Integrating corporate social responsibility and corporate governance at the company level. Towards a conceptual model

Abstract

Over the last decade, the strategic implications of corporate social responsibility (CSR) have become one of the most important themes of research in the literature of business in society. While the understanding of a company has been placed for years within the presumed conflict between shareholder and stakeholder, today the shift towards an integrated approach is expected by various constituencies and driven by regulation. Thus, corporate governance (CG) focusing solely on financial performance cannot be an asset for companies if detached from the assumptions of socially and environmentally responsible business. CSR isolated from strategy and governance does not provide the fundamental change towards integrated thinking and a transition to a low-emission, resource-efficient economy. This article is based on a systematic literature review addressing links between corporate governance and CSR at the company level. We indicate a radical reorientation in both concepts and reveal the corresponding evolution of the theoretical view developing from agency theory towards enlightened shareholder value and a stakeholder-agency view. Specifically, adopting two dimensions of strategic fit between CSR activity and the core business and formal environmental, social, and governance (ESG) compliance, we propose a four-mode integration construct of a corporate social responsibility and corporate governance (CSR-CG) relationship. We identify actions undertaken by a company in the selected modes with respect to strategic focus, supervision, accountability, performance measures, and reporting.