good governance

• Corporate social responsibility, or CSR, refers to the belief that businesses have an obligation to society beyond their commitments to their stockholders or investors.
• Social responsibility is an ethical framework in which individuals or corporations are accountable for fulfilling their civic duty and taking actions that will benefit society as a whole.
• Ethics refer to a set of moral principles that govern a company's or person's behavior.
• Advantages of social responsibility:

  • Gives a company a competitive edge
  • Attracts strong candidates and increases retention
  • Makes your business attractive to investors
  • Improves business culture
  • Increases customer loyalty and advocacy
  • Improves company reputation
  • Improves profitability and value
• Gives a company a competitive edge: Most customers today agree that social responsibility is a top criterion when choosing a company to shop from or do business with.
• Attracts strong candidates and increases retention: The success of your company is strongly impacted by the people who work for you.
• Makes your business attractive to investors: Investors generally believe that a commitment to social change is a great way to position a company for long-term success.
• Improves business culture: Your employees are likely to be more motivated and have a greater commitment to the organization if they see the social initiatives are in place.
• Increases customer loyalty and advocacy: Consumers are drawn to companies that have a reputation for being a good corporate citizen.
• Improves company reputation: If your organization is continually participating in social initiatives, it gives an impression to customers, investors, and the world as a whole that your organization is financially viable.
• Improves profitability and value: In many cases, companies find that when they introduce more energy-efficient methods and begin recycling they actually cut operational costs and benefit the environment.
• Disadvantages of social responsibility: - Costs money to implement

  - Impacts profitability

  - Greenwashing
• Costs money to implement: While large organizations can afford to allocate a budget to corporate social responsibility reporting, this can be financially taxing on smaller organizations.
• Impacts profitability: A company has a fiduciary duty to its shareholders and costly social responsibility initiatives can impact this directly.
• Greenwashing: In some cases, social responsibility initiatives have been used as a ploy to improve a company's image even though no real change has been made.
• Examples of social responsibility in corporations:

  • Charitable giving and volunteer efforts
  • Changes to company policies in an effort to improve or benefit the environment
  • Improving labor policies and embracing fair trade
• Charitable giving and volunteer efforts: Companies are giving employees time off for volunteering every year and also donating portions of revenue to a charitable organization.
• Changes to company policies in an effort to improve or benefit the environment: Companies are holding tree-planting events, minimizing paper waste, switching to energy-saving bulbs, setting up recycling bins and allowing remote work to reduce the negative impact of commuter traffic.
• Improving labor policies and embracing fair trade: Brands are striving to improve working conditions and the well-being of employees.
• corporate social responsibility initiatives are categorized as follows: - Environmental responsibility - Human rights responsibility - Philanthropic responsibility - Economic responsibility
• Environmental responsibility: initiatives aim at reducing pollution and greenhouse gas emissions, and the sustainable use of natural resources.
• Human rights responsibility: initiatives involve providing fair labor practices (e.g., equal pay for equal work) and fair trade practices, and disavowing child labor.
• Philanthropic responsibility: can include things such as funding educational programs, supporting health initiatives, donating to causes, and supporting community beautification projects.
• Economic responsibility: initiatives involve improving the firm’s business operation while participating in sustainable practices – for example, using a new manufacturing process to minimize wastage.
• Business Benefits of CSR:

  • Stronger brand image, recognition, and reputation
  • Increased customer loyalty and sales
  • Operational cost savings
  • Retaining key and talented employees
  • Easier access to funding
  • Reduced regulatory burden
• Stronger brand image, recognition, and reputation: CSR adds value to firms by establishing and maintaining a good corporate reputation and/or brand equity.
• Increased customer loyalty and sales: Customers of a firm that practices CSR feel that they are helping the firm support good causes.
• Operational cost savings: Investing in operational efficiencies results in operational cost savings as well as reduced environmental impact.
• Retaining key and talented employees: Employees often stay longer and are more committed to their firm knowing that they are working for a business that practices CSR.
• Easier access to funding: Many investors are more willing to support a business that practices CSR.
• Reduced regulatory burden: Strong relationships with regulatory bodies can help to reduce a firm’s regulatory burden.