Grade

12

BUSINESS ETHICS AND SOCIAL

REPONSIBILITY
QUARTER 3 – MODULE 2

Fairness, Accountability,
Transparency and
Stewardship in Business and
Non-profit Organizations
Lesson
Fairness, Accountability and

2 Transparency in Business Organizations

and Non-Profit Organizations
The integrity and sustainability of a business or organization is determined by
the core principles that guide its operation. In this lesson, you will be introduced to
various principles that are essential in an organization’s success.
The Core Principles of Good Corporate Governance

Business organizations are anchored on a set of core principles or values that

direct their day-to-day operations and transactions with clients. With these core
principles and values, companies and other organizations are able to gain the trust
of their shareholders, clients and other stakeholders.
The Cadbury Report released in the UK in 1991 summed these up into the
term corporate governance which refers to the “system by which businesses are
directed and controlled." Good corporate governance ensures a company’s success
while a poor one can harm a company’s potential, hurt its financial standing or even
damage its reputation in the long run. Among the core principles of good corporate
governance are fairness, accountability, responsibility and transparency.

Fairness

Fairness means “the value of treating people with a standard of performance

that is consistent and equal based on your commitments.” Fairness is manifested in
the equal treatment of shareholders, employees, clients, investors and other
stakeholders. Customers have to be given a fair value for their money to gain their
patronage. Employees should be given equal pay for equal work and provided with
non-discriminatory work environment and work conditions that will help them grow
professionally.
According to an article from a business website, “the idea of fairness also
determines if an employee will make an extra effort to reach organizational goals or
even the objectives of his/her own job.” Research also suggests that partiality in the
workplace is one of the primary reasons why employees quit their jobs.

Transparency

Good corporate governance also includes informing stakeholders of the

activities of the business organization, its strategic plans and risks. The “openness of
the company to provide clear information to shareholders and other stakeholders” is
called transparency. Transparency is what builds stakeholder’s trust and confidence
in the company and its operation.
A good example of practicing transparency is the implementation of Open-
book management (OBM) practices. According to the Great Game of Business
website, Open-book management (OBM) is “the business practice of creating
transparency by sharing financial information with employees.” Coined by John Case
of Inc. magazine in 1993, it is based on the notion that sharing financial information
and other management processes to employees gives them a sense of
empowerment and accountability.

Accountability

Accountability or corporate accountability, particularly, refers to “the obligation

and responsibility to give an explanation or reason for the company’s actions and
conduct.”
Simply, it is taking responsibility for the impact of decisions or actions made.
It may mean an individual made to answer for a work done to his/her peers or
superiors or a leader taking the blame for the consequences of the organizations’
activities within the scope of his/her position. As business organizations have far-
reaching impact, their accountability is not just limited to their shareholders but also
extends to stakeholders that include their employees and the members of the
community.
Accountability is a part of ethical management which, in a larger context, sees
to it that business entities take full responsibility of the effects of their actions to the
society and the environment at all times.

Responsibility

The term responsibility is often used interchangeably with accountability but

they are not the same. Nevertheless, accountability and responsibility work together.

Unlike accountability, responsibility can be shared. When working on a big

project, for instance, one may organize a group and assign every member a
particular task to accomplish or a defined role to perform. The focus of responsibility
is on tasks while accountability concerns itself with the completion of these. When
tasks fail, accountability steps in to see who should answer for the results.

The Concept of Stewardship

According to your.dictionary.com, stewardship is “taking care of something

like a large household, the arrangements for a group or the resources of a
community.”

In the context of commerce, it means “taking responsibility for the business

and the effects it has on the world around it.” It is a concept that looks beyond profit
or corporate gain. According to an article by Anam Ahmed published in
bizfluent.com, stewardship includes the following examples.

Corporate Stewardship

Many business leaders are seeing the negative effects of their companies on
the world around them and are actively working to alter their business practices and
to take more responsibility for their actions. This is called corporate stewardship or
corporate social responsibility.
Environmental Stewardship

For some businesses, focusing on changing their business practices to

include more sustainable and environmentally friendly initiatives is a key driving force
of their brand. The effects of climate change are becoming clear around the world,
and many organizations are starting to align the way they operate with new values
that center around sustainability.

Service-Oriented Stewardship

Managing the interactions between individuals within the company and those
outside of the company, such as customers, suppliers, partners and local community
members, is also a part of stewardship in business. Businesses need to establish
agreed-upon codes of conduct and communicate the importance of these rules

Based on a business website, below are the four keys to good stewardship at
the corporate level.

• Improve the quality of life for employees and locals

• Be a good neighbor by honoring local character and by feeding the
economy
• Use your unique resources to empower citizens
• Directly invest in existing community organizations

Activity 1. Agree or Disagree

Directions: Read each statement carefully. Then, identify whether you AGREE or
DISAGREE with it. Write your answer on the blank.

________1. In the business perspective, accountability and responsibility are the

same.
________2. Transparency means facing the consequences of your actions and
decisions.
________3. Fairness entails the principle of equality in matters that involve the
business and its people.
________4. A business operation that harms the environment illustrates the practice
of stewardship.
________5. Part of observing fairness in a corporation is giving shareholders what is
due them.

Activity 2. Sampling Time!

Directions: Provide a specific example of organizational practice that illustrates each
of the following.
1. Fairness
2. Transparency
3. Accountability
4. Responsibility
5. Stewardship
Activity 3. My Business Mantra
Directions: Create a business mantra based on the principles of good corporate
governance you have learned in the module. Write your mantra inside the box below.

References
• https://www.pearse-trust.ie/blog/bid/108866/the-core-principles-of-good-
corporate-governance
• https://work.chron.com/important-business-relationships-based-honesty-trust-
fairness-respect-1682.html
• https://www.pearse-trust.ie/blog/bid/108866/the-core-principles-of-good-
corporate-governance
• https://www.greatgame.com/the-fundamentals/business-transparency
• https://courses.lumenlearning.com/boundless-management/chapter/core-
requirements-of-successful
• https://www.investopedia.com/terms/c/corporate-accountability.asp
• https://www.pearse-trust.ie/blog/bid/108866/the-core-principles-of-good-
corporate-governance
• https://www.eaglesflight.com/blog/the-difference-between-responsibility-and-
accountability-in-leadership
• https://www.yourdictionary.com/stewardship
• https://bizfluent.com/about-4612393-definition-of-stewardship.html
• https://www.watsonlandcompany.com/the-4-keys-to-good-stewardship-at-the-
corporate-level/
• https://www.pearse-trust.ie/blog/bid/108866/the-core-principles-of-good-
corporate-governance

Answer Key ( Activities )

Activity 1 Activity 2
1. DISAGRE Answers may vary.
2. DISAGREE
3. AGREE Activity 3
4. DISAGREE Answers may vary.
5. AGREE
Name:__________________________________ Date: _____________

Grade/Section:________________ Score:____________

SUBJECT: Business Ethics and Social Responsibility

QUARTER 3
Worksheet No. 2

I. Multiple Choices. Directions: Read each item carefully. Then, write the letter of
the correct answer on the provided space.

______1. The act of making wise use of natural resources is ___________.

a. Environmental stewardship
b. Corporate stewardship
c. Service-oriented stewardship
d. All of the above
______2. Which describes an open sharing of financial information in a business
organization?
a. fairness
b. transparency
c. accountability
d. stewardship
______3. Which core principle of good corporate governance is observed when an
employee is held responsible by his/her superior for a task he/she failed to do?
a. fairness
b. transparency
c. accountability
d. stewardship
______4. Which of the following statements about practicing fairness in a business
organization is NOT true?
a. It encourages employees to exert extra effort to reach goals.
b. It promotes a non-discriminatory work environment.
c. It ensures that shareholders receive equal consideration.
d. It builds pressure between the management and employees.
______5. Instead of using single-use plastic bags, Aleng Nena started using paper
bags as containers for her business products last year to help reduce
plastic waste in the environment. Which of the following is observed by
Aleng Nena?
a. fairness
b. transparency
c. accountability
d. stewardship
______6. Ensuring that employees are given equal pay for equal work illustrates the
principle of _________.
a. fairness
b. transparency
c. accountability
d. stewardship
______7. Which is demonstrated by a business organization if it makes sure that its
operation does not do harm on people, capital or natural resources?
a. fairness
b. transparency
c. accountability
d. stewardship
______8. Which does NOT illustrate transparency in business?
a. Matters concerning the status of the company are disclosed.
b. Employees are given access to financial statements.
c. Duties and responsibilities of the board are clarified publicly.
d. Financial performance figures are kept for confidentiality.
______9. Which refers to the responsibility of giving an explanation for the
consequences of the company’s decisions and actions?
a. fairness
b. transparency
c. accountability
d. stewardship
______10. Which best describes responsibility?

a. It is result-oriented.
b. It cannot be shared.
c. It stresses consequence.
d. It is task-oriented.

II. Performance Task. Directions: Interview a business owner or leader of a non-

profit organization in your barangay. Introduce to him/her the concept of
environmental stewardship discussed in the module. Then, ask how he/she observes
it in the business or non-profit organization. Record the result of the interview and
write a three-paragraph narrative report of it on the given space below.

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Answer Key (Worksheet 2)
Multiple Choices
1. a
2. b
3. c
4. d
5. d
6. a
7. d
8. d
9. c
10. d
Performance Task
Narrative reports may vary.