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Contemporary Issue For Business And Society

Executive Summary

Looking at the present condition of corporate world there are several contemporary issues that businesses and societies are facing. Herein, considering the fact that businesses need to operate in systematic and reliable manner, top level management has to undertake various steps. For this, responsible management audit has been selected for the current case study. Top level management of business enterprise is responsible for ensuring that systems of internal control are in place, appropriate business practices are employed in the different areas of functioning, overall compliance is maintained and measured to identify frauds and risks so that they can be controlled and effective governance is established.

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Looking at present conditions in the corporate world, it is important for the firms to manage and control their operations in an effective and competent manner so that desired results can be attained. Therefore, it is the duty of senior authority to carry out audit of the firm so that all the loopholes and gaps present in the functioning can be identified and potential measures can be implemented to mitigate that hindrance. Furthermore, through the means of responsible audit management researcher understand the responsibility of company towards four different aspects which are human rights, labour rights, environment and anti-corruption. Further,Nokian Tyres plc has been selected on the basis of which ten essential principal of responsible management audit that UN Global Compact listed Nokian Tyres plc has to undertake in order to carry out business functioning ethically.

Introduction to contemporary issues

In the present study, researcher focuses on understanding the responsibility of management regarding conducting the internal audit at constant basis so that different aspects of business can be managed and controlled in an effective way (Bertot, Jaegerand Grimes, 2010). Furthermore, Nokian Tyres plc has been selected for the research which is a global compact active firm operates in automobiles and parts sectors that is situated in Finland. Therefore, being the global compact active company, it is the responsibility of senior managers of the firm to comply the principles of UN Global Compact which consists of four different dimensions: Human and labour rights as well as environment and anti-corruption.

Responsible Management Audit

In this context, management is responsible for establishing and maintaining the control on environment within the organisation. However, there are several auditors who play a significant role in managing and controlling the internal functioning of business as well as making suitable recommendations for the betterment of business operations (Kim, Kim and Lee, 2009).

Along with this, every individual associated with the enterprise plays a significant role in either strengthening or weakening the company’s internal control system. Thus, it is important for all the employees to be aware of the concept and purpose of the internal controls so that they can mould their functioning accordingly and carry out the operations of Nokian Tyres plc in a reliable manner (Mosleyand Uno, 2007).

Role of internal control:

Nokian Tyres plc’s certain core objectives which are as follows:

  • Nokian Tyres plc’s certain core objectives which are as follows:
  • Effectiveness and efficiency of operations.
  • Reliability of financial and management reporting.
  • Compliance with laws and regulations.
  • Safeguarding of assets (Uvin, 2004).

Senior authority of Nokian Tyres plc is responsible for the internal control which consists of five critical components that are environment control, assessing the risks, potential control measures, information and communication as well as monitoring activities at each level. However, managers of the cited firm develop several policies and procedures under these components in order to achieve the above defined core objectives of Nokian Tyres plc.

Role of Internal audit in corporate governance:

The primary focus of internal auditing relates to the corporate governance which directly or indirectly helps the course of audit committee of the Board of Directors, Nokian Tyres plc to perform their duties and responsibilities effectively.

Nokian Tyres plc participates in United Nation Global Compact (UNGC) initiative that assists in developing the ten principles of responsible business conduct. Following are the four dimensions that cited firm has to comply:

Human Rights

Respecting human rights is essential but along with this, through the means of these principles, Nokian Tyres plc is encouraged to take actions in order to support human rights. Furthermore, it is the duty of senior authority of automobile company to make sure about those actions that are focused on involving human rights in its HR policies. Furthermore, special attention should be paid to the rights of vulnerable groups which consist of women, children, and people with disability as well as indigenous peoples, migrant workers, older persons etc.

Main purpose of complying human rights principles and legislations is that it assists in mitigating various risks and costs for the business. However, in case if companies are unable to follow the principles or do not respect human rights it may put company’s social license to operate at risk, reputational damage, consumer boycotts, exposure to legal liability and adverse government actions (The power of Principles, 2015). Furthermore, it may also lead to adverse actions by investors and other external business partners as well as reduced productivity and morale of the workforce.

Supporting human rights

It is the duty of senior authority of Nokian Tyres plc to make sure that they follow corporate policies which are related to the human rights. It should be particular to those rights which are strategically relevant to the functioning of business. There are two different ways through the means of which senior authority of Nokian Tyres plc can support and respect the human rights such as:

In the workplace:

  • By offering better environment and healthy conditions to carry out work.
  • Ensuring freedom of association (Waddockand Smith, 2000).
  • Most importantly, by making sure that non-discrimination is indulged in the personnel practices.

In the community:

  • By focusing on increasing employment opportunities for the local communities.
  • By avoiding or mitigating the issue of forcible displacement of individuals, group or communities (Rodríguez-Garavito, 2005).
  • Lastly, to ensure security, services should be provided according to the international guidelines and standards.

Respecting for human rights

By understanding the concepts of human rights it can be said that, sometimes it is challenging for a company to talk with its managers, employees and other stakeholders associated with Nokian Tyres plc. However, in order to respect human rights, it is important for the senior authority of cited organisation to promote understanding about the rights of human as well as their importance to the business activities (Korey, 2001). The main benefit of addressing different aspects related to the human rights is that, it helps in motivating managers and employees to deal with different risks and uncertainties associated with business and carry out functioning in the best possible manner. Other than this, Nokian Tyres plc can undertake effective and good human resources policies and practices against the discrimination along with promoting the diversity in the workforce.


Nokian Tyres plc is considered as the socially responsible employer. However, its code of business conduct clearly sets out the mandatory framework for human and ethic operating conditions. Top level management of company constantly focuses on ensuring a non-discriminatory, healthy and safe working environment (Douzinas, 2000). There are four major principles according to the Communication on Progress Report that cited firm has to follow in order to maintain the business standards.

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Business should uphold the freedom of association and the effective recognition of the right to collective bargaining

The main purpose of following this principle is that:


  • Nokian Tyres plc should respect the rights of all workers in order to develop and join a trade union of their choice without any fear of punishment.
  • Company should provide suitable representatives to the workers so that suitable facilities can be offered to them which assist in their effective development of collective agreement (Pogge, 2008).

Community of operations:

Cited firm should take aggressive steps to enhance the level in labour management relations, especially in those countries where legal framework is effective for the trade unions and for collective bargaining (McKinnon, 1988).

Businesses should uphold the elimination of all forms of forced and compulsory labour

As per the rights, labour should be freely given and employees of Nokian Tyres plc should be free to leave as per the established rules and regulations (Van der Wiele and et.al, 2001). In context to Nokian Tyres plc, operating in legal manner does not encourage senior authority to practice forced labour as well as motivate them to enhance their knowledge related to different forms and causes of forced labour so that they avoid such situations within the firm or in the industry. There are several factors about which employee should be aware of such as:

  • Physical abduction or kidnapping.
  • Physical confinement in the work location
  • Child labour in abusive conditions.

Businesses should uphold the effective abolition of child labour

However, association with child labour will likely to damage the reputation of Nokian Tyres plc (Korey, 2001). It is important for the senior authority to strictly comply the policies against the child labour so that brand image within the target market can be improved as well as their dignity can be maintained. Main purpose of following this principle for the Nokian Tyres plc is that:

In the workplace:

  • Nokian Tyres plc ensures in abiding the minimum age provision of national labour laws and regulations so that they can take care of child labour.
  • If, any individual working in the company is below the legal age, then he or she should be terminated (Bertot, Jaegerand Grimes, 2010).
  • In the community of operations:
  • Constantly encourages educational and vocational training as well as counselling programmes for enhancing the development of children. Along with this, encouraging and promoting the launch of supplementary health and nutrition programmes for children so that they can be avoided from the dangerous work and provide better medical services.

Businesses should uphold the elimination of discrimination in respect of employment and occupation

Discrimination can occur at the time of recruitment, remuneration, security of tenure, job prospects etc. Thus, it is the duty of senior authority of Nokian Tyres plc to make sure that they undertake appropriate legislations to eliminate the chances of discrimination so that social tensions can be avoided (Xie, DavidsonandDaDalt, 2003). Main purpose of complying this principle within the functioning is that:

In the workplace:

  • It ensures company in assigning equal duties to the employees so that they can carry out their work effectively.
  • Along with this, promotes and encourages management to provide growing opportunities to all the employees so that they can be motivated (Douzinas, 2000).

In the community of operation:

It helps in developing suitable climate which consists of tolerance and equal access of opportunities for the occupational development.


Nokian Tyres plc has the considerable expertise in offering quality of tyres for all the range of automobiles and it constantly focuses on bringing improvements to its products so that expectations of stakeholders can be met easily.

Businesses should support a precautionary approach to environmental challenges

When there is reasonable suspicion of harm, top level management of Nokian Tyres plc should apply precaution so that degree of uncertainty and risks can be managed and controlled (Korey, 2001). However, there are several companies active in the UN Global Compact employ this principle like Nokian Tyres plc because it assists in developing code of conduct for the operations.

Businesses should undertake initiatives to promote greater environmental responsibility

According to the Rio declaration, it is the duty of business enterprise to maintain clean and better environment (Rodríguez-Garavito, 2005). However, society expects from Nokian Tyres plc to good actors in the community so that better brand image can be created. Main purpose of promoting environmental responsibility for cited firm is that:

  • It assists in defining company’s vision, policies and strategies regarding sustainable development.
  • Ensures establishing sustainable production and consumption programme with a clear set of performance objectives.
  • Along with this, it assists in ensuring transparency and unbiased relationship with the different stakeholders (Xie, DavidsonandDaDalt, 2003).

Businesses should encourage the development and diffusion of environmentally friendly technologies

As defined in Agenda 21 of the Rio Declaration, companies should undertake the technologies which are less polluting as well as make optimum utilisation of all the resources in a sustainable manner (he Ten Principles of the UN Global Compact, 2015). Main purpose of indulging this principle within the functioning of Nokian Tyres plc is that:

  • It helps in implementing environmental friendly technologies as well as assists in reducing the use of raw materials and enhances efficiency.
  • It also creates new development opportunities and helps increasing overall competitiveness.


Nokian Tyres plc is committed to conduct its business as per the high ethical standards and in compliance with all the applicable laws (The power of Principles, 2015). However, cited firm is strongly dedicated in following the principles of good corporate governance that enhance culture.

Businesses should work against corruption in all its forms, including extortion and bribery

This is the tenth principle which was employed against the corruption in 2004 and commits UN Global Compact participants not only to avoid bribery but as well as extortion and the other forms of corruption. Furthermore, companies are forced to work collectively and join civil society. In order to avoid corruption, Nokian Tyres plc can undertake three elements of UN Global Compact:

  • Internal: To avoid corruption, senior authority of Nokian Tyres plc has to introduce anti-corruption policies and programmes.
  • External: In this management can report the work done against the corruption so that awareness can be spread within the target market.
  • Collective actions: Through the means of different organisations, Nokian Tyres plc can take actions against corruption so that effective measures can be employed (Pogge, 2008).


In conclusion to the above report, it can be said that internal audit is one of the major aspects that top level management of an organisation has to carry out. Herein, Nokian Tyres plc management has been recommended 10 principles to improve their internal as well as external functioning so that better results and outcomes can be achieved.


  • Bertot, J. C., Jaeger, P. T. and Grimes, J. M., 2010. Using ICTs to create a culture of transparency: E-government and social media as openness and anti-corruption tools for societies. Government information quarterly. 27(3). pp.264-271.
  • Douzinas, C., 2000. The end of human rights: Critical legal thought at the turn of the century.
  • Durden, C., 2008. Towards a socially responsible management control system. Accounting, Auditing & Accountability Journal. 21(5). pp.671-694.
  • Kim, S., Kim, H. J. and Lee, H., 2009. An institutional analysis of an e-government system for anti-corruption: The case of OPEN. Government Information Quarterly. 26(1). pp.42-50.
  • Korey, W., 2001. NGOs and the Universal Declaration of Human Rights. Refugee Survey Quarterly. 20(3).
  • McKinnon, J., 1988. Reliability and validity in field research: some strategies and tactics. Accounting, Auditing & Accountability Journal. 1(1). pp.34-54.
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