Corporate Governance Policies Dedicated to Corporate Social Responsibility: Should CSR be Mandatory to Firms?

Abstract

Corporate Governance (CG) policies have a significant impact on how organisations operate and their commitments, mainly because of Corporate Social Responsibility (CSR). The relationship between appropriate CG and CSR allows companies to maintain a good balance for their operations. It may also support and reinforce the organisations' efforts to establish mechanisms and strategies of control and management, which improve the satisfaction of stakeholders and shareholders and increase the value of shareholders. However, it is not clear whether CSR and CG policies are voluntary or mandatory for organisations. As a result, this research focus on disclosing how CSR is not an option for companies. It insists that CSR is an obligation of organisations that aims at responding to emerging market pressure. The paper demonstrates the concepts of CSR, showing how the concepts overlap with each other to facilitate fairness and satisfaction of both shareholders and stakeholders. It further provides an in-depth, comprehensive analysis of how various legal systems and frameworks undertake social responsibilities based on CG policies.