Sustainability Operations Case Study

978 Words 4 Pages
Sustainability operations is a relatively new practices for businesses to be taking part in, while we are measuring how: CEO compensation, CEO gender, size of firm, profitability and stock value impact a firm’s sustainability. Corporate Social Responsibility (CSR) has become an increasing concern, which sustainability is a part of. While there is a constant need to drive profits for the business, receive compensation and for investors to profit how can we tell which of these variables are positively and negatively impacting the businesses sustainability efforts. Or how do we know if the business is really attempting to be sustainable at all, but let’s explore sustainability, its history in business and its variables.
It was not until later
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Where defined by Bowen in 1953 as “an obligation to pursue policies to make decisions and to follow lines of action which are compatible with the objectives and values of society.” But, interestingly enough this can be done through showmanship and advertising granted the sustainability efforts really make a difference or not. Magdy M. Hussein conducted a study on corporate sustainability and CEO compensation and she claims that her study found “…executives lean more towards self-regulation and self-determination. Panelist disregard any suggestion of regulating executive’s salary/compensation as CSR Criteria.” Furthermore, Lawrence S. Tai mentions in his study that “there is a lag between CEO pay and firm performance,” meaning we may discover since Magdy’s paper was written in 2010 that the sustainability efforts may have finally caught up with CEO compensation as Lawrence mentions.
As for the Gender of the CEO there is conflicting information and a lack of data. There are articles conflicting that women have an impact on sustainability. Jeremy Galbreath states that companies that have an initiative in having more women on their board show a higher level of corporate social responsibility and in term will have higher sustainability. However the number of women versus men in business at this level is minimal and may not provide a significant enough sample
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Francis Quinn reinforces this through stating “Most recently, Freeport-McMoRan and Intel have made changes to CEO compensation with overall financial and sustainability performance in mind.” CEO compensation varies in a numerous different ways from salary, stock options, performance based bonuses. While some of these metrics they are being measured on are safety and environment records according to Ross Kerber at Reuters. So we are going to evaluate a long term and short term compensation for CEOs with a short term compensation variable being there Salary and the CEOs shareholder return on their stock options being a long term compensation. While in 2010 Mindy S. Lubber states Intel, National Grid and Xcel Energy are all companies focusing on compensating through sustainability. While Intel has opened this compensation to every employee. National Grid claims to speak about sustainability at every executive meeting and is tied into their compensation and the same goes for Xcel Energy. This in its sell shows that there is a significant push for employees and CEOs to strive for these sustainability

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