CG is concerned with holding the balance between economic and social goals and between individual and communal goals. The governance framework is there to encourage the efficient use of resources and equally require accountability for the stewardship of those resources. The aim is to align as nearly as possible the interests of individual corporations and society.
* Shifting focus only on economic concerns to include social concerns. * Reliance on CG mechanisms – board of directors & shareholder engagement, given the limitations in the exercise of shareholder rights – voting, derivative action, and exit, * Areas of social concern, not sufficiently covered by CG mechanisms, are increasingly subject to international standards, many of which are being implemented through national legislation – e.g. environment, labour conditions, human rights, anti-corruption etc.
The Significance and Impact of CSR
* The narrow focus of corporate governance exclusively upon the internal control of the firm and simply complying with regulation is no longer tenable * Corporate objectives described as ‘wealth generating’ too frequently have resulted in the loss of well being to communities and the ecology * Trend towards monitoring not just the financial health of the company, but the social and environmental impact of the company * CSR is becoming established in many corporations as a critical element of strategic direction, one of the main drivers of business development, as well as an essential component of risk management.
Corporate Citizenship in the World Economy’ – e.g. UN Global Compact – By mainstreaming the ten principles in business activities around the world & catalyze actions in support of broader UN goals, business, as the primary agent driving globalization, can help ensure that markets, commerce, technology and finance advance in ways that benefit economies and societies everywhere and contribute to a more sustainable and...
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