Chapter 46 Corporate Citizenship and Corporate Governance

Why is it necessary for an enterprise to better fulfill its corporate citizenship responsibilities and obligations as a corporate citizen? One point of view is that it is very necessary, because the global economy and free trade connect everyone together, so you can't just control yourself, you must pay attention to your stakeholders, otherwise he will retaliate against you, such as unhealthy food and bad food It will kill people and cause bad influence, and your company's products will not be sold.Many studies have proved that the better the corporate citizenship responsibility is fulfilled, the higher the business performance will be.

There is also a point of view that many companies have done a good job in fulfilling their corporate citizenship responsibilities, but they have not seen any improvement in corporate performance, only seeing the continuous increase in management costs.If this is the case, it will cause two problems: on the one hand, the company’s profitability will decline, and the interests of shareholders will not be guaranteed; on the other hand, employee benefits will decrease, making it impossible to fulfill internal and external responsibilities of the company. But recently there is a particularly interesting study: companies such as Motorola, Nokia, General Electric, and Goldman Sachs do a lot of corporate citizenship efforts in China every year, and require employees to actively participate. The researchers concluded that it is difficult to say that corporate citizenship and management There is no direct relationship between performance, but it is hard to believe that there is no relationship.These enterprises advocate that the company should pay special attention to civic responsibility in management, so as to enhance the company's business scale and development space in a certain region.

At present, there is no mathematical model to quantify whether enterprises can better fulfill their responsibilities as corporate citizens. There is only a qualitative statement and a moral statement.Generally speaking, fulfilling the responsibilities of a corporate citizen is not a quick-acting heart-rescue pill, but a health product. It does not mean that you will live immediately after eating it, but it must be helpful to your body if you often eat caterpillar fungus and bird's nest.Therefore, it is recommended that you should take these "health products" regularly as long as you have the conditions, and keep them by your side often.

However, when a company fulfills its corporate citizenship responsibility, it has a lot to do with corporate governance, and many people don't pay attention to this matter.For example, in the year when the flood occurred, many enterprises responded positively.I remember that many private companies donated millions or tens of millions at that time, some were listed companies, some were limited liability companies, and the process of their donations did not go through a legal procedure, which is strictly speaking illegal.Why is it illegal?You must get the approval of the general meeting of shareholders to donate any share of shareholder property. If the general meeting of shareholders does not agree, according to the "Company Law", the legal representative makes his own decision to donate other people's money, which is called embezzlement.It cannot be said that I can steal to fund Hope Primary School. I asked a lawyer and it is still against the law. The crime of theft must be caught and sentenced.

Even a corrupt official was in such a "difficulty". He took other people's money to do good things, so the Central Commission for Discipline Inspection said that I only investigate cases, and you should go to the Central Propaganda Department to praise him.In fact, during the "SARS" and "Tsunami" times, and when there was a flood, many private enterprises donated money without going through legal procedures, and it was very random.After the donation, there are two situations. One is that the statutory procedures cannot be passed, and the shareholders do not agree, and in the end they can’t really pay for it. Ask the government for tax breaks.Turning a good deed into a temporary impulse, our domestic private enterprises have a big common problem in this regard.Conversely, why didn't Western companies respond so quickly at this time?You can't say they are irresponsible, they publish corporate citizenship reports every year.And those of us who donate millions or tens of millions of private enterprises have never had a corporate citizenship report.These multinational companies usually have requirements for their employees, asking how much time they should spend on participating in public welfare undertakings.I found that the difference is that the good deeds and corporate citizenship responsibilities of domestic private enterprises are in the belly of the boss. The impulse of the boss has nothing to do with the company, the company's daily behavior and corporate governance. It is purely a personal matter of the boss. The boss weighs his business interests, his relationship with his surroundings and moral pressure to make an impromptu decision.

But in the West, multinational companies regard this matter as a part of corporate governance, a content of the entire corporate governance, and one goal in corporate governance is to fulfill the responsibilities of corporate citizens.This brings up a couple of particular differences. First, they have a long-term philanthropic strategy to determine the focus, methods, talents and funds of their philanthropy, rather than a matter of a certain leader adapting to the situation. Second, the implementation of all their public welfare strategies has gone through the decision-making process of the board of directors and shareholders' meeting, and fulfilled the necessary legal procedures.For example, how much money is allocated to the public welfare fund every year, which must be approved by the board of directors and the general meeting of shareholders, and then a budget should be made, and this step should be implemented every year.

In this case, if an earthquake or flood occurs suddenly, the procedure for the company to readjust the budget is relatively complicated.For example, when the tsunami in Southeast Asia came, you may be asked to donate soon, but the procedures and constraints cannot be changed casually, and the budget cannot be changed temporarily. There must be a set of procedures to evaluate who the money should be given to, so the charitable deeds of multinational companies are often a little slow to respond , but they ensured that doing good deeds and public welfare is done under legal circumstances, rather than doing good deeds illegally.

Third, they emphasize the participation of all employees when implementing public welfare. The focus is on employee training and the cultivation of values. They have done a lot of work and put a lot of effort into employee training. At the same time, they give employees time to promote according to the public welfare strategy. Employees do their own favorite public welfare, making it the value orientation and code of conduct of employees within the company, rather than the boss's business alone. Under such circumstances, the responsibility of corporate citizenship can be better fulfilled.

There are several reasons why such a situation occurs in the country. The first reason is that regarding the matter of private property rights, not to mention ordinary Chinese people, including government departments, and many private bosses, they do not respect other people's private property rights enough.For example, the boss of a listed company only owns 30% of the shares. If you donate the money all at once without holding a general meeting of shareholders, it is tantamount to infringing on the rights of other property owners. The second reason is that China is a pan-moral society.For example, if someone does a good deed and donates 10 million yuan to water control, no one will pursue his legal issues, including shareholders and society.The West is a legal society. No matter what moral good thing you do, you must first be legal in law before you can do good.It's not what we often see, as long as he is a good person, he can forgive everything, and everyone sympathizes when he commits a crime.However, facts are the basis for conviction. It doesn't matter whether you are a good person or a bad person before the law. As long as there are facts, a crime is a crime.These are two cultures.We have noticed the difference, and we should put more emphasis on doing good according to the law.

The third reason is that the legal environment provided by the government for us to fulfill our corporate citizenship responsibilities is not yet perfect.For example, you want to register a public welfare fund and want to fulfill your civic responsibility for a long time, but the government has set up many restrictive procedures in terms of registration just like approving a private enterprise 20 years ago.I have a friend who registered a 100 million public welfare fund. He took the money to the Ministry of Civil Affairs. The Ministry of Civil Affairs was fooled. What does this person want to do with so much money?In the end, this matter was reported to the State Council, and finally approved by the Vice Premier of the State Council.This friend spent a year and a half registering and going through the procedures to do this good deed, as if doing something to make money, he had to sue this, beg that, and finally get approved.So in our legal environment, this aspect is not perfect, including the issue of tax rebates brought about by your charitable donations, which has not yet been well resolved.At present, only the six public welfare funds designated by the state are eligible for tax refunds. I hope that everyone can donate money there, divide it from there, and finally come back to refund.This is tantamount to blocking the channels for others to do good.In fact, the imperfect legal environment has inhibited everyone's enthusiasm for establishing public welfare funds, and has also caused the whole society, including private enterprises, to have an immature understanding of actively promoting civic responsibility and participating in social public welfare activities, resulting in some deviations in behavior and moral injustice. Misunderstandings and negative comments in society.