CSR and Governance Summary

Corporate Social Responsibility (CSR)

  • CSR addresses how businesses meet needs while respecting community values.
  • Corporations use financial wealth and economic impact to contribute to the common good.
  • CSR categories:
    • Environmental responsibility
    • Ethical responsibility
    • Philanthropic responsibility
    • Economic responsibility

Corporate Citizenship

  • Recognizes the organization as part of broader society.
  • Corporates have constitutional rights and responsibilities.
  • CSR focuses on responsibilities beyond legal requirements.

Triple Bottom Line

  • Businesses expand life expectancy by focusing on:
    • Profitability
    • Environmental quality
    • Social justice
  • TBL=People+Profit+PlanetTBL = People + Profit + Planet

CSR in Business Management

  • Includes:
    • Virtual community engagement
    • Measuring CSR impact
    • Role model behavior
    • Focus on sustainability
    • Equity and diversity
    • Employee volunteer programs

Drivers of CSR

  • Social: Consumer and employee preferences for responsible companies.
  • Governmental: Compliance beyond the letter of the law.
  • Market: Increased revenue through new products, market growth, and avoiding boycotts.
  • Ethical: Responsible business dealings.

Corporate Governance

  • System by which companies are managed and controlled.
  • Board of directors leads the company in the best interests of shareholders.
  • Directors have fiduciary responsibilities.
  • Executive vs. Non-executive directors.

Governing Body Responsibilities

  • Steers strategic direction.
  • Approves policy and planning.
  • Ensures accountability.
  • Oversees implementation.

Corporate Governance Compliance

  • Voluntary governance codes (e.g., King IV report).
  • Adherence may have legal consequences.

Principles of Good Governance

  • Ethical leadership.
  • Ethical culture.
  • Responsible corporate citizenship.
  • Sustainable development.
  • Stakeholder-inclusive approach.

CSR and Corporate Governance

  • CSR program embedded in a board-level structure.
  • Policy establishment:
    • Values-based system
    • Stakeholder-engagement process
    • Combination of both

Sustainable Development

  • Meets present needs without compromising future generations.
  • Considers needs of the world’s poor and environmental limitations.

Stakeholder Engagement

  • Companies engage to understand and respond to societal expectations.
  • Builds better relationships and improves business planning.
  • Aligns business practices with societal needs.

Defining Stakeholders

  • Persons or groups affected by a company’s business activity.
  • Primary: Vital for company survival (contractual or financial relationship).
  • Secondary: Less direct impact (e.g., NGOs, media).

Principles for Stakeholder Engagement

  • Involvement
  • Candour
  • Relevance
  • Learning
  • Action

Stakeholder Engagement Process

  • Competencies and resources for participation.
  • Identification and understanding of stakeholders.
  • Appropriate engagement strategies.
  • Stakeholder involvement in decisions.

CSR Contribution to Sustainable Development

  • Private sector contributes through finances, expertise, and technology.