Report on Corporate Governance for Sustainability and Responsibility

This report delves into the crucial intersection of corporate governance, sustainability, and social responsibility, using examples from companies like Colorofix, YouSolar, and Hongkong Land. It explores the governance structures of these companies and their commitment to environmental and social responsibility. The report differentiates between for-profit and non-profit corporations, recommending the latter for a company focused on social entrepreneurship. It then examines different types of corporate governance mechanisms, including internal and external mechanisms, and independent audits, suggesting the latter as the most suitable for a firm prioritizing sustainability. The report emphasizes the importance of corporate governance in ensuring value for shareholders, customers, and the environment. The report also includes references to relevant research and studies to support its findings and recommendations.

The Corporate
Governance of
Sustainability and
Social Responsibility

Colorofix
Colorofix solutions is a fashion company that uses synthetic biology to create dyes which are used in the colouring of clothes and
hence contributing to sustainability in the fashion industry.
The company extracts colours from plants without harming the environment and without compromising the quality or the supply
chain value of its products (Ortiz et al., 2016).
The company is involved in this process to avoid the chemical process, which results in environmental pollution. The process
results in the saving of water since it uses only 10% of the water used in the alternative chemical process.
The technology used by Colorofix solutions reduces costs and hence increasing the margins for manufacturers. Consumers get
high quality and eco-friendly products at favourable prices. The governance structure of colorofix is very critical to the success of
the company.
The company is committed to corporate responsibility and its core values of ensuring that all the products that it manufactures
are sustainable. The company also maintains rigorous corporate governance practices and internal controls.
The company is headed by a board of directors, the chairman and chief executive officer. The other members of the executive
include the chief financial officer, the general counsel and the members of the executive committee.
The corporate governance structure, therefore, ensures the company offers value to its shareholders and customers while at the
same time ensuring environmental sustainability (Masud et al., 2018).

YouSolar Limited
YouSolar is a company that focuses on offering its customers a revolutionary PowerBloc which is
integrated with a nano-grid.
It is a modular system of power made of solar arrays, battery and inverter that which provides
power to the house. The company offer a powerful, reliable, clean, quiet and 100% sustainable
energy("Home - YouSolar", 2020).
The energy is also cheaper and environmental friendly compared to other forms of energy. The
executive management of YouSolar is made up of experts and innovators who share a passion
for building the most prominent solar and battery system, which is more sustainable than any
other source of energy in the world.
Shareholders of the company have been getting maximum returns on their investment since the
company has been on an excellent growth trajectory. This has made it possible for the
shareholders to enjoy high dividends.

HongKong Land
Hongkong Land(HKL) is a property investment management and development company with
residential and commercial property interests in Asia("Hongkong Land", 2020).
The companies` social, economic and environmental sustainability is key to its success in the real
estate market. The company uses innovative processes and materials in its construction, and hence
it has won many awards globally.
The company ensures sustainability in its use of resources while at the same time, ensuring that the
quality of services and products offered to the customers and the community is not compromised.
The company adopts sustainable waste management processes and green roofs which helps in
conserving the environment. HKL has a strict code of conduct for its employees which ensures that
the behaviour of employees is professional to ensure that value is delivered to customers.
The corporate governance framework also has a sustainability procurement policy which provides
that all materials used in construction are environmentally friendly.

Types of corporations and
recommendations
A for-profit corporation is an organization whose primary goal is to earn profits through its operations, and it's guided only by its interest(Chen,
2017). Most of these organizations operate in the private sector, and most of them rarely engage in cooperate social responsibility.
A non-profit organization is an organization whose primary aim is to advocate for social causes by using all its resources to achieve this objective.
The organizations do not make any profits and are tax-exempt.
Corporations are legal entities which are legally separate from the owners. It enjoys rights and responsibilities enjoyed by individuals such as sue
and be sued, hire employees and own assets as well as pay taxes (Alshbili et al., 2019).
Each form of company has its advantages and disadvantages. For-profit organization main aim is to maximize shareholder value by maximizing
profitability. This type of organization can also engage in corporate social responsibility and adopt sustainability measures to conserve the
environment.
The CEO of the company should choose a not for profit organization. This is because the focus of the company is to use a social entrepreneurship
model. This kind of model applies business solutions to social enterprises to help solve problems in society.
The systems help to achieve sustainability by enabling organization which are non-profit to support themselves financially (Miller-Stevens et
al.,2018).
This helps the company avoid dependence on grants and donations and hence it can push for the success of its mission without struggling
financially. This is, therefore, the best model for the company since it will achieve the social objective and its sustainability goals while at the same
time having self-reliance mechanism which will enable the company to run smoothly.

Types of corporate governance
and recommendations
The major types of corporate governance include internal mechanism, external mechanism and independent audit.
Internal mechanism- these are controls within the business organization, which helps in monitoring the progress and activities of
the organization (Banerjee & Wahl, 2017). This helps in identifying performance gaps so that corrective action can be taken to
improve the performance of the business.
The system also helps to identify opportunities that the company can utilize to achieve its objectives. It helps in serving the internal
stakeholders, the employees and the management.
The external mechanism- these are external control mechanism which is done by people outside the organization to protect and
serve the interest of various stakeholders such as government, shareholders, trade unions and creditors(Banerjee et al., 2017).
These mechanism are designed by external stakeholders to help monitor the operations of the organizations.
Independent audit- This is a governance mechanism which serves the interest of internal and external stakeholders. The companies
financial statements are audited by an independent firm. This helps the stakeholder to get a broad view of the firm's internal
operations and organization.
The most suitable governance mechanism for the company is an independent audit. This is because the governance mechanism
serves the interest of stakeholders within and outside the organization (Hussain et al., 2018). Since the main objective of the firm is
to ensure environmental sustainability. The firm is answerable to the society, government and other stakeholders who might be
affected by its activities and hence this mechanism will help to communicate with all the stakeholders.

References
Alshbili, I., Elamer, A. A., & Beddewela, E. (2019). Ownership types, corporate governance and corporate social responsibility disclosures. Accounting Research Journal.
Banerjee, S., & Wahl, M. F. (2017). Values based ideal types of corporate governance systems. Journal of Business, 2(1), 13-25.
Chen, R. (2017). Sub-optimal judicial guidance and conflicting regulatory objectives: Why Division of Corporations Widely Seen for Close-Corporations But Rare for
Stock Market in China. Peking University Law Journal, 5(1), 165-186.
Hussain, N., Rigoni, U., & Orij, R. P. (2018). Corporate governance and sustainability performance: Analysis of triple bottom line performance. Journal of Business Ethics,
149(2), 411-432.
Home - YouSolar. (2020). Retrieved 13 April 2020, from https://yousolar.com/
Hongkong Land. (2020). Retrieved 13 April 2020, from https://www.hkland.com/en/about/sustainability.html
Masud, M. A. K., Nurunnabi, M., & Bae, S. M. (2018). The effects of corporate governance on environmental sustainability reporting: Empirical evidence from South
Asian countries. Asian Journal of Sustainability and Social Responsibility, 3(1), 3.
Miller-Stevens, K., Taylor, J. A., Morris, J. C., & Lanivich, S. E. (2018). Assessing value differences between leaders of two social venture types: Benefit corporations and
nonprofit organizations. VOLUNTAS: International Journal of Voluntary and Nonprofit Organizations, 29(5), 938-950.
Ortiz de Mandojana, N., Aguilera Caracuel, J., & Morales Raya, M. (2016). Corporate governance and environmental sustainability: The moderating role of the national‐ ‐ ‐ ‐
institutional context. Corporate Social Responsibility and Environmental Management, 23(3), 150-164.