CORPORATE CITIZENSHIP

Definition: Corporate Citizenship is the responsibility of the corporation to develop the value
of the business by working for the well being of all the parties with which it deals. It implies
the social responsibility of business and the degree to which it adheres to legal,
environmental, cultural, ethical and economic responsibilities.

Above all, it is a philanthropic segment of corporate social responsibility, that impact

positively on the community. It is an indispensable part of whatever decisions and actions are
taken by the corporation.

In other words, the term ‘corporate citizenship’ refers to the behaviour that is going to boost
the positive impact of the company. As well as it will lessen the negative impact on its
environment, be it social, or physical. In short, it is a commitment to ethical behaviour in:

 Business Strategy
 Culture
 Operations
Further, it involves moving from supply oriented to demand-oriented strategies taking into
account:

 The welfare of the stakeholders

 A participative approach to working with communities
 Balancing the economic cost and benefits with social well being.
 Dealing with processes and not structures

The objective is to develop a dynamic relationship between the community, business and
philanthropic activities in order to complement as well as supplement one another.

Its aim is to raise the standard of living and the quality of life of the community in which
the company seeks a license to operate but without compromising the profitability.

Besides, it involves a set of activities or responsibilities of a firm that assist in making a

remarkable contribution to society. It implies the standards that the firm implements to
conform to corporate social responsibility. Moreover, it describes the role of the firm in
performing its responsibilities toward society.

 WHY CORPORATE CITIZENSHIP?

In the eyes of law, a company is an artificial judicial person. As per these characteristics,
the corporations can owe their own assets; they can sue and be sued. Additionally, the
company can claim entitlements, privileges and protections of citizenship. Therefore, this
concept adds features of a citizen to the body corporate.

Further, it gives a valid basis for its existence in the corporate world. This is because the
organization gets the rights and duties; the right to undertake a legitimate business and
perform duties according to the government regulations and societal acceptance. Also, the
 main task of the company’s board of directors is to maximize shareholders’ wealth. This
possible through:

So, corporate citizenship refers to the one that conforms to the role and responsibility of
coexistence and mutualism for social development. Being a corporate citizen a body
corporate believes in:

 Providing meaningful contributions to the customers.

 Development of people and community.
 Creative value in terms of money for the shareholder, so that they can stand to gain.
 Reacting to changes in terms of innovation and design.
 Surviving and growing with integrity.

 STRATEGY FOR CORPORATE CITIZENSHIP

The elements of a strategy for corporate citizenship include
 Mission and vision statement
 Top management commitment
 Values
 Collaboration and coordination across the business
 Compliance standards

 WHAT IS A GOOD CORPORATE CITIZEN?

A good corporate citizen is an enterprise that is legally incorporated. It enjoys the protection
of the state and all the privileges which are entitled to it. But, at the same time, it discharges
the duties and responsibilities towards the stakeholders. The responsibilities can take various
forms like:
 Conservation of resources
 Maintaining ecological balance
 Increasing job opportunities
 Donating a part of their income to educate the society
 Promoting the overall welfare of society
 CONDITIONS TO BECOME A GOOD CORPORATE CITIZEN
A firm needs to satisfy certain basic conditions to become a corporate citizen:
 The economic performance of the enterprise should be consistently satisfactory and
sustainable,
 It must follow the law of land, and timely pay the taxes.
 Keep the operations eco-friendly by not polluting natural resources like land, air and
water.
 Voluntary social actions that improve the company’s overall reputation.
 Regulate its activities in the areas, as stated in its MOA (memorandum of association)
of the company
 It must not involve dealing with illegal products and make their sales within legal
boundaries

 ADVANTAGES OF CORPORATE CITIZENSHIP

 Savings of taxes
 Increase in wealth and efficiency of personnel
 Investments indicate the values and mission of the firm and stakeholders as well.
 Improvement in the morale of the employee
 Earn goodwill for the corporation, its products and services and its employees.
 Creation of competitive advantage for the corporation.