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Finance & Accounting
Pages 6 (1506 words)
Do corporate social responsibility (CSR) reports provide shareholders and stakeholders with useful information on corporate social and environmental performance or are they merely a public relations vehicle? CSR and CSR reporting Corporate Social Responsibility (CSR) refers to the programs and actions undertaken by a company that it is not obliged to follow as part of its daily activities or legal restrictions and such actions provide some sort of benefit to the environment or the society (McWilliams and Siegel, 2001)…
The effectiveness of CSR reports lies in the motives of companies to undertake CSR activities and the importance that society gives to such activities. In 1970, Milton Friedman stated that the only real job of the managers of a company is to maximise the wealth of the company and keep investors happy and deviations from this activity is purely based on personal motives (Ghillyer, 2011). An alternative theory was put forward by Archie Carroll who presented the Corporate Social Performance (CSP) Framework (Carroll, 1979; Aupperle, Carroll and Hatfield, 1985). In 1985, Arieh Ullmann took an accounting approach to understand the reason for companies to undertake CSR activities (Ullmann, 1985). Ullmann’s approach gives the clearest picture of whether CSR reports provide investors with useful information on CSP or whether they are merely a public relations vehicle (Garriga and Mele, 2004). ...
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