Corporate Governance and Corporate Social Responsibility Synergies and Interrelationships Dima Jamali*, Asem M. Safieddine and Myriam Rabbath
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Corporate Governance and Corporate Social Responsibility Synergies and Interrelationships Dima Jamali*, Asem M. Safieddine and Myriam Rabbath
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Corporate Governance and Corporate Social Responsibility Synergies and Interrelationships Dima Jamali*, Asem M. Safieddine and Myriam Rabbath
- 1. Corporate Governance & Corporate (Social Responsibility Synergies and Interrelationships) Group Members: M.Rehman Shabbir-005 Farhan Abbas Rizvi-081 M.Salman Shahid-021 Faizan Anjum-101 Date: Sunday, 13 April 2014
- 2. Paper will focus on Corporate Governance (CG) Corporate Social Responsibility (CSR) Synergies and Interrelationships
- 3. Corporate Governance CG The system by which companies are directed and controlled ◦ CG encompasses ◦ the notions of compliance, ◦ Accountability ◦ transparency How managers exert their functions through compliance with the existing laws regulations and codes of conduct
- 4. CG encourage the companies To promote ethics or fairness Transparency, and accountability in all their dealings They are expected to continue generating profit Maintaining the highest standards of governance internally
- 5. Corporate Social Responsibility (CSR) demonstrates Companies should balance interests of ◦ Customers ◦ Communities ◦ Business partners ◦ employees with those of shareholders To meet public requirements for CSR compliance.
- 6. Corporate Social Responsibility (CSR) Evolved largely in the early 21st century Basic standards of business ethics Taken simple concepts of honest and transparency Added expectations for companies of social and environmental responsibility
- 7. Result CSR is based on self-regulatory principles linked to internal and external management of the company. Corporate governance‟ indicates to an idea of company's governance and management issue Corporate governance is a broad theory concerned with the alignment of management and shareholder interest
- 8. Four Key Pillars of Corporate Social Responsibility (CSR) Strategic Governance Human Capital Strategic scanning capability Agility / adaptation Performance indicators/monitoring Traditional governance concerns International “best practice” Labor relations Recruitment / retention strategies Employee motivation Innovation capacity Knowledge development
- 9. Four Key Pillars of Corporate Social Responsibility (CSR) Stakeholder Capital Environment Regulators and policy makers Local communities/NGOs Customer relationships Alliance partners Brand equity Cost/risk reduction Market share growth Process efficiencies Customer loyalty Innovation effect
- 10. Corporate Social Responsibility Embedded in Corporate Governance Strategic Leadership Stewardship Board Structure Capital Structure & Market Relations Social Responsibilities
- 12. CG and CSR as Part of a Continuum Integrative framework varying degrees of compliance
- 13. RESEARCH METHODOLOGY Top managers of eight corporations Screening provided a preliminary idea Interviews Case studies
- 16. FINDINGS & THEORETICAL PROPOSITIONS(cont.) Awareness of international codes of good governance • Counterbalanced • Appreciation • Needs to be considered in context • Practices are invariably influenced • Moulded by national institutional environments • Cultural • Economic Various constraints stemming from • Macroeconomic instability • Very limited attention • Capacity of the regulatory • Judicial systems in the country.
- 17. FINDINGS & THEORETICAL PROPOSITIONS(cont.) • Local socio-politico-institutional environments significantly affect CG practices in developing countries. Proposition 1 • Limited institutional pressures for homogenization in CSR translate into philanthropic and instrumental CSR orientations in developing countries. Proposition 2 • Good CG is increasingly considered in developing country contexts as a necessary foundational pillar for a genuine and sustainable CSR orientation. Proposition 3 • good CG in developing economies is increasingly complemented by due regard and consideration for voluntary corporate social performance. Proposition 4
- 19. CG and CSR are two sides of the same coin (Bhimani & Soonawalla, 2005). It posits CG as a necessary foundational pillar or building block for CSR Hancock (2005) It illustrates the crossconnects between CG and CSR revolving around strategic leadership and stewardship as implied in Ho’s (2005)
- 20. CONCLUDING CG & CSR should not be considered and sustained independently CG necessary pillar for CSR CSR orientation in internal roots of CG foundation CG is not entirely effective without a sustainable CSR CG sets the overall tone for the organization
Editor's Notes
- Rehman Part
- Faizan PartThe process of paying close and continuous attention
- Based on the research presented in this paper, and on the insights derived through the empirical component and discussions with managers, we propose a model that summarizes the main interfaces of CG and CSR (Figure 4). The model illustrates our starting assumption in this paper that CG and CSR are two sides of the same coin (as per Bhimani and Soonawalla, 2005).Second, it posits CG as a necessary foundational pillar or building block for CSR as per Hancock (2005). Third, it illustrates the crossconnects between CG and CSR revolving around strategic leadership and stewardship as implied in Ho’s (2005) postulation (reiterating in this respect the point that CSR is equally the responsibility of corporate boards) while also capturing the overlap between CG and the internal dimension of CSR revolving primarily around progressive human resource management (as in Table 2)suggesting increasing convergence between the views of both principals and agents regarding a widened stakeholder approach, reconciling basic principles of CG and CSR.