GOVERNANCE AND ETHICS
Learning Unit 6 : CSR, sustainability, and corporate citizenship
Theme 1: Corporate citizenship, responsibility, and sustainability
LO1: Explain the concept of corporate citizenship with specific reference to:
Corporate social responsibility (CSR) and corporate social investment (CSI); The
impact of companies on society; and How the profit motive of a company is married
with corporate citizenship.
Can companies be citizens?
As legal beings they have no physical existence, companies can only act through their
human agents.
They are incapable of the kind of physical present human beings haven't society, yet through
their actions they are able to have significance and far-reaching impact on society.
Accompanies both an economic institution and a corporate citizen.
The reference to companies as corporate citizens is a metaphorical reference to the fact that
companies have a presence like or exceeding that of a society's human citizens.
The concepts of corporate citizenship is complex and it is often difficult to separate activities
implied by corporate citizenship from other corporate activities such as reputation building
common marketing and public relations.
These days we have high expectations of what companies should be. It is not enough that
they have good products.
They also need to be good citizens; we expect them to:
- minimize their social and environmental harm,
- to report their impacts, and give money to charity
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, The lobby for good corporate citizenship has gained in prominence and the study of
corporate governance:
- A company's corporate citizenship credentials are now as important as its regulatory
compliance and risk management practice in evaluating the quality of a company's
corporate governance.
- But a company's corporate social responsibilities must coexist where and not
override a corporation's fundamental obligation to make a reasonable return for its
investors.
Corporate social responsibility (CSR) and corporate social investment (CSI)
} Corporate citizen: co is a person in its own right
} Corporate citizenship: emphasizes the idea the corporations have rights and duties
as individuals that are distinct from those of their shareholders and directors.
} Corporate social responsibility focuses on the good that companies are expected to
do in the course of being or becoming good corporate citizens.
} Corporate Social Investment: one element of a CO’s CSR.
Corporate social responsibility
- Focuses on the good that companies are expected to do in the course of being good
corporate citizens.
- The World Bank defines it as the commitments of business to managing and
improving the economic, environmental, and social implications of its activities at the
firm, local, regional and global levels.
The term corporate social responsibility and corporate social investments have historically
been used interchangeably but recent trend has been to recognize CSI as one element of a
company CSR activities.
CSI should not be viewed as an exercise in grudging compliance rather companies should
seek to ensure that their business success is visible in the communities in which they
operate.
CSR policies should be integrated across a company to avoid missing synergies and
reducing compliance to a tick box exercise.
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