Finance

Corporate Social Responsibility and Ethics in Northern Rock Bank

Corporate social responsibility is an adaptable approach to critically assess internal organization’s practices and the extent at which such practices may affect the external environment to withdraw or engage on the business (Michalak, Akseli, 2011:45). The approach further assesses the harms length that may emanate from unethical business practices in order to ascertain the role of societal inclusion in mentoring effective corporate, social, and public images to a company (Harrison, 2007:1).The internal managerial practices Executive remuneration is the amount paid to the topmost managers of different ranks in any organization. It is set by the board of directors who may follow certain set criteria and outlined in the organization’s salary and remuneration policy. Most of the managers’ demand for higher pay makes the parties involved in the remuneration system to have a hard time in resetting the system. However, sustained pay system may not be the best to reinforce executive performance (Idowu, Leal Filho, 2008:56). It is impossible to regulate executive salaries due to various reasons, which are in a lane manifested in a range of activities. For instance. a manager may demand a salary increment and may yet not be a good performer (Tricker, 2012:65). Others have the knowledge but lack the basic concepts of practicing what they have in their areas of responsibility. They have very little to do in the organization compared to their subordinates who are in turn required to work hard for a low salary (Visser, 2010:156). The directors of the Northern Rock legally seize the bank shares which were to be sold and help settle all the debts it owed the bank of England. The shareholders are therefore liable to sue the directors (Innes, Norris, 2005:128). This is due to the unfulfilled promise by the directors that they would compensate but they instead de-valued the shares so that the shareholders would get something very negligible. They did this by stating that they were. under new management and were unable to operate as a successful business. It is the government, which led the Northern Rock to countenance the problems (Regester, Larkin, Regester, 2008:45). They have a prima facie case for their rights having been violated by the government officials as is stipulated in the Human Rights Act of 1998, which deemed the plaintiff to compensation. The Northern Rock clients included business investment agencies, households and firms. These firms dealt with different business operations. The business investments were often in need of expenditures in the present to acquire returns in the future (Baxi, Prasad, 2005:68). Therefore, businesses need to borrow to finance their investments since the lenders pursue to earn long-term profits from capital investments (Idowu, Leal Filho, 2008:58). Eventually, they demand flexible accounts, which allow them instant admittance to their deposits (this means, they value short development deposit accounts). The persons leading to the collapsing of the Northern Rock bank include. the directors, the shareholders, the savers, the stakeholders, and the government. However, the stakeholders and the directors have greatly contributed since they led to the bank being nationalized by the British government. The British Bankers Association helped calm down the worried Northern Rock’s customers.

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