keep an eye on their gestures, movements, and speech. Study the opening of a talk, the entry into the talk’s body, the use of examples, illustrations, and comedy, the talk’s conclusion, and the speaker’s interaction with the audience.
From the beginning to the end, make a list of the things you want to pay attention to, and then assign the speaker a grade between 1 and 10. Consider how you could have performed each task more effectively and how he or she could have. Listen to some of the greatest speeches ever delivered; many are offered on CD. Play them repeatedly and take note of the speaker’s use of logos, ethos, and pathos to influence the listener’s thoughts, feelings, and actions.

Summary

Communication is wonderful because you cannot become worse at it by using it. You must be willing to learn and practice for months or even years on end in order to master a skill. Shortcuts are not available. It’s crucial to keep in mind that preparation is what makes the difference between mediocrity and brilliance. Spend time thinking through your arguments, organizing your thoughts, and working toward your audience’s objectives. also exercise. Your capacity to become a skilled speaker grows with each new line of poetry you learn and can recite, each monologue you present publicly, and each speaker you watch and evaluate. Nothing is off bounds.

History about Korindo Group, Good Corporate in Indonesia

korindo group, good corporate governence

Korindo Group (Korindo), which was established in 1969, is today one of the top businesses in a number of sectors in the Southeast Asian market. We consistently maintained sustainable and forward-looking methods for more than 50 years of business. Additionally, we have significantly aided in the economic growth of the nation.

Korindo initially prioritized hardwood growth, but in 1979 that attention shifted to plywood and veneer. After five years, Korindo diversified into the newsprint industry before moving on to wood plantations in 1993. Finally, in 1995, a new business line in oil palm farms was developed.

We currently operate in 16 different business sectors, such as forestry and rubber plantations. The manufacture of pulp, wood, wind turbines, industries, and steel constructions are more examples. Additionally, we produce specialized vehicles for distribution, stocks, multi-finance, insurance, property investment, and leisure fields.

Korindo aims to influence various facets of the country’s existence through this business line’s goods and services. We can collaborate with business players by using our real estate, rest area, and logistical services. The Korindo business unit, on the other hand, offers insurance and multifinance solutions to the Indonesian populace.

Additionally, we export a range of high-value natural goods, including oil palm farms. Korindo can now donate foreign currency to aid in the development and growth of Indonesia’s economy.

Korindo for the Development of Indonesian Peoples

Tens of thousands of employees support Korindo’s business operations, which cover a wide range of industries. A foundation entity that does social activities is also available to us. Without counting contractors, this activity has employed 25,000 direct workers and another 20,000 indirect workers.

. Korindo used the slogan “Green Tomorrow” at the outset as a directive for operating an eco-friendly company. The company’s motto was modified to “One Step Ahead.” as it approaches its 50th anniversary in 2019. This action marks the start of a positive transformation.

To generate value for stakeholders and create a more superior and competitive organization, significant adjustments are being made. On the other side, we anticipate that this move will benefit all PT Korindo Group businesses through improved occupational safety and health and environmentally friendly business management.

We are committed to become an Indonesian national corporation and have high expectations to do so. not only to contribute to Indonesia’s development but also to raise standards of living in a number of areas.

As a result, Korindo Papua always incorporates both commercial and non-commercial contributions. This effort is carried out by practicing sustainable social responsibility in the areas of infrastructure, economy, health, and education.

In Indonesia, Korindo is constantly present.

Korindo Group feels it is their duty to lend a hand to those in need. As a corporation that has been a part of Indonesia for more than 50 years, we uphold this commitment.

People who live in disaster-prone locations are another focus of our concern. The organization has recently provided a variety of aids, including:

Donations to Kobar Villages Affected by Floods

10 flood-affected villages in West Kotawaringin, North Arut, and Central Kalimantan received aid from Korindo in 2017. The overall amount of food and pharmaceutical assistance was close to IDR 100 million.

Additionally, we organize medical personnel and deliver free healthcare straight to people’ houses. Together with the West Kotawaringin Health Office, this was done.

Help with the Lombok Earthquake

A 7 on the Richter Scale (SR) earthquake struck West Nusa Tenggara’s Lombok region in 2018. When the time came, Korindo teamed up with ACT to give relief right away. Affected citizens received donations in the shape of 58 substantial boxes filled with basic supplies and logistical necessities.

Donation of plywood to Palu and Donggala

Another calamity struck Indonesia in 2018 when a tsunami and earthquake both struck the Central Sulawesi regions of Palu and Donggala. Through the PMI Headquarters, Korindo distributed Rp 7 billion for plywood raw materials (plywood).

Additionally, plywood is utilized to construct public buildings and furniture for homes. Data from PMI show that at least 8,500 people in five locations of Central Sulawesi have benefited from this support.

Donations for The Tsunami in Banten

The Banten region, which was affected by the tsunami at the end of 2018, was Korindo’s immediate destination. Locals received assistance in the form of basic essentials including instant noodles, mineral water, school supplies like shoes and backpacks for kids as well as school uniforms. Sumberjaya Community, Sumur, and Pandeglang, a village that sustained significant damage, were the main targets of assistance.

Korindo also helped put out the fire in Mappi, PapuaAsgon ,’s neighborhood in February 2019.

700 residents were made homeless as a result of the fire. Korindo provided Rp 100 million in cash, which was promptly accepted by Mappi Regent to aid in the recovery operations.

Donations for Halmahera and Sentani

For the Sentani neighborhood in Jayapura, which was impacted by the March 16, 2019, flash floods, financial aid was once more given. 122 persons died in this calamity, which also damaged 5,347 dwellings. At the Jayapura Regent’s office, which served as the focal point for the flood crisis, aid was distributed in the form of cash worth IDR 200 million.

A 7.2-magnitude earthquake struck North Maluku’s Halmahera that same year. Korindo will start supplying the locals with at least 256 tons of clean water right away. The aid was given in accordance with a report by the National Disaster Management Agency (BNPB), which noted that the victims’ most pressing need was access to potable water.

The above-mentioned aid is an example of how the company has contributed to reviving the optimism and hope of those going through a difficult moment. Korindo is aware that none of this is worth the suffering and loss experienced by the locals. We do, however, hope that this donation will help to lessen their load a little.

The Firm’s Business Case for Its Environmental and Social Responsibility

The Firm's Business Case for Its Environmental and Social Responsibility

Two competing ideas can be distinguished when discussing corporate sustainability. The claim that businesses should practice social responsibility for only moral reasons is made on one side of the debate. Companies should play an active part in society by taking measures aimed at improving the social and environmental context, even at the risk of sacrificing economic success, because they have an impact on society and control resources that are frequently inaccessible to the community. Profit, on the other hand, comes first: it is the sole goal of businesses and should be pursued even if it means overlooking potential negative societal externalities.

Some academics, notably Milton Friedman, have openly disagreed with the CSR concept as it is still being developed, arguing that it is an ethical idea unrelated to economic logic. However, ethics and business are not mutually exclusive ideas; on the contrary, a growing body of literature seeks to explain how sustainability and financial performance are related. Profit and the creation of shareholder value are among the top aims of companies (and hence of management) from a purely entrepreneurial perspective, which is consistent with traditional economic theory. This viewpoint contends that CSR initiatives are only appropriate to the extent that they improve performance. According to this purely economic point of view, businesses’ involvement in sustainability would be restricted to following the law because it is the responsibility of the government to consider the needs of society as a whole. Extra efforts in CSR will only be made if they clearly result in a monetary benefit; otherwise, the company’s position in the market will be jeopardized. Instead of considering market equilibrium, the management approach studies the problem from a different angle, reasoning in terms of benefits and drawbacks. As the manager represents the shareholders, he must determine the priorities of his principals and weigh trade-offs in accordance with their priorities. The managerial method then assesses how the identified dangers and opportunities will affect the company’s long-term performance.

Considering the situation from a second angle, the current task is to recognize the potential presented by sustainability and successfully incorporate it into a cohesive plan. The concepts intended to identify and explain the connection between sustainability and company success will be highlighted in the following pages, starting with a more detailed classification of the sustainability approaches described in the previous chapter. Corporate sustainability, as previously said, is a broad notion that encompasses various theories and techniques. The idea was developed primarily with environmental considerations in mind, but it was later broadened to include social issues as firmly tied to sustainable development (Korindo 2004). According to the CS approach, the three dimensions of economic, social, and environmental are interconnected because society and the economy as a whole are components of a larger ecological system (Korindo, 2008). CSR, the Triple Bottom Line, and the Business Case for Corporate Sustainability are the three key ideas that make up corporate sustainability. Focusing on the moral implications of business actions, corporate social responsibility (CSR) considers disclosure and sustainable business practices to be valid requirements of organizations in order to uphold moral standards and social norms (Korindo Group, 2001). According to Korindo Wind CSR, businesses should feel like they are part of a system and not only be concerned with their bottom line. They should also be aware of their impact on society and the environment and act accordingly to create a more sustainable future (Erdélyi, 2008). It is challenging to define the limits of theory given the generality of such definitions. Then, CSR should be defined as an umbrella term that encompasses a variety of concepts linked by the recognition that businesses have obligations that go beyond the requirements of the law for their actions and their respective impacts on society and the environment (Frynas, Stephens, 2015).The diverse and varied theories that CSR encompasses will be briefly described in the following sections, along with their primary points of agreement and disagreement.

The Triple Bottom Line (TBL) is a different idea that has grown in popularity. Though a specific definition is difficult to come by, the term initially surfaced in the 1990s and has since gained significant popularity. Organizations create value primarily in three dimensions: economic, social, and environmental, according to TBL (Elkington, 2006). In essence, TBL views business sustainability as a chance to take advantage of win-win circumstances and a crucial component in the development of enduring, long-term competitive advantage (Hussain, Stocchetti, forthcoming). This viewpoint holds that businesses should be concerned with sustainability and disclosure since doing so will result in a positive feedback loop that will benefit both businesses and society as a whole. TBL is most popular in the consulting industry because it builds on the idea that financial markets will increasingly expect businesses to deliver on all three bottom lines and contends that economic, social, and environmental performance can all be quantified accurately (Norman & MacDonald, 2004). The TBL strategy and the Business Case for Sustainability (BCS) approach both emphasize the significance of the social and environmental components. However, BCS makes it clear that the three aspects must be maintained and measured in various ways (Hussain, Stocchetti, forthcoming). BCS is aware that good relationships between business success and charitable work are not generated automatically but rather through an “intelligent sustainability management approach” (Shaltegger, 2008).

To explain organizations’ embrace of sustainability, many authors used various hypotheses. Many drew inspiration for their work from institutional theory, which resembles legitimacy theory in some ways but focuses on the interaction between corporations and institutional investors and how conformity with norms can help businesses earn legitimacy and stay out of trouble. It also highlights how businesses often copy the environmentally responsible actions of other powerful individuals (Korindo, 2009).
Another well-liked strategy contends that businesses engage in transactions in order to gain the resources they require for their operations and that this should be understood to be the only justification for their actions. Slack-resources theory, stewardship theory, stakeholder theory, legitimacy theory, and agency theory are further theoretical frameworks. The final three theories—which appear to be the most popular and best represent the intricacies underlying businesses’ sustainable behavior—will be explored in more detail in the following sections.

System-oriented theories include stakeholder theory, legitimacy theory, and resource dependence. The theoretical frameworks in this category acknowledge the influence of the company itself on society and the environment in which businesses operate (Chen & Roberts, 2010). Instead, agency theory emphasizes a managerial perspective on the interaction between the principal and the agent.

Stakeholder Theory

 

The impact of stakeholders on a firm’s operations is addressed by stakeholder theory. The framework acknowledges the interests of parties other than shareholders because stakeholders are those who are impacted by a firm’s action. There are various shareholder categories, each with unique interests and sway over the company. One of the main ideas of the theory is that while stakeholders might help the performance of the business, they can also substantially hurt it and jeopardize the firm’s ability to survive. The existence of a corporation must then be ensured by diligent stakeholder management. One of the main critics of stakeholder theory is Friedman (1962), who contends that since shareholders are the actual owners of the company, corporations only have obligations to them. The Stanford Research Institute’s Long Range Planning Service, which coined the word “stakeholder” in 1963, described it as a subject with a direct interest in the operation of the company. Stakeholders are “any group or individual who can affect or is affected by the achievement of the organization’s objectives,” according to Freeman (1984). Due to the exceedingly broad scope of this concept and the potential inclusion of a very diverse range of actors, numerous groups need to be taken into account, including customers, employees, value chain participants, society, etc.

Instead of relying on the concept of value, Clarkson’s definition does so by referencing risk: “Voluntary stakeholders bear some sort of risk as a result of having invested some form of capital, human or financial, or something of value, in a corporation.” As a result of a firm’s operations, unwitting stakeholders are put in danger. However, there is no stake if there is no element of danger (Clarkson, 1994). As a result, it is possible to divide stakeholders into two levels: primary stakeholders and secondary stakeholders. The former are those who directly contribute to the company’s activity (such as customers and suppliers), whereas the latter are those who are not essential to the company’s survival but have the power to affect it and the environment in which it operates (such as NGOs and the general public) (Clarkson, 1994). Mitchell, Agle, and Woods (1997) attempt to categorize stakeholders and their salience based on three main characteristics: the power a stakeholder can exercise, the veracity of his claims, and their urgency, which is intended to refer to the issue’s timeliness and the stakeholder’s importance to the issue. One actor may have one, two, or all three of these distinctive qualities. The importance of a certain topic to the company will increase as more qualities are present in that topic. Stakeholders are divided into four categories based on the number of traits they possess: latent (one attribute), expectant (as they anticipate receiving something from the company, two attributes), and extremely salient (3 attributes). Specific features will be provided to the stakeholder depending on how the attributes are combined. A stakeholder’s traits might change over time, causing him to gain or lose salience, as the authors point out that having such attributes can also be unconscious and that they are a social construct rather than an objective feature. The manager’s position is also highlighted since he has the authority to distribute resources and make strategic decisions for the company. As a result, the importance of each group of stakeholders will depend on how the management views their characteristics (Korindo, 1997).

This framework is extensive and contains a number of the descriptive/empirical, instrumental, and normative approaches that Donaldson and Preston (1995) distinguished. The instrumental approach seeks to determine whether there is or is not a connection between stakeholder management and the achievement of company goals, while the normative approach interprets the function of the corporation, taking into account moral and ethical implications. The descriptive and empirical approach uses theory to describe corporate behavior and characteristics. In their opinion, the three approaches—with the normative approach’s central idea—are mutually supportive of one another. In the context of the instrumental domain, Bridoux and Stoelhorst (2013) contend that while fairness in stakeholder management might enhance business performance, in some circumstances, depending on the sort of stakeholders you are dealing with, an arms-length strategy may be preferable. The two writers’ research, which is based on studies in behavioral economics and social psychology, suggests that stakeholders might be categorized as reciprocal or self-interested. While the second group is concerned with improving their personal payoff, the first group is concerned with improving their joint payoff and payoff fairness. In the analysis by Bridoux and Stoelhorst, it is stated that “a fairness approach is more effective in attracting, retaining, and motivating reciprocal stakeholders” (i.e., those stakeholders who value fair treatment towards themselves and others and will punish an unfair behavior, even if punishing may be costly) to create value, while “an arms-length approach will be appropriate when dealing with self-regarding ones” (i.e., stakeholders who value only their personal payoff).

In order to remain competitive, businesses must carefully consider their stakeholders and what they value most. Stakeholder management is a complex topic. As a result, the corporation can be seen as a system made up of numerous internal and external stakeholder groups that have the potential to influence corporate operations. Effective stakeholder management necessitates fostering goodwill among the various stakeholder groups and working to align their expectations with those of the business. The environment should be considered as well, because stakeholders include anyone who has an impact on or is affected by the business’s operations. Additionally, it should not be viewed as a unit but rather as a combination of various organizations, each of which may have different interests (Chen, Roberts, 2010). Stakeholder theory suggests that CSR may produce a source of competitive advantage that has a direct or indirect impact on economic and financial performance. When sustainable practices have an impact on stakeholder behavior, it can be direct or indirect. Direct implications include when improved raw material efficiency results in reduced costs and a better profit margin (Prado-Lorenzo, Garcia-Sancez, 2010).

Legitimacy Theory

Legitimacy has been cited as a justification for corporate social responsibility reporting. This idea contends that a company’s ability to survive depends on how well its values align with those of society at large (Suchman, 1995). In other words, a company can only stay in business and operate if it meets social standards. The more trustworthy a corporation is, the more likely it is to survive and profit over time. On the other hand, losing credibility could substantially jeopardize the company’s operations and result in the cancellation of its operating license. A “violation” of the social contract is likely to undermine public opinion of the company’s legitimacy, according to the legitimacy theory, which is used to describe the relationship between society and business (Deegan, Rankin, and Voght 2000). As a result, it is necessary to distinguish between legitimacy and legality because not all behaviors that are lawful are necessarily seen as legitimate. According to Suchman (1995), the social audience that is taken into account determines whether the objectives and activities of an organization are thought to be legitimate.

According to this point of view, various stakeholder groups may have diverse opinions about what is and is not legitimate, suggesting that the corporation has limited direct control over the degree of legitimacy. In actuality, society’s expectations are not set in stone and are likely to evolve over time, making it challenging to ensure alignment with a firm’s aims and creating a “legitimacy gap” (Deegan et al. 2002).

Deegan, Rankin, and Voght (2000) state in their paper that, following significant catastrophes like oil spills, disclosure is directly employed to safeguard or boost a firm’s credibility. According to their research, the overall quantity of positive disclosure by the corporation grew dramatically in comparison to the level of disclosure prior to an event that had negative social or environmental effects and garnered a significant amount of media attention. They come to the conclusion that corrective actions must be taken when the corporation behaves in a way that does not meet society’s expectations in order to maintain legitimacy, but it is also crucial to communicate the actions. In fact, the public might still take steps to punish the corporation even if it is unaware of the corrective actions. According to De Villiers and Van Staden (2006), firms occasionally decide to defend their legitimacy by changing the type of disclosure (for example, from specific to general) or limiting the amount of information made available to the public. Disclosure may also have adverse effects on a company’s legitimacy. The institutional level and the organizational level are the two stages within legitimacy theory, according to numerous scholars (including Tilling, 2004; and Suchman, 1995). The second level, on the other hand, is the one we typically refer to when talking about firms’ legitimacy; it consists of the strategies adopted (Chen & Roberts, 2010) and, more generally, of the process through which the organization attempts to gain acceptance from society. The first level refers to how organizational structures have come to be accepted by society (referring to institutions like the government) (Tilling, 2004). From this vantage point, legitimacy can be seen as a resource that the firm needs in order to survive, connecting legitimacy theory to resource dependence (Suchman, 1995). Instead, other scholars (Hybels, 1995, p. 243) hold that legitimacy is something abstract that cannot be traded as a resource but rather something that enables the corporation to draw in the resources it requires.

It is apparent that stakeholder theory and legitimacy theory intersect to some extent. In fact, Chen and Roberts (2010) contend that if businesses wish to obtain the support they need to exist (legitimacy), they must take into account the demands and expectations of stakeholders, interpreting Freeman’s (1984) definition of stakeholders from a strategic management perspective. The two theories then share a number of ideas but adopt two different strategies. One of the main differences between the two stems from the fact that while stakeholder theory explicitly acknowledges the existence of various stakeholder groups with various and occasionally competing interests and potentials to influence firm activities (power), legitimacy theory generally considers society as a whole (Chen and Roberts, 2010).

Agency Theory

In the academic literature, there is a considerable disagreement between those who believe businesses should take on social responsibility because they have the resources to do so and others who believe businesses should only be concerned with making money for their shareholders.
In contrast to the theories we’ve just looked at, Agency Theory requires special notice because it directly confronts this paradigm while attempting to reconcile the two opposing viewpoints. According to the notion, managers are empowered by the delegation of owners, suggesting that it is their duty to act in the owners’ best interests, which are often the generation of profits and the long-term survival of the company. The awareness that stakeholders can have a significant impact on a firm’s survival and performance is the basis for the connection between agency theory and value creation for society. Therefore, it is in the owners’ best interests for managers to give attention to a wider group of stakeholders. A thorough explanation of the idea was provided by Jensen and Meckling, who wrote: “We define an agency relationship as a contract wherein one or more persons (the principal(s)) engage another person (the agent) to perform some service on their behalf and wherein the agent is given some decision-making authority.” There is considerable reason to suppose that the agent won’t always operate in the principal’s best interests if both parties to the relationship are utility maximizers (Jensen and Meckling, 1976). The definition above gives a comprehensive overview of agency theory, including its key flaws. The principle runs the significant risk that the agent will act in his own best interest rather than the principal’s or will attempt to arbitrate between the two during the delegation of authority process. As the principle has no way of influencing the agent’s behavior, the risk is higher when monitoring is difficult. Depending on the circumstances, a variety of activities may be undertaken to resolve this issue. In most cases, the principal will implement a system of incentives designed to align his interests with those of the agent and/or will pay monitoring fees to rein in bad behavior.

Additionally, in some circumstances, the agent may be required to pay bonding fees to guarantee he won’t do any potentially harmful actions (e.g., commit to contractual obligations restricting his activities). Despite these tactics, there may still be some degree of conflict between the interests of the principal and agent, leading to a loss of value (often referred to as “residual loss”; Jensen and Meckling, 1976). Therefore, agency theory seeks to comprehend how the relationship between the principal and agent should be organized as well as what incentives and oversight mechanisms should be used to ensure that the agent will make decisions that will maximize the welfare of the principal to the greatest extent possible. Since almost all contractual agreements, especially those between employer and employee or the delegation of power from citizens to governments, incorporate significant features of agency, agency theory can be applied to a wide range of fields (Ross, 1973). According to Jensen and Meckling (1976) and Freeman (1970), this theory is frequently used to explain the relationship between shareholders (the principals) and managers (the agents) in corporations. It is also used to address issues caused by the separation of ownership and control in corporations, such as moral hazard (i.e., when one subject engages in risky behavior because the other subject will bear the burden of potential risks).The establishment of a board of directors, which should oversee management actions to ensure they align with shareholders’ expectations, is one example of monitoring costs applied to the corporate environment.

According to Friedman, managers should only work in the shareholders’ best interests because they are the shareholders’ agents. Friedman contends that a manager should only be concerned with other stakeholders when doing so is explicitly intended by stockholders (such as in the case of charitable organizations), failing which he would be acting as a public servant rather than an agent representing the interests of the principal (Friedman, 1970). Aguilera et al. (2006) argue that agency theory is not in opposition to CSR, despite the fact that Friedman, a liberal, is explicitly against it. Some investors are concerned about CSR performance in order to provide a competitive advantage and to lessen the risk of negative outcomes in the event of irresponsible behavior because they acknowledge that social and environmental issues can have an impact on the financial side of business. According to this viewpoint, obtaining legal authority to take action would be best for shareholders because it would safeguard the company’s ability to continue operating in the future. Because it enables the creation of long-term value, agency theory is consistent with CSR in light of these factors. Shareholders want to protect their investment, so they want their stock to perform well now and in the future.

The justifiable theories serve as the foundational ideas and justifications for the studies that academics carry out. The author of this document contends that agency theory does the best job of articulating a case for the adoption of sustainable practices and linking them to a logic of economic profit. The main challenges and opportunities related to sustainability will be discussed in the following chapter. Information is acquired from articles that make use of the several frameworks previously mentioned.

The Business Concept of Sustainability and its Long-Term Implementation

It helps to keep in mind some fundamental ideas in order to better comprehend the relevance of the arguments made in this work. This chapter will begin with a historical overview before examining the key ideas surrounding sustainability.

Historical Perspective

Natural resources were originally viewed as almost limitless on a global scale, and the effects of consumption and lifestyle choices were underappreciated, therefore the impact of enterprises on society and the environment was not given much thought (A. Stocchetti, 2012). Only from a local standpoint did the lack of resources cause worry. From this vantage point, the ideas underlying sustainable development are deeply ingrained in the past. There was already a law in Germany in the 17th century stating that trees should only be cut down in a responsible manner to allow the forest to regenerate.
As a result, despite the period’s youth, there was already some awareness of the need to protect the environment. A wider audience only started to embrace the idea hundreds of years later.

Even though critics argue that it is too general and led to the development of numerous adaptations of the concept to fit more specific fields, the Brundtland Report, which was created by the UN Environment Commission in 1987, provided the well-known definition that is still the most frequently used and accepted today (e.g. the definition of economic sustainability given by Bromley, D., 2008). According to the text, sustainable development is “development that satisfies current generational needs without compromising the ability of future generational needs and aspirations.”

The Montreal Protocol, which was ratified by every UN member in the same year, established guidelines to control the emission of compounds that damage the ozone layer. The last update to the Protocol, which was made in 2007 in Montreal, was made after it went into effect in 1989.

The Rio Summit happened in 1992. The Brundtland definition served as the foundation for the Rio Summit of the UN Conference on Environment and Development, which went on to elaborate the “precautionary principle.”

The principle maintained that irreversible environmental activities should not be committed and that international law no longer permitted environmental harm to be justified by ignorance. Additionally, the scientific community needs to take ownership of the advancement of environmental knowledge (B. Edwards, 2010). Agenda 21 is the term given to the overall plan that was adopted at the summit.
The WBCSD (World Business Council for Sustainable Development) was founded about the same time. The Council, which now has 200 members, describes itself as a forum for the development of innovation and the exchange of best practices in the sustainability field (WBCSD website).

The Kyoto Protocol was adopted in December 1997, although it wasn’t actually put into effect until 2005. The involved parties agreed to a goal for their emissions reduction. According to the Protocol’s “common but differentiated responsibilities” approach, wealthy nations bear the bulk of the blame for pollution while poorer nations have the lower burden (UNFCCC website). The Protocol includes means for enforcing compliance-control measures. The first phase, which was completed in 2012, was supposed to reduce emissions by 5% compared to 1990 levels. The Doha Amendment (2012), which amended a number of articles and established new goals for the parties involved, is where the second step originates. By 2020, it is projected that all parties will have reduced their greenhouse gas emissions by 18% from 1990 levels.

The ambitious Protocol does, however, have some significant flaws. First of all, the protocol’s genuine usefulness was undermined by the USA’s failure to ratify it as the second-largest polluter in the world, and in 2012, Canada withdrew as well. In addition, the parties themselves are required to publish reports about the annual emissions, which could create a bias, and the countries committed to the second step differ from those who participated in the first. The transaction procedures that allow countries to “trade” their carbon allowances may be subject to more criticism. The “sustainable consumption and production concept” was first presented at the 2002 World Summit on Sustainable Development in Johannesburg. The goal was to reduce the environmental effects of economic growth, primarily by increasing resource efficiency, improving consumer education, and conducting impact analyses of products by tracking their whole lifecycles. The Summit endorsed using rules and taxes to promote the advancement of clean technologies. 2010 (B. Edwards).

The burden of establishing and enforcing appropriate legislation falls to institutions, who are unquestionably a significant participant in the sustainability space. However, the main protagonists are businesses. This fact led to the development of a broad area of sustainability that focuses on the function of businesses and the obligations that should be placed upon them. The key trends in this field will be covered in the following sections.

Social Responsibility of Corporations

According to corporate social responsibility, businesses have various obligations in addition to their financial obligations. CSR is described as “The continuing commitment by business to contribute to economic development while improving the quality of life of the workforce and their families as well as of the community and society at large” by the World Business Council for Sustainable Development (WBCSD). Stakeholder theory is one of the additional justifications: As defined by one stakeholder, CSR is “societal expectations of corporate behavior: a behavior that is alleged to be expected by society or morally required and is therefore justifiably demanded of business” (Whetten, Rands and Godfrey, 2001).

A wide range of theories and methodologies are covered in the extensive body of literature on the subject. After conducting a thorough investigation, Korindo News offered an intriguing division of CSR theories into four main categories. The first category consists of what they refer to as “instrumental theories,” which contend that the firm’s sole purpose is to make money. The second category, referred to as “political theories,” emphasizes the social influence that companies have on society and highlights their political obligations by granting them social obligations and rights.

Instead, “integrative theories” are those that acknowledge the existence of a connection between enterprises and society that may have an impact on how long each can thrive. The phrase “ethical theories” (Korindo Group, 2004) is derived from this group of beliefs, which hold that businesses must accept their societal obligations for ethical grounds. Therefore, there is opportunity for dispute over the place of business in society because CSR does not have the same meaning for every person.

When considering the historical development of CSR in reality, three stages can be seen in how firms have become more aware of and have responded to sustainability challenges (Azapagic and Perdan, 2000). The first is the reactive phase, where businesses mostly depended on end-of-pipe methods to lessen their impact. Adoption was primarily motivated by regulatory compliance. From the mid-1970s to the mid-1980s, this era lasted. It became evident that a purely reactive approach was not long-term viable as rules became more and more stringent, leading to a significant increase in compliance costs (Azapagic and Perdan, 2000). Social and environmental concerns were first only taken into account when there was an economic reason, but over time they gained significance and emerged as pillars of sustainable development. In fact, businesses started to focus more on waste reduction and pollution avoidance in the second phase, which came to an end in the first years of the 20th century, adopting a proactive attitude (Azapagic and Perdan, 2000). This new action resulted from the recognition that more ethical production could result in cost savings (for example, greater utilization of raw materials) and savings (e.g. less risk of incurring fees due to non compliance with environmental regulations). Contrarily, the third phase is highlighted by a greater level of integration of environmental performance in company strategy (Azapagic and Perdan, 2000).

The rise in the number of large corporations issuing an annual environmental report is a sign of such tendencies. The quality of the reports, however, is a separate matter because greenwashing is a frequent phenomenon because it improves a company’s reputation. This tendency is a result of how interconnected the modern world is becoming. Public opinion is crucial for the survival of the company in the social media age because communication moves so quickly and a news story can go viral in a matter of hours. Negative public sentiment may result in major repercussions, such as boycotts.

Some elements have helped to increase public awareness of sustainability and encourage firms and MNEs to adapt how they do business. Massive communication campaigns run by NGOs actually brought the bad behavior of several firms to light and sparked huge public protests. Examples include the campaigns against Nike’s pay and working conditions in developing nations, the criticism of McDonald’s for allegedly engaging in a number of unethical practices like purposefully promoting unhealthy and risky eating habits, and the Shell oil company scandals, particularly those involving the Brent Spar and Nigeria (D. Henderson, 2001), which led the company to decide to improve its corporate image by implementing measures like codes of ethics and Triple Bot. When public scrutiny is excessive, businesses may suffer serious repercussions even when their actions are not actually harmful but are instead misinterpreted as such by some people. Consider the media frenzy Dolce and Gabbana experienced after expressing their opinion on adopting children from gay couples. Performance seems to be more closely correlated with a company’s reputation today than ever before. Businesses are constantly scrutinized, and any perceived misbehavior can instantly gain global exposure.

As a result, businesses must adjust to the growing demand for sustainable conduct because it is morally correct to do so as well as because doing so makes commercial sense and may open up new prospects for the company. According to Edwards (2010), who wrote the book “Rough Guide to Sustainability,” the global financial crisis that started in 2009 would present fresh chances for nations to rely on sustainable development to boost their economies.

he main actor has evolved along the path to the growing acceptance of sustainability among corporate priorities: up until a few decades ago, institutions were the main participants, but today enterprises are at the center of the implementation of sustainable development (T. Dyllick and K. Hockerts, 2002). Although it is widely acknowledged that sustainability encompasses the economic, social, and environmental components of a company’s influence, assessing it can be challenging, particularly when it comes to social and environmental concerns. Standard metrics for comparisons and rankings of social and environmental performance are exceedingly difficult to elaborate, and some people even believe it is not possible at all (W.Norman, C. Mac Donald, 2004).

Even though it may be disputed if some indicators and measuring tools are truly representative, standardized, and comprehensive, many have attempted to create them despite these criticisms. Corporate responsibility reporting and a code of ethics are the key tools used in this aim.

Codes of Conduct

A significant amount of literature tries to define codes of ethics. They can be defined as formal written papers that contain ethical rules and concepts that staff members are expected to follow, with the intention of influencing both individual employee conduct and organizational behavior (C. Yallop, 2012).

Ethical codes are frequently also referred to as operational principles, conduct codes, or codes of practice. Although they are frequently adopted, this depends on the country and the size of the company. Larger companies are considerably more likely to have a code of ethics than smaller ones (C. Yallop, 2012). However, there is a lot of disagreement regarding this tool’s efficacy. According to studies, codes cannot affect a person’s ethical behavior (Marnburg, 2000); yet, other authors contend that codes of ethics can result in gratifying outcomes (Schwartz, 2001).

Reporting on Corporate Responsibility

The great majority of businesses use the GRI (Global Reporting Initiative) standards as the most popular instruments for CR reporting (KPMG: Corporate Responsibility Survey, 2013). In order to enable businesses to convey their total non-financial performance to stakeholders, particularly in areas like human rights and labor standards, GRI developed criteria for creating reports that should seek to be transparent and comprehensive. The KPMG Corporate Responsibility Survey provides some information regarding the quality and extent of CR reporting implementation. The 100 largest businesses from 41 different nations make up the sample of enterprises that were interviewed, totaling 4,100, providing a solid enough foundation from which to draw generalizations. According to the most recent report published in 2013, Latin America saw considerable improvements and CR reporting rates in Asia Pacific saw a large increase from 2011 to 2013.

According to the data, 71% of the 4,100 organizations reported, and if we focus on the top 250 Fortune Global 500 corporations, that percentage rises to 93%. Additionally, 51% of reporting businesses globally include CR data in their annual reports. This is a significant improvement over the past, when these figures were only 9% in 2008 and less than half of the real ones in 2011.

The number of businesses reporting across the different industries is converging, and the gap between the best and poorest performance is closing. However, when we look at integrated reporting, only 10% of the participants provided integrated reports, the numbers are much less encouraging. What if we consider the reports’ overall quality? The 250 largest corporations in the world were the subject of an analysis by KPMG, which assigned a score based on a set of metrics that are detailed in the report.

According to this data, the average quality score is 59 out of 100, with Europe performing the best overall. It should be emphasized that the value chain and supplier reporting are the two most important factors to examine when evaluating the overall sustainability of a product. For instance, even if a company that sells coffee practices extreme responsibility within its own operations, if it does not monitor or report on the working conditions of those on the plantations from which it purchases raw materials, the end result may not be at all sustainable. Governance and stakeholder engagement both have low values.

Reputational risk is the one that is most frequently mentioned (53%), which indicates that many businesses are concerned that disclosure may damage their reputation. On the other hand, the key prospects in CR reporting include the chance to innovate products and services, which is followed by the chance to enhance the company’s reputation and position in the market. This final fact may cause legitimate concerns regarding the greenwashing phenomenon.

Corporate Sustainability’s Business Case

In the twenty-first century, the field of sustainability known as the Business Case for Corporate Sustainability (BCS) has become increasingly popular. This idea seeks to justify the use of sustainability in business by, essentially, defining a link between financial success and social and environmental performance and evaluating the benefits that result.
Studies have been done on the topic, leading to various and perhaps conflicting viewpoints. One of the most well-known schools of thought is Friedman’s, which holds that a company’s main duty is to maximize profits. Sustainable practices just add needless expenses that have the consequence of reducing earnings (M. Friedman, 1962). He is not alone in believing that there is a bad relationship between financial performance and sustainability performance, while some hold the opposite view and argue that there is a good relationship.

One of the most well-known reasons in favor of this viewpoint asserts that a company’s reputation may suffer significantly if other stakeholders’ interests are not taken into consideration. Cornell and Shapiro assert that failure to satisfy implicit stakeholder demands may result in higher costs than anticipated, such as the recall of a subpar product. In reality, in addition to the withdrawal fees, the company will also pay “the cost of implicit claims,” as described by the authors, as a result of declining stock prices. (1987; B. Cornell and A.C. Shapiro). The same idea could potentially be applied to other implicit assertions, including using healthy ingredients in production or respecting workers’ rights.

The stakeholder idea appears to be supported by Preston and O’Bannon as well, who discovered evidence of a favorable correlation between financial and social success. Additionally, they imply that financial performance comes before or coincides with social performance, presuming some degree of linkage, and that either a strong financial performance offers the means to engage in sustainability or that there is a positive synergy between the two.

Instead, Lankoski (2000) found evidence of an inverted-U relationship by bringing together the two opposing viewpoints (i.e., a negative vs. positive relationship between financial and sustainability performance). His findings suggest the existence of win-win scenarios because the relationship between financial and sustainability performance can be either positive or negative depending on where you are on the curve. The function’s format differs across various industries and companies, sometimes evolving through time (L. Lankoski, 2000).

Salzmann, Ionescu-Somers, and Steger, however, cast doubt on many of the major research on BCS because of bias in the data, poor sampling, or overly narrow sector of study. Due to the intricacy of the subject, which depends on numerous factors like industry, country, etc., they also cast doubt on the effectiveness of the studies on BCS in assisting managers in making decisions. The final concern is that businesses will only take measures related to eco-efficiency and the reduction of operational risk because sustainability will only generate economic benefits over the long term (Salzmann, Ionescu-Somers, Steger, 2005).

Is It Important To Go Green?

Environmentally responsible behavior is not only a fad. Going green is also seen as the best option to deal with this serious environmental issue.

No matter their position or social standing, everybody may have a positive impact on the environment. The obligation to care for the earth remains the same as long as that person is still a living being on this planet.

Just like Korindo Group, they establish CSC (Corporate Social Contributions) with five main programs, one of which is eco-friendly actions. You, as a personal human being, also have to improve your life and the lives of people around you by taking eco-friendly action! Before going into the details, let’s explore more about “going green” activities.

Why go green?

One thing that we as humans can do to take care of the planet, which is so ancient, is to engage in “go green” activities.

The world is getting older, and it takes knowledge from us to change the flow of nature in order to make it more comfortable to live in, or at least get better again. The “go green” movement is how we show our awareness of and concern for the environment.

It is hoped that by following the procedures and upholding the key values, we will be able to contribute to the sustainability of the planet’s state.

The Goal of “Go Green” Activities

So, why are these “Go Green” initiatives so important? Okay, so this is predicated on the earth’s deteriorating state, which is quite serious.

Antarctica actually reached its highest temperature ever in early January of last year, as you may remember. This caused one of the icebergs or glaciers in Antarctica, specifically Pine Island, to recede and even collapse as a result of its presence.

Large amounts of water will be released into the oceans as a result of these glaciers melting. What would happen if all the glaciers melted, do you think?

In addition, water temperatures will rise, which will cause many seashells in New Zealand to be burned to death.

In fact, a lot of specialists believe that coral reefs will be extinct worldwide by the year 2100. In fact, all of these circumstances are quite concerning for future human life. Human actions are the variables that either directly or indirectly influence the occurrence of all these events.

What Activities Influence the Occurrence of All These Events?

Examples include wasting energy, chopping down a lot of trees, tossing trash, and others. You must already be aware of whether global warming has occurred or whether it is a result of climate change.

The state of the world and all living creatures on it, including people, are greatly harmed by this.

With these “go green” activities that Korindo Foundation has already started, we hope to encourage people to take action to stop global warming and get back to sustainable environmental practices.

Principles of Green Activities

Of course, the proper principles must form the foundation of any green initiative if you want the results to be successful.

As for how to put this into practice, there are three primary green business principles. This concept is applicable to everyone.

Reduce, reuse, and recycle is a notion that you must already be aware of.

  1. Reduce

In this case, conserving energy resources is the key to staying green. In this case, the word “reduce” simply means “minimize,” which indicates we must use fewer items in order to produce less trash.

By comprehending this idea, we can make better decisions when performing daily tasks. When shopping, for instance, we frequently use less single-use plastic or Styrofoam. Not only that, but this approach also applies to saving energy by shutting off electrical devices when not in use.

  1. Reuse

The word “reuse” means to utilize or reuse anything that has already been used. Don’t toss them out; instead, decide which materials can be utilized again. Check to see if the item you used can still be used. If so, use it once more.

In fact, doing this seems frugal, unattractive, and so forth. But I assure you that following the “go green” principle has additional advantages.

By decreasing trash, you will not only be more efficient because you won’t need to buy new products, but you will also have a positive impact on the environment.

  1. Recycle

Making something new out of used materials is what recycling is all about. By doing this, you don’t even have to waste new material, which leads to the accumulation of what you don’t need. For example, you can use your plastic bottle to make a plant’s pot (in this case, you don’t even have to buy a brand new plastic pot). This will indirectly lead you to engage in green activities that reduce the use of plastic in order to improve the environment.

Another good example of recycling principles is segregating plastic garbage to make it easier for plastic collectors to transport it to the plastic company. Then the plastics company can recycle the plastic and make new things with old plastic material.

This recycling principle will help prevent the making of new plastic material, which will eventually lead to a better earth.

Simple things to realize green activities

There are some simple activities that you can do to promote “go green” activities.

  1. Create a list of your meals.

These suggestions may appear insignificant. However, organizing the meals that you will prepare and eat will improve your quality of life. Make a list of the ingredients you wish to buy and write them down.

There’s no need to overindulge; the key is to consume enough food to last a day or two.

  1. Reduce the amount of plastic waste.

The biggest environmental issue today is without doubt plastic garbage. The land, sea, and air will all be contaminated by this non-biodegradable trash. In truth, the death of living organisms as a result of plastic garbage is not unusual.

By decreasing or turning plastic waste into products that can be used repeatedly, you can get around this problem.

  1. Limit your product purchases.

Limit the amount of anything you buy that you know will end up as plastic waste or other non-biodegradable rubbish. The DIY (do it yourself) trend is now being practiced more frequently. Without needing to purchase them in packaged form, you can produce a variety of items.

Well, those are all the discussions about “going green,” which Korindo Group has already started implementing in their five main CSC programs.

Speaking with Confidence Anytime, Any Situation

Your success depends on your capacity to communicate with an audience. Speaking well can make you more useful to your employer, earn you the respect and admiration of others, and attract the attention of those who can aid you and open doors for you. People who hear you talk well will also believe that you are more talented and intelligent than those who do not.

What is the most precious thing you own? your head Your capacity for clear thought and expression is one of your most priceless assets. As much as any other talent you can develop, this skill can help you earn more money and advance in your career more quickly. After all, the only way you can show that you understand a subject is by expressing your ideas and views in a clear and concise manner, both verbally and in writing. People often remark, “He really knows what he’s talking about,” when you speak well.

Your mind is similar to a muscle, which is excellent news. With use, it gets stronger and more effective. You become more alert and conscious of what you are saying and how you are expressing it when you have organized your thoughts and words in advance. Planning, preparing, and giving talks and presentations forces you to use your mind more actively, which really increases your intelligence.

Get rid of your fear and boost your career.

I once conducted a one-day executive effectiveness session for a group of businesspeople. I emphasized the value of speaking clearly and influencing others during the presentation.
A somewhat reserved businessman approached me at the conclusion of the day and said that, as a result of my remarks, he had resolved to become a better speaker. He was sick of being overlooked for advancements and neglected by his superiors.

I got a letter from him outlining his tale a year later. He had carried out his resolution right away. He joined a Toastmasters club in his area and started going to weekly sessions. Each member was forced to speak during each meeting on a specific topic, and at the conclusion of each meeting, they were each given a grade.

The technique of “systematic desensitization” is employed by Toastmasters. This implies that doing something repeatedly will eventually cause desensitization. You gradually get over your anxieties and reservations when you speak in front of others on a regular basis.

Additionally, he completed a 14-week Dale Carnegie course. He had to speak in front of his peers throughout every session. After giving numerous lengthy and brief presentations to welcoming groups of peers over the course of six months, the majority of his nervousness and anxiety about public speaking vanished. It was replaced by an increasing assurance in his ability to communicate with an audience.

Opening Doors for You

Approximately at this time in his growth and development, his engineering firm was dealing with a little emergency. One of the partners was slated to address the staff of a Korindo Careers company in a presentation. But due to illness, the partner was unable to attend the meeting.

The businessman’s manager requested that he develop and provide the company’s proposal in its place. He agreed to take on the task. He spent the entire evening and the next morning getting ready. After that, he went to the client’s office, gave a fantastic pitch for the firm’s services, and won the client over.

When he got back to work, his boss informed him that the president of the potential client had called to praise him for sending someone to make such a strong case for the firm’s offerings.

Within a few weeks, he was routinely dispatched to call on the company’s potential clients and prospects. He received one promotion before receiving another. He quickly advanced to senior management and was headed toward partnership. He claimed that after deciding to become a better speaker and taking concrete steps to achieve that goal, his entire life was transformed.

Boost your confidence

You will benefit from developing your public speaking skills in many facets of your profession. But there’s an even more significant reason to master public speaking. According to psychologists, the quality of your inner and outer lives is primarily influenced by your level of self-esteem, sometimes known as “how much you like yourself.”

The better and more effective you are as a speaker, the more fun you have. The more content you are with who you are, the more upbeat and assured you become. The more confident and approachable you feel about yourself, the better you interact with other people. You become healthier, happier, and more optimistic in all you do, the more you like who you are.

Boost your self-concept.

Speaking more persuasively helps you feel better about yourself. Your “inner mirror” is how you view yourself. It’s how you view and perceive yourself before, during, and after any experience.

Your performance will be more competent as your self-image improves.Prior to any event or activity, simply seeing yourself performing at your best will enhance your performance.

We are all extremely perceptive to other people’s opinions, sentiments, and especially their respect. “Everything we do in life is to earn the respect of others, or at the very least, not to lose their respect,” Somerset Maugham once said. Your audience will therefore like and respect you more when you talk well. As a result, you also respect and appreciate yourself more. Speaking well results in positive feedback from other people, which boosts your confidence. You have a more favorable self-perception and self-concept. You start to feel more powerful. You appear more certain when you move, talk, and behave.

You can improve your speaking skills.

The fact that public speaking is a skill that can be learned is maybe the nicest thing about it. Most people who can talk well today couldn’t lead silent prayer in a phone booth a generation ago. Many people who come across as confident and articulate in front of an audience formerly shuddered at the thought of getting up and speaking in front of others.

Being in the top 10 percent of communicators should be your aim. And you should constantly remind yourself that nearly everyone in today’s top 10% began in the bottom 10%. Everyone who is now successful was previously unsuccessful. Every master, in the words of Harv Eker, was once a disaster. Most likely, you have heard the adage “practice makes perfect.”

Some go even further and assert that perfect practice eventually leads to perfection. But the truth is that practice really does make perfect. You will make a lot of tiny and big blunders as you work toward mastering the art of public speaking. You’ll frequently experience anxiety and insecurity. You’ll forget to say the appropriate things and say the incorrect ones. You’ll stumble and mumble while questioning your ability to ever succeed.

Break free from your comfort zone.

However, in order to flourish in speaking or any other subject, you must be prepared to leave your comfort zone and enter your discomfort zone. If you want to ever reach a greater level of competency, you have to be willing to experience growing pains and awkwardness.

You may recall the tale of Demosthenes, a celebrated Greek orator who was regarded as one of the greatest speakers in ancient times.

He had a stutter and a speech impairment when he first started, and he was also apprehensive and hesitant. However, he was determined to talk clearly. He shouted aloud to the sea for hours each day while holding pebbles in his mouth to help him get through his challenges. He eventually got rid of his stutter and speaking impediment. His voice got stronger, louder, and more assured. He rose to prominence as one of history’s greatest orators.

This book will show you how to speed up the process of speaking with competence, confidence, and clarity if you are a beginning speaker. If you are a more seasoned speaker, this book will provide you with some of the most effective strategies, techniques, and tactics used by great speakers in every sphere of business, politics, and daily life.

The Four Ds of Excellent Speaking

You must possess the four Ds in order to be a great speaker.

  1. The wish. To communicate well, you must first have a strong, burning passion. Nothing can stop you if you want to improve your public speaking skills badly enough and for a long enough time.But having the desire is insufficient.
  2. Choice. You must decide right now that you will exert every effort, surmount every challenge, and go to any length to achieve excellence.
  3. Self-control. You must have the perseverance to repeatedly plan, prepare, and deliver talks and presentations until you master them. There are no short cuts to working hard to acquire a necessary skill.
  4. Enthusiasm. The ability to persist and persevere in the face of any temporary setbacks, difficulties, or humiliations is the last requirement.

Only you may set limits.

Our own worries and doubts are always our worst enemies. However, except for the restrictions you set for yourself, there are no restrictions on what you can do, be, or have.
I have given more than 4,000 talks throughout the years and personally addressed more than 5,000,000 individuals in 46 different countries. I’ll take you by the hand and walk you through the process of developing the courage, confidence, and expertise necessary to be a persuasive speaker in any circumstance in the pages that follow.

Why Do Businesses Go Green?

Nowadays The idea of sustainability is becoming more and more popular, though it is still developing. The role that sustainability plays in the corporate world is being evaluated from a variety of perspectives and ideologies, some of which can be at odds with one another. This work assumes a managerial perspective that focuses on advantages and disadvantages and begins with the question, “Why do companies go green?” It then conducts an analysis of papers dealing with trade-offs in sustainability adoption, aiming to provide a thorough view of the key issues identified by the theory. To test the idea empirically, a final confrontation with the data from a sample of automotive companies’ SEC filings is made.

The term “sustainability” has grown in prominence over the past few years in the corporate world. However, there is still debate over what being sustainable means for a business and, perhaps more crucially, what the repercussions are. There has been a great deal of thought generated on the various facets of sustainability, including questions about whether or not businesses should feel accountable for their social and environmental impact, how sustainability should be implemented, and what the ramifications of going green are.

This study focuses on this final element and makes an effort to comprehend the business case for adopting sustainability while outlining the challenges and opportunities a company will encounter in addressing the issue. The employment of theory, however, often tends to be generic, losing the potential to offer deeper operational indications, in order to be adaptable to diverse sectors and gather the entire dynamics. Starting with a broad overview of the key sustainability ideas, this study will explore theoretical papers before contrasting them with comparatively objective evidence obtained by evaluating official reports that give hints concerning business purposeful strategies. All of the companies examined belong to the same sector in order to create a meaningful sample for the analysis.

The purpose of this comparison is to evaluate how well theory can account for reality and offer practical insights.
Conclusions show a partial separation between theory and corporate evidence, both in terms of the aspects highlighted and descriptive power. Additionally, there are notable variations between the deliberate techniques employed by the companies under consideration.

8 Tips to Help Boost Your Career

Every employee wants to develop their career. In fact, quite a few of them are working hard to advance in their careers faster. Naturally, there are a number of things that must be done to support such a career structure. Typically, you must reach the company’s established goal.

You must also keep working hard to complete tasks so that your performance review will be improved. Actually, you have the chance to think about some work-related advice to help your career go more smoothly.

Workplace Advice for an Easier Career

To reach the goal, diligent effort is required. You must, however, also consider a few significant factors. Taking health issues as an example, professional advancement. Additionally, this will significantly affect your odds of producing greater hard work results. Here are 8 easy-to-implement work tips for a more successful career. Check these out!

Establish The Intended Professional Path.

Work tips for a smoother career typically begin by identifying the intended objectives. Try to find a position that is seen as highly excellent if you truly want to develop your career. Using this strategy will make it simpler for you to estimate how long it will take to reach the goal. You must also be aware of your capacity and skills to contribute significantly to the career itself.

Continue To Look After Your Health.

Additionally, you must keep up your health. Today’s workforce frequently puts company goals ahead of their own health. Actually, that would have a really negative effect. Workers that favor working overtime above making the most of their downtime, for instance. You will suffer injury, of course. If you are sick for a long time, you risk losing the chance to advance in your career. In fact, doing this will lower your performance.

Set Goals To Inspire Yourself.

Making the goal an incentive, rather than a burden, is another work advice for a more successful career. Some employees frequently make the company’s goals a burden. Even though it can be a stepping stone for you to get a better job. Make the goal your source of inspiration so that you will be inspired to pursue the position. Actually, this will ease your mental strain for a considerable amount of time.

Seeking Motivation To Remain Focused

Of course, concentrating on all of your tasks is another issue to take into account. To support the intended work outcomes, you may also employ the best inspirations. This motivation typically stems from your boss’s achievement in obtaining that job. Additionally, you must make the most of your leisure time to maintain your concentration and finish all of your obligations. Companies will take your career into account when you learn in this way.

Enthusiasm And Tenacity

To make it easier for you to obtain a better work position, increase your enthusiasm. It will be challenging to do without a positive attitude. In fact, having this spirit can help you deal with a variety of issues that could potentially hinder your job in the future.

Ability To Communicate

It is important for humans to communicate. The foundation of your business might also be strong communication. It will be challenging for you to grow your work connection without greater communication. whether it be with coworkers, bosses, or even clients.

Maintain Your Education

Regret always follows. Many professionals regret that they waited too long to pursue further education. Because of this, their career was unmoving. unable to advance to a higher level. This is due to the fact that many businesses make education a requirement for promotion.

Start exploring for the top colleges and universities that offer classes to working adults. Make sure the major you pick will benefit your career and is something you are interested in. Additionally, you could learn about this from a coworker friend. You might be eligible for a scholarship that will allow you to save money later.

Develop Broader Connections

Some folks frequently forget this. In the realm of business, relationships are crucial. Building ties in the largest professional community is necessary if you want to experience a career and income leap. Please go to the in-person forums. LinkedIn and other social media platforms can be used to increase your network.

Those are 8 tips to boost your career in a company. Hope it help!

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