Mary Ann B.

Buga MM-TM1
Activity 4:
1. What is the relationship between CSR and CG in the management of resources?
2. How are they interdependent to each other?

CG was defined as “a set of relationships between a company’s management, its board,

its shareholders and other stakeholders, …” by The Organization for Economic
Cooperation and Development (OECD) in 2004. This includes the internal and external
factors that affects the interest of the company. The internal and external factors of the
company are the laws, rules, the processes that the company establish to be guided on
how they should operate. With CG, a company should manage the environmental
impact of the business, it should ensure that all actions of the company live in attaining
its responsibility to the society and to the environment. Through CSR, it extends the
responsibility of a management in controlling its resources, specially in its sustainable
development.
In managing a company’s resources, CSR and CG should works hand in hand in
achieving its goal in balancing the impact of its operations. CSR and CG are
interdependent to each other. In making corporate rules, the corporate responsibility for
the society and the environment should be the topmost priority. CG should facilitate the
effectiveness of the company in terms of economic, social, and environmental.
Effective CG has effective CSR. Effective CG helps a corporation channels its
resources wisely, which helps to protect scarce resources in meeting the needs of the
society, this helps capital cost as investors are confident of their investment. (Mousavi,
2013) Thus, Corporate Governance must be considered sincerely because having a
very good CSR activities with bad processes, laws and rules governing it, will only lead
to wasting company’s resources.