Drivers of Corporate Social Responsibility

Transparency is fundamental to business. Investors need to be confident that reported profits are real, that executives will not use their positions to enrich themselves, and that accountability systems are in place to expose and punish abuses. Workers have to believe in a company s commitment to build value if they are to 

1 Pressures from Shareowners. Investors expect a competitive return from 

In Europe, calls for increased disclosure got a boost in 2001 when the Association of British Insurers (ABI), a 400-member trade association of Britain s insurance industry, issued new guidelines. The ABI members account for more than 20 percent of stockmarket investment in London. These guidelines ask companies to disclose information about the social, environmental, and ethical risks and opportunities they face and how they plan to handle them. ABI officials say the guidelines represent an important opportunity for investors and companies to work together both to protect shareholder value and improve their understanding of corporate social responsibility (see www.abi.org.uk). 

2 Pressures from Employees. Employees want to be paid well, with competitive wages and salaries, benefits, and increasingly, stock. They want the resources to do their jobs well. And, equally important, they want an employer who treats them fairly and with respect and values their knowledge and different life experiences. Employee perceptions about how a company accepts and manages its social responsibilities are also increasingly part of employee decisions about where to work. Furthermore, unions and related institutions put pressure on companies to reform their labor practices to meet global labor standards. 

Within the chemical industry are hundreds of local citizen advisory panels. Company representatives meet several times a year with interested residents, who represent schools, hospitals and health care specialists, businesses, environmental associations, community groups, and municipal authorities, to discuss immediate concerns such as emissions and traffic problems. 

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C. A. Hemingway and P. W. Maclagan, Managers Personal Values as Drivers of Corporate Social Responsibility, Journal of Business Ethics, 50(1), 33-44 (2004). 

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