What Directors Need to Know about Corporate Social Responsibility

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Courtesy of Mark Schacter Consulting

The discussion about corporate social responsibility (CSR) is really a special type of discussion about corporate governance, and is therefore highly relevant to the role of the corporate director. This paper aims to help corporate directors appreciate CSR’s relationship to the exercise of corporate power, and equip them to engage with executives on the strategic question of how to manage the full range of the corporation’s relationships with the world around it. It argues that over the next few years, four developments related to CSR are likely to have a major impact on the job of the corporate director:
  • growing pressure on corporations to give “stakeholders” (see Box 1) a role in corporate governance;
  • growing pressure on corporations to disclose more and better information about theirmanagement of social, environmental and economic issues;
  • an increasing level of regulatory compulsion related to elements of corporate activitythat are currently regarded as voluntary forms of social responsibility;
  • growing interest by the mainstream financial community in the link between shareholder value and non-financial corporate performance.

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