Coles' CSR And Risk Governance: An Essay.

The relevance of corporate social responsibility in context to Coles

The concept of corporate social responsibility (CSR) refers to business model that is self-regulating in nature and allows an organization to be accountable of social aspects to itself, its stakeholder along with the public. Through the practice of corporate social responsibility also known as corporate citizenship an organization can be conscious relative to its impact on the aspects such as society, economy as well as the environment. In addition to this, it allows a business to gain benefit from CSR activities such as philanthropy and volunteer efforts that helps in enhancing brand image at a significant level. Moreover, the CSR activities allow an organization to strengthen its bong with valuable employees and corporations by boosting their morals. The following report is based on Coles which is an Australian public company and operates in several retail chains. The organization primarily focuses on sales of food and groceries through its supermarket chain. The following report will highlight the corporate social responsibility of the chosen organization along with evaluation of its risk governance in order to better understand its CSR. At last, the report will provide suitable board recommendations for the organization that will improve its CSR and risk governance effectively.

The corporate social responsibility (CSR) is a type of self-regulation norms within an organization that are effectively designed as well as integrated in the business model of an organization. The CSR pays emphasis on ethical behavior of the business as well as promotes transparency relative to conversations among the customers, suppliers, shareholder along with local residents and government associated with the business (Nazir and Islam., 2020).

In context to Coles, the concept of corporate social responsibility plays an important role within the organization as it helps the business to attain sustainable development and provide welfare to the society. In addition to this, it also helps the organization meet the expectations of its stakeholder and keep its business model in check in order to comply with the government established laws. Given below is the relevance of corporate social responsibility in context to Coles:

Brand Value: The concept of corporate social responsibly is highly relevant for an organization as it allows the business to improve upon its existing brand image in the market. This is vital for organization that have encountered issues in establishing positive image in the market due to scandals or unethical operations. These actives lead to loss of customer bases as well as negative relations with vital stakeholder such as supplier, customer and the government. This makes CSR relative in order to ensure that the organization maintains a positive brand image in the market in an optimal manner (Hur, Moon and Kim., 2020). In context to Coles, the organization uses CSR in order to ensure that it is able to build strong and loyal relations with its stakeholder by meeting their desired expectations form the company. The organization is able to do so by keeping all its business activities ethical as well as pays emphasis on environmental concerns that help the business maintain an enhanced brand image in the markets. This is vital for the business in the long-term perspective as it provide it immense completive advantage in the market which is vital for business expansion as well as ensuring that the business is able to establishing a loyal customer base in an efficient manner (Baskentli and et. al., 2019).

Brand Value: Improving brand image in the market

Increases sales – Customer Matters: The concept of corporate social responsibility is important for organizations as it allows them to enhance its sales in a strutted as well as systematic manner. Through CSR organizations are able to ensure that they are doing the right thing relevant to their customer and providing them products and services in an ethical manner. This helps organization develop a deep and personal relations with its customer base which improves its ability to enhance its sales in an significant manner (Ramesh and et. al., 2019). In addition to this, it also helps the business to attain higher level of growth in customer base expansion and developing loyalty towards the business. In context to Coles, the organization and its management focuses on only proving products and services to its customers that have been sourced from ethical sources in order to maintain higher level of integrity in the market. This helps the business to meet the expectations of its customers in an optimal manner which helps in developing strong bonds (Bhattacharyya and Rahman., 2019). This is important for the business in the long-term as it will allow in attaining a larger customer base which is loyal when compared to its competitions in the market resulting in enhanced sales and expansion of customers base.

Employee retention and engagement: Corporate social responsibly has high level of relevance within organization as it helps them to develop strong bonds with its employee in an effective manner. It allows organizations to ensure that all the members within the business are able to engage with each other in order to understand aspects such as issues and conflicts. This is vital for business that face problems based on low morale of employee as well as reduced perfaronce. Through CSR organization are able to ensure that all their employee are motived through benefits as well as proper structured engagement with the employee in order to understand their perspective relative to work (Ahmed and et. al., 2020). In context To Coles, the organization conducts regular meeting with tis employee in order to understand any issues that they are encountering in order to develop suitable solution for their employee. This allows the management to enhanced engagement with the employee as help understand their perspective. Moreover, the organization also provides various benefits such as bonuses and insure to its employee to boost their morals (Liu, Lei and Buttner., 2020). This is important for the business in the long run as it improve their retention rates and reduces the overall rate of employee turnover at a significant level.

Cost Saving: The incorporation of corporate social responsibility within organizations also enable them to save cost relative to various factors such as through reduced employee turnover as well as increasing sales by understanding and meeting the expectations of the customers. This is important for organization with high amount of cost relative to its business operations which reduces its efficiency as well as productivity in the market (Pham and Tran., 2020). In context to Coles, the organization is able to use its CSR and reduce cost at a significant level as it have low rate of employee turnover by understanding their perspective and has established a loyal customer base by understanding their needs and fulfilling them through ethical ways which has improved their sales. Moreover, the organization utilizes the strategy of environment sustainability which it is able to incorporate in its development of new products along with minimizing packaging material which helps the business to save huge cost (Currás?Pérez and et. al., 2018). Furthermore, the management at Coles is also able to save huge cost by its overall brand image in the market which allows it to attract a huge customer base reducing the overall cost spent of marking operations as the brand is promoted effectively through the word of mouth which helps it save cost in its business operations and ensure saved cost is allocated within the business in an optimal manner for growth.

Increases sales – Customer Matters

Risk management: Corporate social responsibility is also important for organizations in order to manage their risk in an optimal manner. There are various risks that organizations encounter in both internal as well as external environment that can negatively influence business operations as well as harm the overall brand image in the market. This can be caused due to conducting unethical environment practice or treating employee in an inappropriate manner within the business which can lead to legal actions and tarnish the reputation of the business in the market. In such as case the organization will observe a decline in its sales as well as market share due to unsatisfied stakeholder such as customers, employees, government and the local community (Al-Shammari, Rasheed and Al-Shammari., 2019). In context to Coles, the organization focuses on following all the rules and regular established by the government as well as following all the guidelines relative to treatment of its employee in order to negate any legal hindrance. In addition to this, the organization is devoted to a zero emission vision in order to have a positive impact on the surrounding environment and the local community which recued its environment risk. This is highly important for the business in the long-run as it will help in further enhancing its brand image and provide opportunity to expand its market share (Lee and Chen., 2018).

Risk governance is regarded as rules conventions, mechanisms, institutions and procedures through which decisions are taken for risks and implemented (Asensio-López, Cabeza-García and González-Álvarez, 2019). This can be positive as well as normative and formulating risk management strategies for avoidance or reduce costs of human and economic those are caused through disasters. This is providing aid as well as identifies risks that are taken to grab opportunities that are not pursued. The committee has set for risk management policy and ways in which management of risk took place.

Risk governance framework is applied by Coles to get guidance for identification as well as handling of risks that includes stakeholders (IRGC Risk Governance Framework, 2019). This has recommended inclusive approach to evaluate, frame, assess, manage and communicate issues of risks which are marked through uncertainty, complexity and ambiguity. This is analysed with help of following stages such as:

Pre –assessment- It is defined as identification as well as framing which leads to frame risk, warn and prepare to handle them. Coles need to find stakeholder and actors to capture several risk perspectives to identify opportunities and strategies to address them.

Appraisal- The assessing of developing as well as synthesises for making decisions or risk are managed and identified to select for available option to prevent, mitigate, share and adapt risk.

Characterisation and evaluation- There is need to make comparison of risk appraisal by Coles with particular criteria and determine acceptability and significance of risk and making best decisions (Bhagat and Bolton, 2019).

Management- The designing as well as implementing actions and remedies needed to avoid, reduce, retain and transfer risks.

Communication- It is important stage where Coles need to make open communication with their team and members and engaging stakeholders to assess and manage risk and deal with risk in effective way to make best decisions.

Employee retention and engagement

The audit and risk committee has to conduct several responsibilities. This includes meeting four times annually, overseeing effectiveness of system of internal controls, reviewing as well as assessing procedure of groups to verify financial statements and making reporting and compliance with help of regulatory and legal requirements. Moreover, committee of Coles has to evaluate adequacy, review group risk policy and material incident to overcome frauds and others in effective way. The evaluation of effectiveness as well as adequacy to identify and manage environment and social sustainability along with disclosure of material to risks that is financial and non-financial.

The supermarkets such as Coles are facing disruption in several ways to shop for food (Jiang and Kim, 2020). There is high competition that ranges from local farmers market, retail giant and others. In order to attract as well as retain customers, industry has added products and services and raise risks. The different types of risks faced by Coles along with their impact and probability are discussed here. They are as follows:

Third Party Discrimination- The store management of Coles has responsibility to maintain environment for clients, customers and employers. It has included making proper checking of background and training to provide effective treatment to users and adopt in suitable way. The manager needs to take attentive to employees that are discriminating or humiliating on basis of ethnic origin, disability, age and others.

Alcohol Sales- The respective business is operating in states which have allowed selling beer, wine, layer of risk (10 risks supermarkets face as the industry changes, 2022). The alcohol has presented important portion of sales. This is critical aspect to make policy of checking identification in order to reduce risk of sales.  

Slip as well as fall incidents- This is risky and costly for supermarket that has possibility where customer might slip as well as fall (Kastiel and Nili, 2022). The recommended are provided to staffs to regularly clean up food and liquid in quick manner. There is change in floor levels, stairs and repairing accordingly.

Tainted Food- Coles are purchasing products as well as food from distributors and remaining liable to sell in store. For managing risk, if problem are arising with food to purchase from suppliers and recommended to include vendor contracts such as subrogation, hold harmless and indemnification language.

Daycare operations- The business is offering daycare or supervised plays that allow parents to do better shopping without any problems (Kovermann and Velte, 2019). This operation includes supermarkets that should be careful for employees and screen reporting for work performance.

Assault and battery, robberies- The robberies are taken place in store and attached to gas station that is protecting staffs and customers. This required to trained to watch out and making reporting activities so that they could overcome issues, criminal activities and others.

Fires- The business required to up to date as well as checks on regular basis. The fire extinguishers need to maintain as well as inspect for good working order and placed throughout store. The staff required effective training and following all emergency precautions and evacuation procedures.

Cost Saving: Incorporation of corporate social responsibility

Fuel Sales- The stores need consider fuel sales that are needed to take precautions as well as other gas against fires and explosion. The store has no smoking signs that are easily visible to staff and customers (Solomon, 2020).

In order to decline risk, mitigation strategies are applied. They are as follows:

Avoidance- The risks are avoided for slip as well as fall incidents and alcohol sales. In this regard, they are required to accept these risks and make effective implementation ways for gaining outcomes.

Acceptance- Daycare operations and fuel sales are accepted risk mitigation strategies for business. In this, they have to accept such risk for conducting operations and activities and attain outcomes.

Reduction or control-The fires and tainted food need to be reduced by stores. This could be implemented through control to detect cause of unwanted events for products and services. This also focuses on management or decision making procedure.

Transference- The third party discrimination and assault, battery and robberies need to be transference. This strategy need to burden of risk to another party. It also required to control and if anything goes wrong then it should be managed effectively.

Likelihood	1	2	3	4	5
	Insignificant	Minor	Moderate	Major	Catastrophic
Certain	High	High	Extreme	Extreme	Extreme
Likely	Moderate	High	High	Extreme	Extreme
Moderate	Low	Moderate	High	Extreme	Extreme
Unlikely	Low	Low	Moderate	High	Extreme
Rare	Low	Low	Moderate	High	High

Given below are suitable and constructive suggestions for the improvement in the CSR and Risk governance to the board of Coles:

Take feedback: It is recommend that the board of Coles focuses on taking feedback from multiple source relative to its stakeholder such as the customers, employees and supplier in order to understand their perspective on what aspects of the business can be improved (Chaudhary and Akhouri., 2018).This will help the organization to attain vital information where it may be lacking in its corporate social responsibility as well as attain the opportunity to improve its risk governance (Sardana and et. al., 2020).In addition to this, it will allow the business to ensure that its CSR activities are aligned with the needs and preference along with expectations relative to its various stakeholders in the market.

Increase transparency: It is suggested to the board of Coles that it can improve upon its overall transparency aspects in order to provide all the details of how the organization functions to its various stakeholders. This will help the business to demonstrate all its actives in a clear and structured manner which will help in enhancing the trust of its stakeholders (Sauerwald and Su., 2019).In addition to this, it will allow the business to attract customers in an efficient manner as well as move in the direction of developing positive engagement with the customers as well leading to improved growth as well as enhanced brand image in the market.

Encourage creativity: It is also suggested to the board members of Coles to further incorporate the element of creatively within its organization as it will help in develop and establishing new and creative techniques as well as methods that will enhance business operations (Kim, Milliman and Lucas., 2020).The business will be able to improve upon its existing business operations and make them more efficient leading to reduction in operational cost which can be used in order to conduct philanthropy and charity activities leading to improved CSR of the business as well as its brand image in the market.

Improve responsiveness: It is recommended to the board of Coles to improve upon the overall rate of responsiveness in order to better provide support to tis various stakeholders. This will help the business to ensure that all its stakeholders are able to attain solution based on the issues they are encountering (Durand,  Paugam and Stolowy., 2019).In addition to this, it will help the business to further develop deeper and positive relations with is stakeholder which is crucial for the long-term business goals as well as objectives.

Conclusion

From the above report it has been concluded that, it is crucial for an organization to have proper corporate social responsibly in order to have a positive brand image in the market as well as to ensure that it is able to meet the desired expectations of its various stakeholders. The report was able to conclude that overall aspect of corporate social responsibility relative to the chosen organization and how the current CSR actives of the selected organization help in its organizational operations and developing positive relations with its various stakeholders. In addition to this, the report also conclude that the activities of CSR conducted by the selected organization will provide it vital assistance in its long-term objective in an optimal manner. The report also concluded the concept of risk governance and how important it is for the organization to evaluate it I order to avoid any form of hindrance. At last he report confided that some elements such as feedback from various stakeholder, creativity and response time can be incorporated in the selected organization in order to improve its CSR as well as risk governance.

References

Books & Journals:

Ahmed, M., Zehou, S., Raza, S.A., Qureshi, M.A. and Yousufi, S.Q., 2020. Impact of CSR and environmental triggers on employee green behavior: The mediating effect of employee well?being. Corporate Social Responsibility and Environmental Management, 27(5). pp.2225-2239.

Al-Shammari, M., Rasheed, A. and Al-Shammari, H.A., 2019. CEO narcissism and corporate social responsibility: Does CEO narcissism affect CSR focus?. Journal of Business Research, 104. pp.106-117.

Asensio-López, D., Cabeza-García, L. and González-Álvarez, N., 2019. Corporate governance and innovation: A theoretical review. European Journal of Management and Business Economics.

Baskentli, S., Sen, S., Du, S. and Bhattacharya, C.B., 2019. Consumer reactions to corporate social responsibility: The role of CSR domains. Journal of Business Research, 95. pp.502-513.

Bhagat, S. and Bolton, B., 2019. Corporate governance and firm performance: The sequel. Journal of Corporate Finance. 58. pp.142-168.

Bhattacharyya, A. and Rahman, M.L., 2019. Mandatory CSR expenditure and firm performance. Journal of Contemporary Accounting & Economics, 15(3). p.100163.

Chaudhary, R. and Akhouri, A., 2018. CSR perceptions and employee creativity: Examining serial mediation effects of meaningfulness and work engagement. Social Responsibility Journal.

Currás?Pérez, R., Dolz?Dolz, C., Miquel?Romero, M.J. and Sánchez?García, I., 2018. How social, environmental, and economic CSR affects consumer?perceived value: Does perceived consumer effectiveness make a difference?. Corporate Social Responsibility and Environmental Management, 25(5). pp.733-747.

Durand, R., Paugam, L. and Stolowy, H., 2019. Do investors actually value sustainability indices? Replication, development, and new evidence on CSR visibility. Strategic Management Journal, 40(9). pp.1471-1490.

Hur, W.M., Moon, T.W. and Kim, H., 2020. When and how does customer engagement in CSR initiatives lead to greater CSR participation? The role of CSR credibility and customer–company identification. Corporate Social Responsibility and Environmental Management, 27(4). pp.1878-1891.

Jiang, F. and Kim, K. A., 2020. Corporate governance in China: A survey. Review of Finance. 24(4). pp.733-772.

Kastiel, K. and Nili, Y., 2022. The Corporate Governance Gap. YALE LJ. 131. pp.782-797.

Kim, J.S., Milliman, J. and Lucas, A., 2020. Effects of CSR on employee retention via identification and quality-of-work-life. International Journal of Contemporary Hospitality Management.

Kovermann, J. and Velte, P., 2019. The impact of corporate governance on corporate tax avoidance—A literature review. Journal of International Accounting, Auditing and Taxation, 36, p.100270.

Lee, L. and Chen, L.F., 2018. Boosting employee retention through CSR: A configurational analysis. Corporate Social Responsibility and Environmental Management, 25(5). pp.948-960.

Liu, Y., Lei, L. and Buttner, E.H., 2020. Establishing the boundary conditions for female board directors’ influence on firm performance through CSR. Journal of Business Research, 121. pp.112-120.

Nazir, O. and Islam, J.U., 2020. Influence of CSR-specific activities on work engagement and employees’ innovative work behaviour: An empirical investigation. Current Issues in Tourism, 23(24). pp.3054-3072.

Pham, H.S.T. and Tran, H.T., 2020. CSR disclosure and firm performance: The mediating role of corporate reputation and moderating role of CEO integrity. Journal of Business Research, 120. pp.127-136.

Ramesh, K., Saha, R., Goswami, S. and Dahiya, R., 2019. Consumer's response to CSR activities: Mediating role of brand image and brand attitude. Corporate Social Responsibility and Environmental Management, 26(2). pp.377-387.

Sardana, D., Gupta, N., Kumar, V. and Terziovski, M., 2020. CSR ‘sustainability’practices and firm performance in an emerging economy. Journal of Cleaner Production, 258. p.120766.

Sauerwald, S. and Su, W., 2019. CEO overconfidence and CSR decoupling. Corporate Governance: An International Review, 27(4). pp.283-300.

Solomon, J., 2020. Corporate governance and accountability. John Wiley & Sons. 

Online:

10 risks supermarkets face as the industry changes. 2022. [Online]. Available at: < https://www.propertycasualty360.com/2017/03/10/10-risks-supermarkets-face-as-the-industry-changes/?slreturn=20220231030123>. 

IRGC Risk Governance Framework. 2019. [Online]. Available at: < https://irgc.org/risk-governance/irgc-risk-governance-framework/>. 

Sustainability Report.,2021.[Online]Available through:< https://www.colesgroup.com.au/sustainability/?page=sustainability-report>

Coles launches new sustainability initiative.,2021.[Online]Available through:< https://www.cmo.com.au/article/687077/coles-launches-new-sustainability-initiative/> 

Coles Sustainability Strategy.,2021.[Online]Available through:<

https://www.colesgroup.com.au/FormBuilder/_Resource/_module/ir5sKeTxxEOndzdh00hWJw/file/Coles_Sustainability_Strategy.pdf>