4.

BRIEF ABOUT THE CORPORATE SOCIAL RESPONSIBILITY POLICY IN YOUR COUNTRY:

UNITED KINGDOM

Corporate social responsibility (CSR) is a construct of non-owner, non-contract and non-

government interests or 'stakeholders' to regulate corporations. It suggests that corporations
not only responsible to the law, its investors, consumers and employees, but to 'society'. 1 The
concept of corporate social responsibility is an ideology aiming towards aligning private
interest with welfare of society. The unique factor about corporate social responsibility
remains that it is an exception to the capitalistic nature of the concept of private enterprise. In
recent times, private corporations have become huge stakeholders in modern society. In the
case of tech giants like Alphabet and Google, they are more powerful than national
governments. Hence, it is fair that private enterprise shares the burden of welfare in society.
However, it will always be categorized as self-regulation.

In many countries even if CSR is mandatory, the private entity chooses the methods through
which the profits will be disseminated in society. In many cases, CSR can be profitable. This
creates a cycle for any private enterprise to profit while promoting welfare. Philanthropic
donations and other community contributions influence the perception of the firm in the eyes
of a variety of stakeholders including investors, customers, suppliers and actual or potential
employees.2 It is important to note that philanthropy and CSR are different concepts.

As explored above, UKs corporate governance is very efficient and CSR can be considered as
apart of it. Many entities have chosen to undertake CSR for various purposes. UK Corporate
Governance Code is the primary legislation addressing corporate governance, however, it
does not deal with CRS in theory. Whatever the reason, CSR continues to grow in two
dimensions; the responsibilities of directors and the measurement of non-financial
performance. There are two views for reforming director’s duties.3 Hence, though CSR is
considered as part of corporate governance, it is not mentioned major corporate governance
laws of the UK.

1
Johns, G. (2005). Deconstructing Corporate Social Responsibility. Agenda: A Journal of Policy Analysis and
Reform, 12(4), 369-384. Retrieved March 30, 2020, from www.jstor.org/stable/43199361.
2
Saiia, D. H., Carroll, A. B., & Buchholtz, A. K. (2003). Philanthropy as Strategy: When Corporate Charity
“Begins at Home.” Business & Society, 42(2), 169–201. https://doi.org/10.1177/0007650303042002002.
3
Id.
UK compromise on 'Enlightened Shareholder Value' 4 suggests the 'pluralist' view and the
'enlightened shareholder' view. The two compete to widen the responsibilities of directors to
force them to take account of the interests of stakeholders. The United Kingdom promotes
CSR by initiative like the Queen’s Award for Enterprise: Sustainable Development. The level
of corporate community contributions (CCCs) in the United Kingdom has risen significantly
over the last 20 years as companies have responded to growing stakeholder pressure to
consider their wider social responsibilities.5 CSR is a growing ideology. However, many UK
companies face the question of whether CSR must be limited to their own nation, or is it
international.

4
Department of Trade and Industry (2005), Company Law Reform White Paper, UK.
5
Brammer, S., & Pavelin, S. (2005). Corporate Community Contributions in the United Kingdom and the
United States. Journal of Business Ethics, 56(1), 15-26. Retrieved March 30, 2020, from
www.jstor.org/stable/25123409