Corporate Social Responsibility (CSR) is associated with the conduct of corporations and in particular whether corporations owe a duty to stakeholders other than shareholders. Whilst the phrase ‘Corporate Social Responsibility’ may be gaining momentum, the concept itself is not new. The question as to whether corporations owe duties to broader stakeholders has been debated at various times throughout the twentieth century.
The CSR debate has largely revolved around the conduct of multinational corporations (MNEs) and other large private companies which, due to their size, have the ability to significantly influence domestic and international policy and the communities in which they operate. Central to the debate is the perceived deficiency of national and international law remedies regarding corporate accountability, in particular the ability of available regulation to successfully regulate a corporation’s conduct in jurisdictions outside the corporation’s home state. Proponents of CSR argue that the efficient functioning of global markets depends on socially responsible business conduct
There are a number of factors relevant to the current CSRdebate, including:
– globalisation and the proliferation of cross‐border trade by MNEs resulting in an increasing awareness of CSR practices relating to areas such as human rights, environmental protection, health and safety and anti‐corruption;
– organisations, such as the UN, the Organisation for Economic Co‐operation and Development (OECD) and the International Labour Organisation (ILO), have developed compacts, declarations, guidelines, principles and otherinstruments that outline norms for acceptable corporate conduct;
- access to information and media enables the public to be more informed and to easily monitor corporate activities;
- consumers and investors are demonstrating increased interest in supporting responsible business practices and are demanding more information as to how companies address risks and opportunities relating to social and environmental issues;
– recent high profile corporate collapses have contributed to public mistrust and the demand for improved corporate governance, accountability and transparency;
– commonality of expectations by citizens of various countries with regard to minimum standards corporations should achieve in relation to social and environmental issues, regardless of the jurisdiction in which the corporation operates; and
– increasing awareness of the inadequacy of current regulations and legislation with regard to CSR matters and the regulation of MNEs.
Interestingly, the fundamentals of CSR are considered to be universal reflecting the globalisation of business and economies. The traditional ethos of maximising shareholder value withoutregard to other stakeholders is an outdated notion in today’s global environment. CSR not only sits comfortably with the mantra of maximising shareholder value, sustainable CSR practices enhance shareholder value… Continue reading