The heart of the matter: corporate social responsibility, governance and financial performance

Abstract

It is interesting to consider at what stage corporate social responsibility (CSR) activities ceased to be a “nice to have” and became a “must have” for global corporations. The word “global” is of course key to that question, as while global considerations are the same for everyone, regional, national and organisational considerations will differ depending on political, geographical and legal factors. What holds for a global firm based in the USA will differ to a global firm in Japan, China and so on. Nevertheless, sometime in the late twentieth century or early twenty-first century, a common acceptance of CSR developed, and wherever a firm was based it had to ensure its CSR bases were covered. Of course, some organisations wanted to go further than that, and made it their business to extend CSR activities as much as possible. And it was not just limited to CSR – adjacent areas such as corporate governance (CG) and corporate financial performance (CFP) became central to corporate strategy. Mission and vision statements, company brochures and acres of marketing materials became devoted to showcasing the credentials of firms against the backdrop of this new perspective; sustainability became a necessity rather than merely a convenient bandwagon to jump on. When this started, however, is difficult to pinpoint, although it should be noted that it is still very much starting and in its early phases.