Good Governance and Corporate Responsibility

 Good Governance and Corporate Responsibility 

Good governance is a way of measuring how public institutions carry out public activities. Manage public resources with the idea of social and environmental welfare. A government must guarantee the fulfilment of human rights in a way that is free from abuse and corruption and with respect for the rule of law. According to the UN definition of good governance, it has significant following characteristics:

·         Participatory allowing everyone in a particular society, organization, team, etc. to give their opinion and to help make decisions in different spheres of like and inclusive development goals.

·         Consensus-oriented, in a diverse citizenry, people’s needs vary. It should be demonstrated by an agenda that seeks to mediate between the many different requirements, perspectives and expectations. Decisions need to be made in a manner that reflects a deep understanding of the historical, cultural, social, national and environmental context of the geographic part.

·         Accountable, Transparent and Responsive toward all the stakeholder’s interests. It promises to reduce corruption, takes into account the views of minorities and the voices of the most vulnerable in society are heard in decision-making. It can also respond to current and future societal needs.

·         Efficient and Effective so that it could fulfil the broader mission and vision of sustainable development.

·         Honest and Inclusive insight for the development of all the people without any discrimination based on gender, race, caste and so on.

·         Rule of Law the people and affairs should be governed by the rule of law. In the process of law-making, all the stakeholder’s interests should entertain indescribably.

Corporate Responsibility

CR addresses different aspects of the organization which impact society, the environment and the economy. Having a practical CR programme contributes to all stakeholders. It adds value to the organisation itself and ensures it operates in a sustainable way.

Good corporate governance

The rules and processes govern the relationship between managers and shareholders of companies. The stakeholders in a company such as employees, retirees and the local community - ensure transparency, honesty and accountability. Without an appropriate governance body, a company could lack achieve their goal. 

Corporate Social Responsibility

CSR is a management concept. Companies integrate social and environmental care into their business operations. They take care of all the aspects by interactions with their stakeholders. The policy makes considers all the practices worldwide so that an appropriate CSR can be implemented. CSR is an action that enables companies not only to fulfil legal obligations but also to increasingly invest in human capital and the environment-related aspects.

Some examples of CSR in action include - reducing the carbon footprint. Participate in charitable work. Shop and trade products to enhance economic activities. Producing goods and services which can promote social and environmental welfare. It should not be for one class but for all humankind. Even keeping in mind that coming generations could also use the natural resources. Organizations should use natural resources very wisely for the betterment of the future.

Ethical Responsibility

The common examples of ethical responsibility are the inclusive well-being of employees. It ensures a higher minimum wage and safety at the workplace. In the workplace, there should not be gender-based discrimination in wages. Companies' policy must be based on the ethical use of materials and ensuring all the employees receive a competitive wage. Employees must get all the comprehensive benefits and they are treated with care. They could get insurance and medical facility in case of any unfortunate incidents.

Organizational commitment

It helps organizations perform better and achieve their goals. It makes their employees feel connected to the organization. In this way, they do even better work and increase productivity. Dedication toward work help in many factors. Organizational decision-making is the most important aspect of a firm. In the process, one or more organizational units make decisions on behalf of an organization. The decision unit can be as small as an individual, such as a manager, or as large as an entire member organization. The decision and executive plans of an organization matter a lot. It might affect multiples aspects of employees and the environment and so on.

The role of leaders

Leadership in the area of ​​social responsibility requires involvement and legitimacy. Businesses play an intensive important role in society. They influence and manage the well-being of citizens, workers, consumers and the environment. They also help to achieve sustainable development goals. Businesses generate employment which reduces the crime rate. They use human capital in the best possible way.

Leadership and Corporate Social Responsibility are some of the most studied topics that generate a lot of literature. Today, leaders face economic, social and environmental challenges. Some ways forwards and developments are appreciable. but still, unfortunately, confidence in business is now low. In this complex global environment of uncertainty, leaders must expect some rational changes. Even more intensive research and development are required to move their organizations toward a sustainable society.  The growing interest in a sustainable company requires a new kind of leadership that emphasizes the values ​​of CSR. A concrete action plan with a holistic development vision can lead to a better society. leadership is about engagement and creating a family-like commitment to appropriate behaviours. The key to leading CSR is an interest in the past and present interactions between the firm and society, including learning by engaging with critics.

Application of Approach

Embracing CSR increases customer retention and loyalty. It increases employee engagement in the development of the company. If all the aspects work in a holistic way then it improves brand imaging and attracts investment opportunities and top talent. It makes a difference for bottom-line financials. Corporate social responsibility has four major aspects - Environmental Responsibility, Ethical Responsibility, Philanthropic Responsibility and Economic Responsibility.  India`s Companies Act 2013 has introduced the provision for Corporate Social Responsibility. The ideology of CSR is about giving and taking. Companies use resources in the form of raw materials and human resources etc. from society. By executing the task of CSR activities, the companies are giving something back to the society and environment.

Common Ethical Dilemmas for Business Owners

Business ethics deals with requisite and standard business policies and practices. It is associated with a potentially controversial topic, including corporate governance, insider dealing, bribery, discrimination, corporate social responsibility and fiduciary responsibility. Appropriate ethical behaviour is essential for any sustainable business model.

An ethical dilemma can be to support other companies when money is hard because of a business’s dependence on several factors and resources. An ethical dilemma is that business owners cannot compromise on product quality by doing unethical practices which can cause harm for the health of the people as well as the environment issue. There are other ethical dilemmas also like leaving clients, responding to employee behaviour on behaviour networks, Retention of employees due to years of service and Accepting candidates from the competition.

Conclusion

The CSR models increase business and revenue and also promote change and progress throughout the globe. It often involves helping people with few or no resources. As everyone deserves a better and more prosperous life. CSR is a kind of philanthropy which enhances the values of life and shows a path for a better future.

There are some drawbacks also which should be discussed and look for a practical solution. For an instance, a drawback is that its costs fall disproportionally on small businesses. Leading corporations can afford to allocate a budget to CSR reporting, but this is not always open to smaller businesses with between 10 and 200 employees. There is much more such matter which needs attention and It should be discussed and researched to get a constructive result.

Reference

Harlia, J. H. (2022). The Effect of Good Corporate Governance Implementation on Corporate Social Responsibility and Company Values. Account and Financial Management Journal, 07(06). https://doi.org/10.47191/afmj/v7i6.02

 

Sahut, J. (2019, September 28). Corporate social responsibility and governance. SpringerLink. https://link.springer.com/article/10.1007/s10997-019-09472-2?error=cookies_not_supported&code=8971038b-457c-45f5-acc3-c4ddc59b5575

 

Edupedia Publications. (2014, September 12). Corporate Social Responsibility and Good Governance. Https://Www.Academia.Edu/. Retrieved June 26, 2022, from https://www.academia.edu/8300505/Corporate_Social_Responsibility_and_Good_Governance

 

Kumar, R. (2019b, October 9). Top five qualities of an effective CSR leader. India CSR Network. https://indiacsr.in/top-five-qualities-of-an-effective-csr-leader/

 

Business Ethics: Fair Business Policies Within Controversial Subjects. (2021, August 29). Investopedia. https://www.investopedia.com/terms/b/business-ethics.asp#:%7E:text=Business%20ethics%20is%20the%20study,social%20responsibility%2C%20and%20fiduciary%20responsibilities.