CIMA BA4 · Chapter 8 · Question 9 of 10
Under English law, section 172 of the Companies Act 2006 requires directors to promote the success of the company for the benefit of its members as a whole. Which of the following must directors also have regard to in doing so?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) The impact of the company's operations on the community and the environment
Explanation
Section 172 lists factors that directors must have regard to, including the long-term consequences of decisions, employees' interests, relationships with suppliers and customers, the impact on the community and the environment, high standards of business conduct and acting fairly between members. This is often called 'enlightened shareholder value' and links company law to CSR.
More Corporate social responsibility and sustainability MCQs
- Q1Which of the following best describes corporate social responsibility (CSR)?
- Q2The 'triple bottom line' requires organisations to report on which three dimensions of performance?
- Q3In Carroll's pyramid of corporate social responsibility, which responsibility forms the base of the pyramid?
- Q4Which view of CSR is most closely associated with the economist Milton Friedman?
- Q5A manufacturer pays suppliers in developing countries a fair price, monitors their labour conditions and refuses to use child labour…