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Social criteria examine diversity, equity and inclusion, labor management, data privacy and security and community relations. Governance criteria deals with a company’s leadership, executive pay, audits, internal controls, board governance, financial performance, business ethics, intellectual property protection and shareholder rights.
Common internal control problems include a lack of a sound internal control environment, poorly designed business processes, weak ethical values and integrity, and IT security risks. They include fraud, security failure, legal breaches, environmental hazards, or natural disasters.
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