Corporate Social Responsibility and Corporate Governance: Analysis across Industries in Mexico

Corporate Social Responsibility and Corporate Governance: Analysis across Industries in Mexico

Andrée Marie López-Fernández (Universidad Panamericana, Mexico)
Copyright: © 2017 |Pages: 20
DOI: 10.4018/978-1-5225-0902-8.ch012
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Abstract

Corporate Social Responsibility (CSR) and corporate governance are two distinct concepts that may seem to be isolated in practice. However, there are many parallels to the extent that the latter may define the engagement of the former. As such, it may be argued that corporate governance is essential to the implementation of CSR. Thus, a question arises, are firms' governance policies conducive to the engagement in corporate social responsibility? This study aims to evaluate the dynamics between corporate social responsibility and corporate governance of multinational firms operating in Mexico. Findings indicate that the practice of disclosing corporate social responsibility is more common than the transparent communication of corporate governance; however, the compliance with corporate governance is consistent with that of corporate social responsibility within the analysed firms.
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Literature Review

The existence of an organization significantly depends on stakeholders’ acknowledgement of its legitimacy (Deegan, 2002), and accountability. Corporate social responsibility (CSR) is an important strategy carried out by organizations with the aim to address certain social and environmental issues. It is a concept that has many definitions; it is charged with different meanings for diverse organizations (Crowther & Rayman-Bacchus, 2004), determined by their context of operations and characteristics of business dynamics. CSR has been considered as organizations’ concern for the impact of their efforts on their activities as well as on society (Bowman & Haire, 1976). CSR consists of organizations’ clear communication of their policies and practices that reflect their responsibility towards the achievement of social wellbeing (Matten and Moon, 2008). And, according to Kotler and Lee (2005), corporate social responsibility is a “commitment to improve community well-being through discretionary business practices and contributions of corporate resources.” Therefore, it is a firm’s active use of its resources (financial and non-financial) to proactively engage in socially responsible practices with the purpose of positively contributing to society’s wellbeing.

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