Board Accountability and the Regulation of Corporate Social Responsibility
“Corporate social responsibility” (CSR), as a major contemporary focus for companies, governments, NGOs and communities, has been discussed from a multi-disciplinary perspective. The term is introduced and defined to achieve a combination of economic, social, environmental and philanthropic goals. Despite its positive social and environmental impact, the notion has been widely criticised for being ill-defined and fundamentally flawed. The value and effectiveness of CSR have been interrogated for many reasons, always inter-related, such as the suspicion of window-dressing, contradictions with shareholder value, the nature of voluntarism with directors’ discretion, ambiguity in the concept, and the lack of regulation and its legislative necessity. The article aims to consider and address some of these problems, and assess how CSR could be sharpened and made more effective through the lens of accountability, focussing on the rational and means for regulation of CSR. The article aims to achieve two interrelated goals: firstly it examines the function of accountability for the argument for CSR by investigating the extent to which the notion of accountability could be used as the criterion, or as the ultimate goal of CSR so that companies can be held accountable for corporate decisions affecting their stakeholders; secondly, this article will examine the common scope, objectives and enforcement measures for CSR and board accountability, and opens up the possibility of a more comprehensive understanding of the two notions in an interactive manner.
In order to link CSR and accountability closely to generate more coherent arguments, the nature and scope of the concept of “corporate social accountability (CSA)” will be evaluated, with the aim of broadening its latitude beyond disclosure through a rigorous assessment of the process of fulfilling directors’ duties involving questioning from stakeholders groups through meetings and committees, and explaining from the board. This will be followed by discussions on the feasibility of pursuing appropriate punishments due to corporate social and environmental failure or rewards due to their well-balanced and integrated CSR related success. As the result, it is hoped that the notion of CSA will be developed for the purpose of making it possible for companies to contribute social development and environmental protection by encouraging them to engage with internal self-governance as components of a pattern of “inclusive development” rather than purely invigorated by economic growth.