Gov­ern­ing re­spons­ible busi­ness: risk man­age­ment, re­port­ing and fin­ance between sustain­ability ex­pect­a­tions and com­pli­ance

Course content

Target group, background, aim and value of the course

This course is relevant for students with an interest in SMEs as well as students with an interest in larger companies, globally and in Europe. It is also relevant for students with an interest in the governance of responsible business conduct from the perspective of governments, international organizations or civil society.

Responding to demands on responsible business is becoming a maze of soft expectations on sustainability and hard demands for compliance. This can be particularly challenging for small-and-medium sized companies (SMEs) who supply to large companies, such as multinational corporations (MNCs). Whereas MNEs are typically subject to softer expectations, MNCs are increasingly covered by hard-law demands on various issues of corporate sustainability. To comply with those demands, multinationals often pass them on to SMEs through contracts or other tools for assessing and steering their supply chains. In addition to production, this affects a range of functional management tasks, such as risk management (e.g., through corporate sustainability due diligence); non-financial reporting/ESG or CSR reporting; financial management and access to finance; stakeholder management; human resource management; contract management, etc. Large companies may hire legal specialists, but SMEs need general or functional managers with an understanding of the demands of their MNCs partners as well as relevant soft standards and guidelines.

This course equips students with knowledge to understand those demands and expectations, identify the implications and apply them in specific functional management contexts, such as those mentioned above. In many of these cases, business opportunities and challenges around climate change mitigation and adaptation, textile and garment production, and forestry and agriculture will serve as the framing.

The course looks particularly at

- the EU’s ‘sustainability governance tsunami’, which embodies demands on large companies and institutional investors that they are in many cases expected or intended to cascade on to SMEs, also those outside the EU itself, typically in the Global South. The EU requirements therefore also apply to companies in many other countries, making the course is relevant to students from all parts of the world.

- softer guidelines and standards with global or regional application, such as responsible business conduct guidance under the OECD and other international, transnational or public-private sector organizations.

The course will provide students with knowledge of relevance for functional managers, whether or not they have access to in-house legal expertise. The knowledge will assist students understand the demands, assess the implications, apply them and explain the demands to colleagues and business partners. No prior knowledge of law is required.

We consider EU demands, because this region has taken a particular lead in regulating corporate sustainability, leading to an exceptional growth in requirements on managers in regard to corporate sustainability reporting, outward risk management in supply chains through corporate sustainability due diligence, and responsible investment that takes account of climate change impacts, and generally doing business with respect for the environment, working conditions and human rights. The EU requirements not only affect supply chain management and other business interaction with companies from outside the EU, but are also expected to shape new demands adopted in other regions on similar issues.

We also examine softer standards and guidelines developed by international organizations like the OECD and the United Nations (UN) and public-private organizations, and look at their application, role and implications across business relationships, regions, sectors and value chains. Over the past 15 years, there has been a surge in such guidelines and standards in regard to responsible business conduct (RBC), especially in regard to textiles and garments, mining and minerals, and energy sources and agricultural products.

We also consider how these soft expectations and hard compliance demands are deployed by civil society and governments/authorities in efforts to govern business conduct towards sustainable and responsible business conduct.

Students attending this course will graduate with expertise that is becoming in high demand on the implications of legal and softer demands on responsible business conduct, how to internalize those in business operations and management contexts, and how to expand responsible business through various governance methods and tools.

Providing unique learning that no other CBS course offer, the course will complement other CBS courses on sustainable business, sustainability governance, responsible business conduct and finance including ESG.

Teaching methods

Class time will include lectures, case work, presentations by guest lecturers from corporations and business associations, civil society and Danish authorities and group assignments and presentations.

Readings

The course will be based on academic articles and texts; complemented by legal texts and reports from companies, civil society and authorities. Most readings will be available online. Those that are not will be made available on Canvas. The readings will comprise academic and empirical texts on soft guidance and hard legal demands, cases shaping the understanding of those demands, as well as academic articles on wider business governance, business ethics and management.

Relationship to the ‘Nordic Nine’

The course is solidly anchored in CBS’ Nordic Nine: it develops students’ disciplinary skills and transformational capacities through advancing their business knowledge placed in the increasingly regulatory context governing sustainable and responsible business, responding to students’ curiosity about what that regulatory landscape means for functional management disciplines and providing them with data (on the hard and soft law demands and their implications for management), recognizing and explaining how the regulatory demands respond to humanity’s sustainability challenges and providing students with knowledge on how to contribute; the course is anchored in values on sustainable and responsible business recognized in vast amount of interdisciplinary literature as well as international politics and governance instruments and business commitments; and it advances students’ understanding of dilemmas around those values and how to overcome them through critical thinking and constructive collaboration. Through the knowledge and value-basis the course advances students’ action-oriented capacities for producing prosperity and protecting that of future generations, growing by teaching to others in a business and wider organizational environment based on insights from the course, and creating value for local communities of various forms based on awareness of the global issues at stake and their regulatory implications for management.