10. Mrs Walker, a computer consultant, did some work for Micro Inc. The agreed fee for her work was $12,000. Her husband is out of work; therefore she invoiced Micro Inc, and asked that it make the cheque payable to her husband. Mrs. Walker plans to have the $12,000 reported on her husband's tax return. Required: Discuss how the CRA would treat this $12,000 item. Why? What are the tax consequences. STI SUSTAINABILITY AND CORPORATE GOVERNANCE BM1807 Definition and the Triple Bottom Line (TBL) of Sustainability Sustainability involves business practices that satisfy the needs of the present without compromising the ability of the future generation to meet their own needs. It involves management of a company's profit or loss, social responsibility, and environmental responsibility. Beattie (2017) described the "Triple Bottom Line" (TBL) or the three (3) pillars of sustainability as follows: The Economic Pillar. This ensures economic efficiency and income for businesses. In order to become sustainable, a business must be profitable. This pillar of sustainability includes business activities such as compliance, proper governance, and risk management. The Social Pillar. This ensures the quality of life, safety, and services for citizens. In order to become sustainable, a business should have the support and approval of its employees, stakeholders, and the community where it operates in. The approaches in securing and maintaining this support boil down in treating employees fairly and being a good neighbor and community member in the local and global arena. The Environmental Pillar. This ensures the availability and quality of natural resources. In order to become sustainable, businesses should focus on reducing their carbon footprints, packaging waste, water usage, and their overall undesirable impact on the environment. Sustainable Business Practices Confino (2014) highlighted the following sustainable business practices of global companies: Stakeholder engagement: PepsiCo. The company presents its sustainability strategy and goals, focusing on climate change, water scarcity, and public health issues. Employee engagement: General Electric. The company is using its human resource department to integrate sustainability into the company's culture, ranging from hiring practices and training to employee wellbeing programs. Water stewardship: Coca-Cola. The company has improved the efficiency of its water use by 20% and identified the need for a rigorous third-party evaluation of its water management approach. Supply chain management: Ford Motor Company. The company has established requirements for first-tier suppliers to drive its environmental and social expectations. It also works with its suppliers to establish greenhouse gas emission reduction and energy efficiency targets. Innovation: Nike. The company has integrated sustainable design across its product portfolio and created the "Making app" in 2013, allowing the data in its materials sustainability index to be public. This lets designers from across the industry and beyond make more sustainable design decisions, and ultimately, lower-impact products. Management accountability: Xylem. The water technology company established a sustainability steering committee and an enterprise risk committee. The function of the established committees is to identify senior executives who will be held accountable for sustainability performance. Executive compensation: Exelon. The energy producer has introduced an innovative long-term performance share scheme that rewards executives for meeting non-financial performance goals such as safety targets, greenhouse gas emissions reduction targets, and goals engaging stakeholders to help shape the company's public policy positions. Biodiversity: Pacific Gas & Electric Company. The company has established an environmental policy that focuses on habitat and species protection. It also publicly reports the detailed findings relevant to its environmental protection efforts. Investor dialogue: Starbucks. The company has partnered with the local communities where they operate, by introducing the concept of sustainable farming that aims to provide livelihood for the people. This initiative allows the company to accelerate investments in sustainable farming and reach their goal for 100% ethically sourcing of coffee beans. Disclosure: Brown-Forman. The major distributor of wine and spirits uses ingredients that are both climate sensitive and water intensive. It demonstrates that sustainability is a way to build consumer relationships and enduring brands. The company focuses on initiatives related to climate change, water scarcity, and water quality. Corporate Governance Corporate governance pertains to the system of rules, practices, and processes by which a firm is directed and controlled. It essentially involves balancing the interests of a company's stakeholders such as shareholders, management, customers, suppliers, government, and the community. According to Lister (2017), the following are the functions of corporate governance: Goals and risk management. Corporate governance through the board of directors set the policies and procedures to effectively meet a company's short and long-term investment goals while working to manage business risk. The board of directors manages the risk involved with each investment opportunity through careful examination of the opportunity's value while forecasting the problem that may occur in the long run. This allows the company to plan for potential trouble spots and develop strategies to avoid them. Corporate accountability. Corporate governance functions to ensure accountability within the board of directors as well as the company's larger management structure. This provides a system of counter-checking to make sure that certain company procedures and initiatives are being carried out properly. It also allows greater mobility in the company in terms of goal or project methods adjustment, if in any case, an investment opportunity produces smaller returns than projected. Shareholder meetings. Corporate governance requires shareholders to remain well-informed of the company's financial health and the status of its ongoing business initiatives. The board of directors must schedule regular meetings to keep the shareholders informed about the company's level of profitability, its strategies for achieving goals, and any problems it foresees in the market that may cause them to fall short of meeting those goals. Shareholders who are kept well-informed of company practices are more likely to trust the board of directors and remain as corporate investors as opposed to selling company stock. Government regulations. Corporate governance ensures transparency concerning corporate government regulations. These rules involve a wide variety of required procedures, including regular financial reporting, ethical treatment of workers, safe environmental practices, and handling of hazardous materials.