[Music] [Applause]
[Applause]
[Applause] [Music]
in recent years there has been a much
in recent years there has been a much greater demand for businesses to behave
greater demand for businesses to behave
greater demand for businesses to behave in a socially responsible manner a
in a socially responsible manner a
in a socially responsible manner a concept of capitalism is shifting it had
concept of capitalism is shifting it had
concept of capitalism is shifting it had seemed that businesses must decide
seemed that businesses must decide
seemed that businesses must decide whether to prioritize on profits or
whether to prioritize on profits or
whether to prioritize on profits or principles this does not have to be the
principles this does not have to be the
principles this does not have to be the case socially responsible business
case socially responsible business
case socially responsible business behavior can generate value not only for
behavior can generate value not only for
behavior can generate value not only for the stakeholders of a business but also
the stakeholders of a business but also
the stakeholders of a business but also for those primarily concerned with
for those primarily concerned with
for those primarily concerned with financial gains the shareholders to
financial gains the shareholders to
financial gains the shareholders to understand this it is important to
understand this it is important to
understand this it is important to consider why shareholders invest in
consider why shareholders invest in
consider why shareholders invest in firms and how this relates to
firms and how this relates to
firms and how this relates to shareholder value there are two key
shareholder value there are two key
shareholder value there are two key reasons why shareholders invest and
reasons why shareholders invest and
reasons why shareholders invest and funds firstly to reap payments in the
funds firstly to reap payments in the
funds firstly to reap payments in the form of dividends and secondly in the
form of dividends and secondly in the
form of dividends and secondly in the hope of a capital increase that is an
hope of a capital increase that is an
hope of a capital increase that is an increase in the price of the shares
increase in the price of the shares
increase in the price of the shares meaning that when the shareholders sell
meaning that when the shareholders sell
meaning that when the shareholders sell their shares a profit of margin will be
their shares a profit of margin will be
their shares a profit of margin will be achieved as this price which they sold
achieved as this price which they sold
achieved as this price which they sold it for is greater than that to which
it for is greater than that to which
it for is greater than that to which they purchased it for so what is
they purchased it for so what is
they purchased it for so what is shareholder value the simplest way to
shareholder value the simplest way to
shareholder value the simplest way to answer this is to look at how
answer this is to look at how
answer this is to look at how shareholder value is generated if a
shareholder value is generated if a
shareholder value is generated if a company’s market value increases then
company’s market value increases then
company’s market value increases then shareholder value is created even more
shareholder value is created even more
shareholder value is created even more so if a long-term sustainable capital
so if a long-term sustainable capital
so if a long-term sustainable capital increase is generated the key point here
increase is generated the key point here
increase is generated the key point here is that this is that shareholder value
is that this is that shareholder value
is that this is that shareholder value is predominantly dependent on a
is predominantly dependent on a
is predominantly dependent on a company’s share price which in turn is
company’s share price which in turn is
company’s share price which in turn is primarily a reflection of a company’s
primarily a reflection of a company’s
primarily a reflection of a company’s future cash flows subsequently to create
future cash flows subsequently to create
future cash flows subsequently to create shareholder value a company must ensure
shareholder value a company must ensure
shareholder value a company must ensure that the investors perception of the
that the investors perception of the
that the investors perception of the future cash flows is a positive one
future cash flows is a positive one
future cash flows is a positive one requiring firms to adopt a long-term
requiring firms to adopt a long-term
requiring firms to adopt a long-term focus for their companies it is here
focus for their companies it is here
focus for their companies it is here where shareholder value can be generated
where shareholder value can be generated
where shareholder value can be generated and social responsibility can play a
and social responsibility can play a
and social responsibility can play a role there are various ways of
role there are various ways of
role there are various ways of increasing shareholder value to satisfy
increasing shareholder value to satisfy
increasing shareholder value to satisfy the financial demands of share
the financial demands of share
the financial demands of share holder’s however the approach of
holder’s however the approach of
holder’s however the approach of employing social responsibility as a
employing social responsibility as a
employing social responsibility as a means of doing this is certainly
means of doing this is certainly
means of doing this is certainly favorable not only does this produce
favorable not only does this produce
favorable not only does this produce quantitative financial returns but such
quantitative financial returns but such
quantitative financial returns but such an approach also complies with high
an approach also complies with high
an approach also complies with high moral standards and responsible company
moral standards and responsible company
moral standards and responsible company values to incorporate this approach
values to incorporate this approach
values to incorporate this approach investors look to integrate
investors look to integrate
investors look to integrate environmental social and governance
environmental social and governance
environmental social and governance issues known as ESG measures this means
issues known as ESG measures this means
issues known as ESG measures this means that companies involved in sustainable
that companies involved in sustainable
that companies involved in sustainable stock indices practice corporate social
stock indices practice corporate social
stock indices practice corporate social responsibility in one of these areas the
responsibility in one of these areas the
responsibility in one of these areas the benefits invent in investing one of
benefits invent in investing one of
benefits invent in investing one of these companies is quite clear a recent
these companies is quite clear a recent
these companies is quite clear a recent study by Oxford University in
study by Oxford University in
study by Oxford University in partnership with asset arabesque asset
partnership with asset arabesque asset
partnership with asset arabesque asset management revealed that the shareholder
management revealed that the shareholder
management revealed that the shareholder value of companies who integrate ESG
value of companies who integrate ESG
value of companies who integrate ESG measures into their strategies is
measures into their strategies is
measures into their strategies is greater than for those who do not these
greater than for those who do not these
greater than for those who do not these positive results can be explored in even
positive results can be explored in even
positive results can be explored in even greater depth with regard to the
greater depth with regard to the
greater depth with regard to the environmental measures the research
environmental measures the research
environmental measures the research revealed the companies associated with
revealed the companies associated with
revealed the companies associated with positive environmental news seen
positive environmental news seen
positive environmental news seen increase in stock prices by Northpoint
increase in stock prices by Northpoint
increase in stock prices by Northpoint Apryl percent and the converse is also
Apryl percent and the converse is also
Apryl percent and the converse is also true fair was behaving in
true fair was behaving in
true fair was behaving in environmentally damaging ways see a
environmentally damaging ways see a
environmentally damaging ways see a decrease in the value of the stock buy
decrease in the value of the stock buy
decrease in the value of the stock buy nor point 65% likewise firms emitting
nor point 65% likewise firms emitting
nor point 65% likewise firms emitting high levels of pollution or those that
high levels of pollution or those that
high levels of pollution or those that violate environmental regulation also
violate environmental regulation also
violate environmental regulation also see a decrease in market value on the
see a decrease in market value on the
see a decrease in market value on the social side of things research has
social side of things research has
social side of things research has revealed equally positive results a
revealed equally positive results a
revealed equally positive results a review of the 100 best companies to work
review of the 100 best companies to work
review of the 100 best companies to work for by London Business School revealed
for by London Business School revealed
for by London Business School revealed that the share price of companies who
that the share price of companies who
that the share price of companies who scored highest with regard to employee
scored highest with regard to employee
scored highest with regard to employee well-being well exceeded that industry
well-being well exceeded that industry
well-being well exceeded that industry average by two point one percent
average by two point one percent
average by two point one percent positive results also emerge from the
positive results also emerge from the
positive results also emerge from the governance aspect of social
governance aspect of social
governance aspect of social responsibility Occident arabesques
responsibility Occident arabesques
responsibility Occident arabesques research highlighted that superior
research highlighted that superior
research highlighted that superior governance leads to better financial
governance leads to better financial
governance leads to better financial performance and to quantify this a
performance and to quantify this a
performance and to quantify this a portfolio dominated by well governed
portfolio dominated by well governed
portfolio dominated by well governed firms and an alpha tender
firms and an alpha tender
firms and an alpha tender fifteen percent above the industry
fifteen percent above the industry
fifteen percent above the industry average the real world of corporate
average the real world of corporate
average the real world of corporate business exemplifies these findings in
business exemplifies these findings in
business exemplifies these findings in 2010 the Mexican Gulf suffered a
2010 the Mexican Gulf suffered a
2010 the Mexican Gulf suffered a horrific oil spill at the hands of BP as
horrific oil spill at the hands of BP as
horrific oil spill at the hands of BP as well as costing the company ninety five
well as costing the company ninety five
well as costing the company ninety five billion dollars the catastrophe severely
billion dollars the catastrophe severely
billion dollars the catastrophe severely affected their share price and with this
affected their share price and with this
affected their share price and with this the firm’s shareholder value on the 15th
the firm’s shareholder value on the 15th
the firm’s shareholder value on the 15th of April 2010 four days before the
of April 2010 four days before the
of April 2010 four days before the incident
incident
incident BP share price stood at 653 P yet after
BP share price stood at 653 P yet after
BP share price stood at 653 P yet after the disaster the share price tumbled by
the disaster the share price tumbled by
the disaster the share price tumbled by over fifty percent to three hundred and
over fifty percent to three hundred and
over fifty percent to three hundred and eight P and has continued to
eight P and has continued to
eight P and has continued to underperform its peer group by thirty
underperform its peer group by thirty
underperform its peer group by thirty seven percent what is really significant
seven percent what is really significant
seven percent what is really significant about this is that the share price BP
about this is that the share price BP
about this is that the share price BP reached as a result of this crisis was
reached as a result of this crisis was
reached as a result of this crisis was lower than that I had experienced during
lower than that I had experienced during
lower than that I had experienced during the financial crisis highlighting the
the financial crisis highlighting the
the financial crisis highlighting the importance of social responsibility to a
importance of social responsibility to a
importance of social responsibility to a firm share price and with this is
firm share price and with this is
firm share price and with this is shareholder value although perhaps not
shareholder value although perhaps not
shareholder value although perhaps not as drastic a similar incident occurred
as drastic a similar incident occurred
as drastic a similar incident occurred more recently when the US environmental
more recently when the US environmental
more recently when the US environmental agency announced in September 2015 the
agency announced in September 2015 the
agency announced in September 2015 the Volkswagen had falsified admissions
Volkswagen had falsified admissions
Volkswagen had falsified admissions tests the company’s share price
tests the company’s share price
tests the company’s share price decreased by approximately 40 percent in
decreased by approximately 40 percent in
decreased by approximately 40 percent in the space of a month volkswagen share
the space of a month volkswagen share
the space of a month volkswagen share price in this situation also reached
price in this situation also reached
price in this situation also reached lower levels than the company had
lower levels than the company had
lower levels than the company had experienced during the financial crisis
experienced during the financial crisis
experienced during the financial crisis whilst irresponsible social behavior
whilst irresponsible social behavior
whilst irresponsible social behavior negatively affects company’s share price
negatively affects company’s share price
negatively affects company’s share price a strong social responsibility policy
a strong social responsibility policy
a strong social responsibility policy can generate an increase in share price
can generate an increase in share price
can generate an increase in share price in turn creating shareholder value a
in turn creating shareholder value a
in turn creating shareholder value a good example of this is the pond asus
good example of this is the pond asus
good example of this is the pond asus endeavor fund the fund only invests in
endeavor fund the fund only invests in
endeavor fund the fund only invests in companies which meet their stringent
companies which meet their stringent
companies which meet their stringent criteria over offering an outstanding
criteria over offering an outstanding
criteria over offering an outstanding workplace and must not be engaged in the
workplace and must not be engaged in the
workplace and must not be engaged in the production of fossil fuels the criteria
production of fossil fuels the criteria
production of fossil fuels the criteria produces spectacular results the fund
produces spectacular results the fund
produces spectacular results the fund has consistent
has consistent
has consistent outperformed the S&P 500 index over the
outperformed the S&P 500 index over the
outperformed the S&P 500 index over the past ten years and since its founding in
past ten years and since its founding in
past ten years and since its founding in 2005 has earned a total return of twelve
2005 has earned a total return of twelve
2005 has earned a total return of twelve point four percent almost five percent
point four percent almost five percent
point four percent almost five percent greater than that of the S&P index
greater than that of the S&P index
greater than that of the S&P index notably the fund was also not as badly
notably the fund was also not as badly
notably the fund was also not as badly affected during the financial crisis as
affected during the financial crisis as
affected during the financial crisis as the grouping with the understanding of
the grouping with the understanding of
the grouping with the understanding of how social responsibility affects
how social responsibility affects
how social responsibility affects shareholder value it is time to consider
shareholder value it is time to consider
shareholder value it is time to consider why this is the predominant linkage
why this is the predominant linkage
why this is the predominant linkage between shareholder value and social
between shareholder value and social
between shareholder value and social responsibility is that of sustainability
responsibility is that of sustainability
responsibility is that of sustainability eighty percent of the studies by Arabist
eighty percent of the studies by Arabist
eighty percent of the studies by Arabist and oxford showed that stock price
and oxford showed that stock price
and oxford showed that stock price performance of companies is positively
performance of companies is positively
performance of companies is positively influenced by sustainability practices
influenced by sustainability practices
influenced by sustainability practices the reason for this is that to act in a
the reason for this is that to act in a
the reason for this is that to act in a sustainable manner companies must take
sustainable manner companies must take
sustainable manner companies must take into account and plan for the future
into account and plan for the future
into account and plan for the future meaning they must adopt long term
meaning they must adopt long term
meaning they must adopt long term strategies which is a crucial aspect of
strategies which is a crucial aspect of
strategies which is a crucial aspect of creating shareholder value when you
creating shareholder value when you
creating shareholder value when you consider that it is future cash flows
consider that it is future cash flows
consider that it is future cash flows that determine share price in line with
that determine share price in line with
that determine share price in line with sustainability is that of a sustainable
sustainability is that of a sustainable
sustainability is that of a sustainable brand image building a positive brand
brand image building a positive brand
brand image building a positive brand image attracts investors to a company as
image attracts investors to a company as
image attracts investors to a company as this is a means of fortifying future
this is a means of fortifying future
this is a means of fortifying future cash flows
cash flows
cash flows yet in order to develop a strong brand
yet in order to develop a strong brand
yet in order to develop a strong brand image it is often essential that a
image it is often essential that a
image it is often essential that a company behaves in a socially
company behaves in a socially
company behaves in a socially responsible manner to act in a socially
responsible manner to act in a socially
responsible manner to act in a socially responsible way firms must also consider
responsible way firms must also consider
responsible way firms must also consider the interest of the stakeholders
the interest of the stakeholders
the interest of the stakeholders primarily their employees and consumers
primarily their employees and consumers
primarily their employees and consumers it is a respected view in the discipline
it is a respected view in the discipline
it is a respected view in the discipline of management the satisfied customers
of management the satisfied customers
of management the satisfied customers are the source of all profits and
are the source of all profits and
are the source of all profits and shareholder value which is true since if
shareholder value which is true since if
shareholder value which is true since if customers are satisfied with the company
customers are satisfied with the company
customers are satisfied with the company they are likely to develop brand loyalty
they are likely to develop brand loyalty
they are likely to develop brand loyalty a trait that enhances the future cash
a trait that enhances the future cash
a trait that enhances the future cash flows of a firm and with this share
flows of a firm and with this share
flows of a firm and with this share price and shareholder value in order to
price and shareholder value in order to
price and shareholder value in order to achieve this first must respect and
achieve this first must respect and
achieve this first must respect and school well in employee well-being
school well in employee well-being
school well in employee well-being furthermore treating employees in a
furthermore treating employees in a
furthermore treating employees in a socially responsible manner also ensures
socially responsible manner also ensures
socially responsible manner also ensures companies retain the best talent
companies retain the best talent
companies retain the best talent enabling them to maximize their
enabling them to maximize their
enabling them to maximize their productivity and efficiency in turn
productivity and efficiency in turn
productivity and efficiency in turn aiding cash
aiding cash
aiding cash is social responsibility or a lack of it
is social responsibility or a lack of it
is social responsibility or a lack of it also affects shareholder value through
also affects shareholder value through
also affects shareholder value through its impact on a company’s finances in a
its impact on a company’s finances in a
its impact on a company’s finances in a positive manner
positive manner
positive manner the sustainable policies responsible
the sustainable policies responsible
the sustainable policies responsible companies use and transparent governance
companies use and transparent governance
companies use and transparent governance approaches practiced by these companies
approaches practiced by these companies
approaches practiced by these companies is viewed by banks and lenders as a
is viewed by banks and lenders as a
is viewed by banks and lenders as a method of risk mitigation subsequently
method of risk mitigation subsequently
method of risk mitigation subsequently socially responsible companies can
socially responsible companies can
socially responsible companies can benefit from reduced cost of capital in
benefit from reduced cost of capital in
benefit from reduced cost of capital in turn positively impacting their future
turn positively impacting their future
turn positively impacting their future cash flows and as such their share price
cash flows and as such their share price
cash flows and as such their share price and shareholder value what Miami today
and shareholder value what Miami today
and shareholder value what Miami today has been to bring to the forefront and
has been to bring to the forefront and
has been to bring to the forefront and into alternative to the stereotypical
into alternative to the stereotypical
into alternative to the stereotypical view of business behavior and capitalism
view of business behavior and capitalism
view of business behavior and capitalism as an immoral socially destructive force
as an immoral socially destructive force
as an immoral socially destructive force it is no longer a necessity for a
it is no longer a necessity for a
it is no longer a necessity for a business to choose between honoring its
business to choose between honoring its
business to choose between honoring its responsibilities to its stakeholders or
responsibilities to its stakeholders or
responsibilities to its stakeholders or shareholders the social awakening of
shareholders the social awakening of
shareholders the social awakening of shareholder value means both groups can
shareholder value means both groups can
shareholder value means both groups can coexist in the 21st century companies
coexist in the 21st century companies
coexist in the 21st century companies cannot differentiate between shareholder
cannot differentiate between shareholder
cannot differentiate between shareholder value and social responsibility the
value and social responsibility the
value and social responsibility the success of the former is dependent on
success of the former is dependent on
success of the former is dependent on the adoption of the latter in today’s
the adoption of the latter in today’s
the adoption of the latter in today’s world of corporate business generating
world of corporate business generating
world of corporate business generating money depends on the practice of morals
money depends on the practice of morals
money depends on the practice of morals and profits are driven by principles
and profits are driven by principles
and profits are driven by principles thank you
”
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