The Imperative of Corporate Social Responsibility in the Present-Day Governance

Abstract

There is a surging demand on the corporate sector to conduct sustainable business practices and this has led to the emergence of a new consciousness, which has come to be known as Corporate Social Responsibility (CSR). It is a sort of built-in and self-regulating mechanism by which a company monitors and ensures its dedication and commitment for complying with the spirit of law, ethical standards, and national and international norms. It enables the integration of business interests with that of the communities. Its ultimate aim is to contribute to sustainable development. The key drivers for CSR are enlightened self-interest, social investment, transparency and trust, and increased public expectations of business. An organisation's performance in a socially responsible manner can influence its competitive advantage; reputation; capability to attract and keep hold of workers, members, customers, clients, users; maintenance of morale, commitment and productivity of employees; view of investors, owners, donors, sponsors and the financial community; and relationship with companies, governments, media, suppliers, customers and the community in which it operates. Numerous CSR initiatives have been taken up at global and national levels. These include United Nations Global Compact, Principles for Responsible Investment, Global Corporate Citizen Initiative, ISO 26000: 2010 – Guidance on Social Responsibility, SA 8000 Standard, Global Business Coalition on Health, Roundtable on Sustainable Development, Global Reporting Initiative, Corporate Social Responsibility Voluntary Guidelines 2009, and National Voluntary Guidelines on Social, Environmental and Economic Responsibilities of Business. However, it has been argued that the corporate sector is still not doing enough in this direction and due to which gaps are being observed in the fulfillment of the promises being made by the companies in their corporate social responsibility policies.