Global Business and Corporate Accountability Standard Issues Globally

Question: Discuss about the Global Business and Corporate Accountability Standard Issues Globally. Answer: If we talk about what is Triple bottom line(or TBL or 3BL) - it is an accounting framework which has the following components: - Social - Environmental (or Ecological) - Financial This TBL framework is used to evaluate performance in a greater business value. It connects to profits, planets and people. Profit: The profit which is very important for the parent company and shareholders. APP is very much accountable in terms of this to all their shareholders and stakeholders. And due to the illegal activities they are very much affecting the kind of profits they are generating. And thus there TBL should be considered while doing such activities. People: The people have been affected by the APP because of the forests fires and other environmental issues they are creating. They are accountable to the Government of countries like Singapore and Indonesia because of the activities they are doing under jurisdiction. And thus they need to maintain the position in the market. Also they are so very accountable to the citizens of the countries they are operating in. Thus the kind of pollution they are creating and spreading in the places is harming the citizens and thus they should see to it that another component of their evaluating technique of TBL is very much getting affected by the practices. Also instead of looking and measuring the greater business value through this framework, they are affecting the natural environment a lot. This brings us to another dimension of environment and our planet Earth. They are even creating a bad image in front of the employees of their company only. Planet: They are damaging the eco- system in excess. With the environment of the planet which is now full of air pollution, this has created a bad natural environment. The haze environment is creating bad surroundings for people and thus its damaging every possible thing and making it weaker. The stakeholders here our own planet and thus this is an issue to be worried about. The effect has been so bad that the victims are not in condition to file a lawsuit against the company. APP should be aware of the way they are working under the heads of profit, people and planet as the company is under a societal framework which is on this planet earth and this TBL Technique covers all the possible stakeholders which get affected through your activities. And as far as their own business is concerned, they are having a lot of issues which is affecting their parent and subsidiary companies, affecting their hard earned goodwill even. 2. a. Relationship for all companies Answer: The search with Acra had revealed that three directors connection with three directors. Even the APPs secretary was part of the limited liability company Audit Alliance which was appointed as the auditors. The toy making company Mattel has also been attached as they were cutting APP- made packaging out of their supply chain. The company groups like Sinar Mars have been the biggest groups which are linked to APP. And through this only other big companies are getting top investments. Investors have funded the other five Singapore-listed firms controlled by Sinar Mas with $4.3 billion of loans and bonds. This has been such a great loss as they have been funded and they are related to APP creating new avenues for various issues. This has even helped the Widjaja empire to reach a market value of US$7.5 billion (S$10.7 billion) on the stock market indexes which was compiled by Bloomberg in the month of May. Under the Singapore Company Sinar Mas, it includes the following: Second-largest palm oil producer which is Golden Agri The coal miner Golden Energy and Resources Investment holding company Bund Center Investment Lifestyle developer Top Global. b. Do you think Singapore has right to prosecute the foreign company? Singapore has power to prosecute the co.? Answer: Transboundary Haze Pollution Act (THPA) is one such act which can actually make APP land into a problem. This act has been released to deal with Transboundary Haze. If we talk about the foreign companies, this act of THPA even goes beyond the Singapore limits and this will help the country to deal with the problem of pollution a lot more. This is for the very first time that Singapore has begun legal action. This will be a litmus test for the companies to actually respond to it. Also this will be an effective measure for actually punishing the companies which are doing illegal fires in forests. If there is no coordination by Indonesian government then it will not do any good. If this act doesnt work, there will no work for the country. Sinar Mars needs to be taken in account for the kind of work their subsidiary is doing. The Government is very much responsible and should act because privatization is something when a company operates in country boundaries they might be allowed under privatization but still the effect is coming on the public where the government comes in picture. And its their responsibility to save the citizens when a private company might be making Monet but is affecting the society and doing no good of greater value. But in the end the Indonesian Governments non participative nature, this law is not being practiced properly. Even the law can take in account many companies outside the Singapore boundaries but the political nature of this issue is very intense. Thus cutting long and shot- Singapore has the right to prosecute the company because of the act discussed above and moreover it goes beyond the boundary. They even have the right to prosecute the company. In legal terms, they can actually prosecute but is useless without the cooperation of Indonesia. We have this act but we are not able to do the same because there is less of cooperation. Thus we have hampered by all this processes but to answer the question they can prosecute the company under THPA. This act is very important because it covers all the wrong doings of the company which do bad to environment. 3. Agency Theory for this company The Agency theory for this company is as follows: Theagency problemis a kind of conflict of interest which may be due to any relationship where we have one party is anticipated to act in others best interests. The agency problem when talked about in corporate finance and in this case is usually refers to a kind of conflict of interest between a company's top level management and the stockholders. Here the principal will be the shareholders and the agents are the management. Here the agent is doing something which is not acceptable by the principal. The case of APP has a lot of problems related to Agency problem. The agents here are creating a lot of issues for the principals- pollution, firing forests etc. In the short run they are making profits and they might even provide them the profits but in the long run they are hurting the principals by creating a bad natural environment around them which is full of pollution. APP was boycotted by the Singapore companies because of the kind of work they were doing and this is certainly in interest of their principal- shareholders. The other companies were doing their level best to make sure that in long run they make profits instead of making profits in just short run. The agency problem here is to make sure that the Principals who will always be our shareholders should not get affected on the long run or short run because they are the ones who have helped the company to come this far. Also the company should be working in order help the shareholders. APP is very much accountable in terms of this to all their shareholders and stakeholders. And due to the illegal activities they are very much affecting the kind of profits they are generating. The company has gone to such a level that the victims of the haze pollution are not even complaining about them as they know this will dig their pockets deeper and will cause a lot of trouble to them. Also the kind of relation the company has in politics and their top position. The shareholders are very much aware of the difference between the haves and the have-nots in the litigation. Thus here we have the direct problem of the issue of agency problem because the principals here have some other requirements and the agents are working in self-interest and profit making only. Thus APP should make sure that they are in align with their principal and working like agents who give them a proper return.