Glossary

A document outlining the rules, obligations, and limitations that users agree to when using a product, service, or website. It often includes policies on privacy, liability, and user conduct.

Taking responsibility for one's actions, decisions, and their outcomes within an organization.

Intentional participation in workplace discussions, decisions, and problem-solving processes.

Policies and practices that aim to increase opportunities for groups who have historically faced discrimination, such as women and minorities, in areas like education and employment.

A conflict of interest where one party, motivated by self-interest, is expected to act in another's best interest. See more

A person or organization authorized to act on behalf of a principal in business dealings. The agent has a duty to act in the principal’s best interest and within the authority granted. See more

Literally meaning "friend of the court," an amicus curiae brief is a legal document submitted to a court by someone who is not a party to the case (that is, someone not directly involved in the case) but has a strong interest in its outcome.

Deep, often unconscious beliefs held by members of an organization that shape how they interpret experiences, interact with others, and make decisions.

Evaluative orientations toward people, situations, or policies that consist of beliefs, feelings, and behavioral tendencies. Attitudes influence how individuals interpret and respond to organizational events and experiences.

A subcommittee of the board of directors tasked with overseeing financial reporting, internal controls, and the external audit process. To ensure independence, all members must be unaffiliated with management, and at least one must be a qualified financial expert.

Authoritative guidelines that govern the conduct of financial audits, ensuring accuracy, independence, and consistency in audit practices. In the United States, these standards are issued by the Public Company Accounting Oversight Board (PCAOB).

A leadership approach based on self-awareness, relational transparency, and consistency between one's values, beliefs, and actions.

The consistency between a person's stated values, internal beliefs, and outward behavior.

Reviews of organizational systems or outcomes to detect and reduce unfair bias, especially in areas like hiring, promotion, or algorithmic decision-making.

An intangible source of corporate value derived from reputation, trust, or identity.

Offering or receiving something of value to influence a person's decision inappropriately.

A broad term for the money or other assets that are used by a business to generate returns. See more

Chief Executive Officer, the highest-ranking person in a company or other institution, ultimately responsible for making managerial decisions.

A chief financial officer is a senior executive responsible for a company's financial operations.

A workplace condition where excessive working hours become routine, often normalized in high-pressure or tech-driven environments

A broad term that refers to organizations and institutions outside of government and business, including NGOs, advocacy groups, professional associations, and grassroots movements. Civil society actors often influence corporate accountability and shape ESG expectations.

A shared understanding of organizational goals and values among members.

The erosion of local decision-making power due to corporate actions or large-scale economic restructuring.

(e.g., Global Compacts) Voluntary international agreements in which firms pledge adherence to social or environmental principles, such as the UN Global Compact.

The demonstrated ability to carry out a role or task effectively through having the necessary knowledge, skills, and capabilities.

Adherence to applicable laws, regulations, and internal rules. In governance contexts, compliance serves as both a legal safeguard and an ethical baseline.

An internal system of rules, training, oversight, and enforcement designed to help an organization follow laws, regulations, and ethical standards.

Situations in which a person’s private interests risk compromising their professional judgment. Ethical governance requires these conflicts to be disclosed and properly managed.

A business entity that offers its owners a degree of protection from liability. Learn more about this important concept.

The abuse of entrusted authority for personal or institutional gain.

A firm-wide commitment to ethical conduct, where legal obligations are not merely met but embedded in decision-making, communication, and leadership expectations.

Also known as willful blindness, this refers to intentionally avoiding knowledge of unethical or illegal conduct in order to escape accountability. It violates the duty of good faith in governance.

The removal or reduction of government rules and oversight, typically justified by appeals to market efficiency.

Organizational systems that ensure material information, particularly financial and ethical disclosures, is shared accurately, completely, and in a timely fashion with regulators and stakeholders.

The substance of what is shared publicly about a firm’s operations, risks, and financial condition. Transparent disclosures are foundational to market trust and legal compliance.

Unequal or unjust treatment of individuals based on traits such as race, gender, religion, age, or disability.

The presence of differences within the workforce across identity, experience, background, and perspective.

A framework for evaluating a firm’s ethical and societal performance. ESG metrics assess how responsibly a company treats the environment, manages relationships with stakeholders, and upholds governance standards.

Public disclosures about a company’s performance on Environmental, Social, and Governance issues, usually voluntary and variable in rigor.

The belief that one’s own cultural norms, values, or practices are inherently superior to those of others.

Eudaimonia (εὐδαιμονία): A central concept in Aristotelian ethics, often translated as "flourishing" or "human well-being." It refers to living a life in accordance with virtue and reason, fulfilling one's potential, and achieving a deep, lasting sense of fulfillment rather than mere pleasure.

The executive branch of the European Union responsible for proposing legislation, enforcing EU laws, and managing day-to-day operations. It plays a central role in developing and enforcing sustainability and corporate reporting regulations such as the CSRD.

Financial and non-financial rewards such as stock options, bonuses, or performance targets that influence managerial decisions. Poorly designed incentives can distort priorities, while ethically aligned ones encourage long-term value creation.

The relevant knowledge or skill needed to make informed, responsible decisions. In governance, directors are expected to either possess or seek appropriate expertise when assessing complex issues.

A financial review that is conducted by a party not associated with the company or department that is voluntarily or involuntarily under audit See more

Official reports and disclosures that companies submit to regulatory bodies such as the SEC. These filings typically include financial statements, risk disclosures, governance details, and ESG reports, and are legally required for publicly traded firms.

An organization that conducts business activities, such as corporations and partnerships, to make profits.

The ability to anticipate future risks, opportunities, and consequences. In governance, foresight distinguishes reactive management from strategic leadership.

The structures and processes by which firms are directed and controlled. Governance defines who has authority, how decisions are made, and how accountability is upheld.

The practice of intentionally removing barriers so that all employees have equitable access to participation, voice, and opportunity.

Involving individuals from varied roles and perspectives in the process of forming decisions.

An organizational setting where people from different backgrounds and identities feel respected, valued, and able to participate fully.

A situation in which one party in a transaction has more or better information than the other, often leading to an imbalance in power and potentially inefficient or unfair outcomes.

The formal and informal structures (e.g., laws, norms, enforcement bodies) that shape how businesses behave and define responsibility.

Made part of a firm’s regular operations or culture. When ethics, risk management, or compliance practices become institutionalized, they are no longer occasional fixes; they are ongoing norms.

Creations of the mind, such as inventions, designs, or proprietary methods, that hold commercial value. Unauthorized use or disclosure by fiduciaries breaches loyalty obligations.

Operational systems designed to ensure reliable financial reporting, prevent fraud, and support regulatory compliance.

Relating to communication, relationships, and behavior between individuals or groups within an organization.

The executive is aware that the financial report does not comply with SOX requirements but certifies it anyway

A listed company issues shares of its stock for trading on a stock exchange. See more

An adverse outcome in a free market system in which the forces of supply and demand fail to ensure the efficient distribution of goods and services.

A strategy by which a firm shapes its identity and appeal in the marketplace, often using CSR as part of its branding narrative.

Significant alterations in a company's operations, governance, or risk profile that could reasonably influence investor decisions. Public companies are legally required to disclose material changes in their filings.

Risks that are likely to have a meaningful impact on a firm's financial condition or performance. In ESG reporting, materiality refers to the relevance of sustainability issues to both investors and affected stakeholders.

An organizational structure in which individuals report to multiple managers (e.g., a software engineer might report to the Engineering Director who oversees the technical aspects, and to the Project Manager who is managing a product rollout to a specific client).

"Everyday verbal, nonverbal, and environmental slights, snubs, or insults, whether intentional or unintentional, that communicate hostile, derogatory, or negative messages to target persons based solely upon their marginalized group membership." --definition from the National Equity Project

A management style characterized by excessive control or attention to small details, often limiting employees' autonomy.

A statement detailing what the organization does, for whom, and why.

The status of morally deserving praise, blame, reward, or punishment for an act or omission in accordance with one's moral obligations. See more about this important philosophical concept.

Schemes that allow firms to “compensate” for harm (e.g., emissions) by investing in unrelated beneficial projects like tree planting.

Perceptions are subjective, influenced by individual differences, past experiences, and contextual factors, and may differ significantly from objective reality.

An entity, such as a corporation, that influences public policy, law, or social norms and not just market outcomes.

Using deliberation, reflection, and thought to decide how to act, especially in relation to moral or ethical choices.

A person or entity who authorizes an agent to act on their behalf in a business transaction or relationship. See more

A business that is owned privately and does not trade its shares on public exchanges. They are not subject to the same regulatory requirements as public companies.

Sensitive, non-public business data, such as pricing strategies, trade secrets, or customer lists, that confer competitive advantage. Misuse or unauthorized disclosure undermines trust and may constitute misconduct.

A workplace climate in which individuals feel free to speak up, question decisions, and report concerns without fear of negative consequences.

The principle that firms should be answerable to the public, not only to shareholders or voluntary codes.

Companies whose shares are traded on public stock exchanges. These firms are subject to heightened disclosure requirements, including mandatory governance and financial reporting. See more

Organizations that assess and score the creditworthiness or ESG performance of firms. This includes credit agencies (Moody's, S&P) and ESG rating providers (MSCI, Sustainalytics). Their evaluations influence investor decisions and can shape corporate access to capital.

A defense mechanism in which people justify difficult or unacceptable feelings with seemingly logical reasons and explanations.

Governmental or independent bodies responsible for overseeing compliance with legal and ethical standards in specific sectors. Examples include the Securities and Exchange Commission (SEC) and the PCAOB.

Government bodies tasked with enforcing laws and standards. In the U.S., examples include the SEC (financial reporting), EPA (environmental protection), and OSHA (workplace safety). Regulatory agencies define and oversee required corporate disclosures.

The risk that a company’s public image will change quickly in response to controversy, scandal, or shifting expectations.

To punish an individual, often a whistleblower, for reporting misconduct or cooperating with investigations. The Sarbanes-Oxley Act prohibits retaliation against employees who raise concerns in good faith.

Named after bill cosponsors, U.S. Senator Paul Sarbanes (D-MD) and U.S. Representative Michael G. Oxley (R-OH), the Sarbanes-Oxley Act was US legislation passed into law in 2002 that mandates certain practices in financial record keeping and reporting for corporations. See the text of the bill

Greenhouse gas emissions that occur in a company's value chain but are not directly owned or controlled by the company. This includes emissions from suppliers, product use, business travel, and waste disposal. Scope 3 is often the largest share of a company's total carbon footprint.

When firms set and monitor their own ethical or environmental standards without external oversight.

Employee feelings and emotional responses toward their work environment and organizational experiences.

An organizational norm that encourages individuals to report concerns, raise ethical questions, and challenge inappropriate behavior without fear of negative consequences.

Spiritual leaders emphasize integrity, ethical treatment of others, and the development of meaning and purpose in work, fostering an environment where individuals feel spiritually fulfilled and connected to something greater than themselves.

Changes aimed at correcting underlying systemic problems rather than addressing symptoms or offering surface solutions.

The network of organizations, people, and activities involved in creating and delivering a product from raw materials to the final consumer.

A specific, defined unit of work or activity assigned to individuals or teams to advance organizational objectives.

Work environments characterized by persistent patterns of disrespectful, unethical, or harmful behavior.

Situations where pursuing one goal (e.g., profit) may require compromising another (e.g., fairness or sustainability).

The time, effort, and resources needed to complete an economic exchange, such as finding information, negotiating, developing and creating the product or service, and enforcing agreements

Transactional Leadership: A leadership or relational style based on exchange in which compliance is traded for reward or avoidance of punishment.

The open sharing of relevant information, rationale for decisions, and expectations.

A framework that assesses corporate performance across social (people), environmental (planet), and financial (profit) dimensions.

A standardized set of regulations for conducting business and financial transactions in any state in the U.S. It is not a federal statute but a state law that has been adopted by all 50 states and the District of Columbia.

An aspirational statement that describes what an organization seeks to become or achieve in the long term.

Legal guarantees that shield employees who report suspected wrongdoing from adverse treatment. These protections are essential to fostering transparency and are mandated by statutes such as the Sarbanes-Oxley Act.

The executive both knows the report doesn't comply AND acts with intent to deceive investors, regulators, or other stakeholders