1. FIGURE 5.1 MAP OF CORPORATE STAKEHOLDER ACCOUNTABILITY Shareholders: Current, Future, Ethical … Activists Governments Creditors Lenders Suppliers Customers Employees Corporation Others, including the Media, who can be affected by or who can affect the achievement of the corporation’s objectives

2. TABLE 5.1 FUNDAMENTAL INTERESTS OF STAKEHOLDERS Well-offnessThe proposed decision should result in more benefits than costs. FairnessThe distribution of benefits and burdens should be fair. RightThe proposed decision should not offend the rights of the stakeholders and the decision maker. All three interests must be satisfied for a decision to be considered ethical.

3. TABLE 5.2 COST-BENEFIT ANALYSIS: SHORT- AND LONG-TERM PROFIT IMPACT POLLUTION CONTROL EQUIPMENT IMPACT ON PROFIT UNIVERSITY ADMISSION SCHOLARSHIPS IMPACT ON PROFIT Short- Term Long- Term TotalShort- Term Long- Term Total Benefits (Present Valued at 10 percent)$500,000 Reduction in worker health costs $200,000 Increase in worker productivity Improvement in level of earnings of scholarship recipients $600,000 Total benefits $200,000$500,000$700,000$600,000 Costs (Present valued at 10 percent) Pollution equipment $350,000 Scholarships paid $400,000 Total costs $350,000 $400,000 Net benefit-costs($150,000)$500,000$350,000($400,000)$600,000$200,000

4. FIGURE 5.2 STAKEHOLDER IDENTIFICATION AND INTERESTS POWERLEGITIMACY URGENCY Dynamic Influence SOURCES: Mitchell, Agle and Wood, 1997; Rowley, 1997.

5. TABLE 5.4 APPROACHES TO THE MEASUREMENT OF QUANTIFIABLE IMPACTS OF PROPOSED DECISIONS* A. Profit or loss only B. A. plus externalities, (i.e. Cost-Benefit Analysis/CBA) C. B. plus probabilities of outcomes, (i.e. Risk-Benefit Analysis/RBA) D. CBA or RBA plus ranking of stakeholders *Optimal decisions usually result from the most thorough approach.

6. TABLE 5.4 STAKEHOLDER RIGHTS Life Health and safety Fair treatment Exercise of conscience Dignity and privacy Freedom of speech

7. TABLE 5.5 5-QUESTION APPROACH TO ETHICAL DECISION MAKING The following 5 questions are asked about a proposed decision: IS THE DECISIONSTAKEHOLDER INTEREST EXAMINED 1. profitable?Shareholders’–usually short-term 2. legal?Society at large–legally enforceable rights 3. fair?Fairness for all 4. right?Other rights of all 5. going to further sustainable development? Specific rights Question 5 is an optional question designed to focus the decision-making process on a particular issue of relevance to the organization(s) or decision maker involved.

8. TABLE 5.6 MORAL STANDARDS APPROACH TO ETHICAL DECISION MAKING* MORAL STANDARD QUESTION OF PROPOSED DECISION Utilitarian: Maximize net benefit to society as a whole Does the action maximize social benefits and minimize social injuries? Individual rights: Respect and protectIs the action consistent with each person's rights? Justice: Fair distribution of benefits and burdens Will the action lead to a just distribution of benefits and burdens? *All three moral standards must be applied; none is a sufficient test by itself.

9. TABLE 5.7 PASTIN'S APPROACH TO STAKEHOLDER IMPACT ANALYSIS KEY ASPECTPURPOSE FOR EXAMINATION Ground rule ethicsTo illuminate an organization's and/or an individual's rules and values End-point ethicsTo determine the greatest net good for all concerned Rule ethics To determine what boundaries a person or organization should take into account according to ethical principles Social contract ethicsTo determine how to move the boundaries to remove concerns or conflicts