Barclays Plc Accountability - Case Study Example

BARCLAYS PLC by Student’s name Professor’s name University name City, State Date Accountability of Corporations The theory of corporate accountability is the lawful duty of a corporation to do what is right (Michalowski 2014). As such, the corporate accountability’s objective is ensuring that the business’ operations and products lies on the wishes of the community and are harmless. This hypothesis tackles the predicaments of the corporations that intentionally fail to act responsibly (Michalowski 2014). Also, it addresses circumstances within which workers and corporations are enslaved by the economic system’s competitive demand and compelled to select the end result. In particular, corporate accountability is pertinent to the present circumstance of augmenting fiscal globalization and the exceptional state multinational corporations that within several cases are unaccountable to none (McBarnet, Voiculescu and Campbell 2009). Corporate accountability is a civil society and government’s obligation. The corporate accountability theory requires essential adjustments to the lawful milieu within which corporations function. The changes comprise of placing social and environmental obligations upon directors to harmonize subsisting roles on fiscal issues, and authorized rights for the local communes (Holzer 2010). That is in order to facilitate demand imbursement by the local populace after suffering due to the directors’ failure of upholding those obligations. Rather than begging corporations to voluntarily offer an explanation of their impacts and activities to enhance their ecological and social performance, the company accountability group deems corporations ought to be held accountable (Holzer 2010). That implies enforceability. That becomes a further radical stance than that advocated by the CSR (corporate social responsibility). For many years, local stakeholders and NGOs all over the earth have battled multiple campaigns against corporations over particular affairs (McBarnet, Voiculescu, and Campbell 2009). A number of times companies have been taken to the courts. Renowned cases have stemmed from the US ATCA (Alien Tort Claims Act) decree requiring imbursement for the environmental debts or ecological liabilities that the firms have left behind. Consumer crusades have convinced shoppers to purchase bananas, organic coffee, GM-free food, and tea among others that have been endorsed as maintainable by the Forest Stewardship Council (FSC) (Smith 2014). That is referred as Green Consumerism. From an outlook of corporate accountability, voluntary CSR and green consumerism rests a focus upon the individual firm and the consumer. The outlook overlooks the environmental justice and social issues for the communities (Morgera 2009). NGOs assert that if seriousness exists concerning environmental and social justice, surely, the moment of mainstreaming ordinary standards on ecological and social performance has arrived. In order to achieve that, the legal framework requires amendment in order to permit citizens to hold businesses responsible for environmental and social malpractices. The companies that act unethically are liable to fines from the authorities, laws and spoilt repute (United States et al 2011). An effective tool for alleviating risks is corporate governance. External stakeholders and internal management of firms have built up augmented focus upon lessening the jeopardy of conducting business within an endeavour to obtain a reasonable gain (Crane and Matten 2010). As such, a decreased risk yield lessened costs and improves the capability of an organisation to contend within the marketplace. Both shareholders and consumers of services and products offered by companies have realised augmented consciousness of environmental and social issues (Holzer 2010). Desires from the majority of consumers have persuaded businesses to concentrate on putting up with minimum pessimistic externalities. As prominence on responsibility has developed, the desire for increased company governance has recently grown considerably. Graph showing how Boeing has cut jobs from 2013 making citizens to hold it accountable for what they were promised Main Arguments for Corporations being Accountable to (i) Just their Shareholders, and (ii) a Wider Range of Stakeholders First, the toughest dispute asserted by individuals who advocate shareholder superiority is that a firm belongs to the shareholders (Allsop 2012). Thus, the directors possess an obligation to perform according to their best wishes. This means searching for a lot of profits as would be possible. As such, modern companies are believed to exist to make money for their shareholders only. On that ground, the entire powers which are given to the directors can only be exercised merely for the shareholders’ gain (Adams 2013). Directors are the company’s trustees and thus they possess a fiduciary role of using their powers for the shareholders’ benefit, not including any other parties. Milton Friedman enhanced the shareholder dominance concept when he cited that owners of firms are the shareholders and thus social responsibility of shareholders is to boost the business’s proceeds (Mansell 2013). The theory’s bottom line is grounded on the notion that shareholders devote capital in the corporation which is utilised to buy the corporation’s assets. However, a contrasting dispute to shareholder primacy hypothesis exists. The theory asserts that, in fact, shareholders never own companies, but they rather own a kind of security within the firm which is normally referred as shareholdings (Friedman & Miles 2006). The disparity within the ownership’s form is large as it could restrict the rights which a shareholder possesses relative to the corporation. Also, the disparity could restrict the shareholder’s capability to be regarded before other legal consideration, particularly those regarding stakeholders (Zadek, Evans & Purzan 2013). The trustworthiness of this argument is augmented the moment the shareholders’ rights get investigated in bigger profundity. Shareholders never possess the right of exercising control over assets of the company. Moreover shareholders do not have the right of withdrawing dividends from their conglomerate. Furthermore, the influence that they possess over the firm is circuitous and reduced to being virtually insignificant. The shareholders’ directions are not obeyed by directors because they possess an attribute of carefulness as to the manner they operate the business. In addition to this, they have considerations that they bear in mind and execute. Also, a moral argument emanates from the perception that an attempt to operate corporations for the advantage of other parties apart from shareholders is a barefaced property rights’ violation (Allsop 2012). As such, it would not be moral for corporations to operate their businesses within that manner. On the contrary, it is debatable that as the corporations’ size increases, they possess a bigger authority of harming the society (Keay 2012). Thus, operating a firm has become more of a public profession instead of a private issue. Successful companies cannot make resolutions grounded upon private contemplation for example, what interest shareholders the most, since there is an augmented obligation of social responsibility that should be tackled. On the other hand, stakeholder concept is in multiple channels pro-shareholder. As such, it persuades the managers to elucidate their mutual opinions on the company’s purpose together with the value’s sense they suppose it ought to possess. The stakeholder’s theory goal is offering gains to every stakeholder including the shareholders of the corporation. The stakeholders’ theory suits the theory of Rawl of fair play (Adams 2013). His theory asserts that within a scheme, like a corporation, gains are dependent on everybody’s participation, though co-operation suggests that a few parties ought to make voluntary contributions. The theory points out that, if all individuals co-operates without having the free riders, profits would be maximised. If the theory is implemented in a corporation law, it interprets that no stakeholder faction requires preferential treatment (Freeman, et al 2010). Instead, all parties are viewed as the company’s stakeholders who sacrifice themselves and are under commitment of that firm. Therefore, they are all entitled to an equivalent sum of the returns (Maleshin 2014). The German legal system and economy has adopted the stakeholder hypothesis. As such, the German economy won over the downturn in the 90s using the theory. Though economic instances have been employed, financial systems are not greatly dissimilar from companies (Solomon 2007). It is impossible for a business organization to stay in seclusion from the community because its success and survival is dependent on its society’s understanding. Companies such as AES, Amazon and Google all function under the stakeholder technique of administration and so employ methods to modernize themselves upon present societal opinions (Owen 2010). The truth that those companies flourish during challenging economic moments proposes that stakeholder hypothesis is efficient within business. As such, it is not harmful to earnings as shareholders’ advocates propose. Graph Portraying Shareholder Return The modern corporations’ success is dependent on their capability of recognising they possess an obligation to society that is best accomplished by performing upon the responsibility their stakeholders owe them. Identification of Barclays PLc’s Three Key Stakeholders and their Main Requirements. Reasons for Engaging with Stakeholders and Examples of the Conflicts and Ethical Decisions which Management Might Face in Doing So The first key shareholder of Barclays Plc is customers and clients (Barclays 2014). The first requirement is trust and safety of money. As such, the clients and customers require Barclays to be a dependable financial institution where they can seek sound advice anytime they require it. Additionally, they require their information to be kept private and confidential. Moreover, customers and clients require assurance that their money is kept safely (Barclays 2014). As such, no customer expects to lose money over the counter, online, phone and through electronic means. Customers and clients require Barclays to ensure that all the transactions involving money are safe and guaranteed. They also require the bank to provide their money anytime they wish to withdraw for personal or other uses. The other requirement is information (Barclays 2014 p. 345). As such, customers and clients require to be informed of the changes or anything new that the bank has undertaken or plans to undertake. The other requirement is accessibility (Barclays 2013). As such, customers and clients require making easy contacts with the bank at anytime. In addition, clients with special needs require facilities that make them to access the banks. Moreover, they require effortless availability of current accounts in order to make their transactions. The other requirement of customers and clients is provision of quality services (Salz 2016). As such, customers demand instant services whenever they do business with the bank. They also require immediate feedback when they have queries. The other requirement by the customers and clients is social, digital, voice and self-service means of interacting with the bank (Salz 2016). As such, customers and clients requires the bank to provide live chats, web self-service, and contact phones among others to solve problems that might be affecting them. The other requirement is provision of financial information. As such, customers and clients require that they are given fiscal information which has been prepared according to the most excellent practice standards (Barclays Africa 2014). The information is anticipated to be adequately inclusive. The other stakeholder is colleagues (employees and trade unions). The first requirement of colleagues is a healthy and safe working environment (Barclays 2014). As such, colleagues require feeling that they have a sense of belonging to the bank and that their problems are solved professionally. They also need to feel protected by the bank when conducting their operations. The second requirement is working in free harassment and bullying environment (Barclays 2014). As such, all colleagues demands to be handled with respect irrespective of their age, status, sex, religion, and race among others. The other requirement is equal treatment. As such, colleagues require to be offered same treatment while working in the bank. They expect that there no employees who are offered preferential treatment while discriminating the others (Barclays 2016). Additionally, they demand no roles should be considered as more important than the others. The other requirement is recognition and celebration of colleagues’ achievements. As such, colleagues need to be applauded when they successfully accomplish something and encouraged when something goes the wrong way. The other requirement of colleagues is respect of the views. Colleagues desire to air their views on various issues in the workplace and expect to be listened to. On the other side, colleagues demand to be offered views of the others including those of the top management. The other requirement of employment is sustainable remuneration (Barclays 2016). As such, colleagues need to be given competitive salaries that would enable them to meet their daily needs and continue serving in the bank. Colleagues performing similar roles and possessing similar qualifications and experience expect to be paid equally. The other requirement of employees is training and development. The banks’ employees demand to be offered fresh training in order to improve their skills and continue offering quality services. The other stakeholder is the community (Barclays 2014). The first requirement is respecting human rights. As such, the community demands the bank to function in line with the Universal Declaration of Human Rights and the correlated International Bill of Human Rights and respond to other globally accepted human rights principles (Barclays 2015). Thus, the community expects the human rights to be respected and acted upon fully by the bank. The second requirement of community is the bank to respect the environment. As such, the community anticipates the bank to manage, prioritise and identify both direct and indirect environmental risks (Barclays 2014). Direct risks include and not limited to disposal and resources’ use within the banks’ operations while, indirect risks comprise the risks stemming from the supply chain among others. The other requirement is community investment. As such, the community demands the bank to utilise its financial expertise and skills in assisting individuals work towards fiscal independence and safety (Salz 2016). The other requirement is anti-corruption and anti-bribery. As such, the community demands the bank to conduct activities that are free from bribery and corruption. The other requirement is being politically neutral. As such, the community requires the bank not to engage itself in political activities of any nature. The bank is not expected to provide funds to be utilised for political functions. Barclays bank requires engaging with stakeholders because the engagement results’ notify key deliverables and strategic priorities (Barclays 2014). The challenges and inputs pointed out by stakeholders helps in forming and authenticating the bank’s strategy and business conduct in the market within which it functions. However, the bank might be faced with conflicts while engaging with the stakeholders. The first conflict that might arise is customers and clients demanding a reduction in the banking services’ costs. As such, it might be dangerous to reduce the costs of banking services at a certain moment since the bank might incur heavy losses. Importantly, reducing such costs might make the bank to be closed down due to insufficient availability of funds. Additionally, reducing costs might make the bank to lay off some employees in order to remain in operation. The management would be faced by ethical decisions in an attempt to decrease the banking services’ cost. The ethical decision to be faced by management would be whether to reduce the banking services’ costs and dismiss some employees. It is unethical for the bank to fire employees without valid reason (Menzel 2009). The other conflict that might arise in engagement with stakeholders would be during the recruitment exercise. As such, senior managers might compel the recruiting team to hire some employees from their families or friends. During the recruitment period, the hiring team might be looking for the most appropriate talents for the vacant positions. If the hired individuals would not perform as expected, the recruiting group would be held accountable. That would create conflict in the organization since the vacant jobs would require merit and not nepotism in filling them. As such, the management would also be faced with ethical decisions on that matter. The ethical decision would be whether to employ the best talent or known friends/family members in the bank. It is unethical to recruit employees on the grounds of nepotism while there are qualified individuals who can perform better in different roles (Cihon and Castagnera 2011). The other conflict that might arise would be setting the salaries of top management employees. As such, the top management might demand hefty salaries while junior employees would be paid peanuts. The stakeholders would demand an appropriate salary that top managers would not feel being satisfied with. The management would be faced with ethical decision of putting the appropriate figure for the salary. In fact, it is unethical to offer big inappropriate salaries to some employees and provide small unjustified salaries to other employees in the same organization (Cihon and Castagnera 2011). Current Pay of the Highest Paid Executives I do not consider the current pay of the highest paid executives of the bank to be appropriate. That is because the executives decided what they would be earning without first asking the stakeholders. As such, they set high salaries which do not really mach their roles, qualification and experience. They exaggerated their roles in order to gain the maximum possible salary. Examples of Executives’ Remuneration Proposals to Expand the Company and Two Risks to be faced in Eastern Asia Eastern Asia enjoys free market economies. Therefore, it would be a viable destination to expand operations. However, the expansion would be faced by two risks. The first risk would be the exceptional business culture (Gaston2016). As such, non-Western political beliefs and exceptional business cultures within East Asia increase protectionism towards the local economy, specifically within Japan and China. The government’s interference within the private sector is capable of hindering business contracts, wearing down partnership steadiness together with pressuring foreign corporations to integrate domestic interests within their home partnerships. That would be managed by Barclays adapting to the specific business ethics within Asia as well as acclimatize to the weighty business and political clout’s correlations which can affect their market feat. Additionally, Barclays would weightily invest in growing its private corporate culture. The other risk would be dissimilar legal systems (Harvie, Narjoko and Oum 2015). The lawful system in some countries heavily limits the foreign companies’ operations. For instance, some authorities allow counterfeit products and technology theft since intellectual property safeguard is highly restricted (Harvie, Narjoko and Oum 2015). Fortunately, that would be managed by Barclays Plc developing creative services and products that would differentiate it from the contest and thwart technology and intellectual robbery. Bibliography 2014, Barclays Africa. Retrieved 4 May 2016 . Adams, C 2013, How Stakeholders Drive Accountability in Corporate Sustainability Reporting. Retrieved 4 May 2016 . Akinpelu, OA 2011, Corporate Governance Framework in Nigeria: An International Review. Bloomington, IN: iUniverse. Allsop, L 2012, Should Companies be run purely to Serve the Interests of Shareholders? 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