Strategic and Proactive Corporate Social Responsibility

Companies are devoting increasing resources to support the demands of stakeholder groups (KPMG, 2013). However, despite the growth in corporate social responsibility (CSR) activities, evidence seems to suggest that companies undertake CSR mainly as a public relation tool, fed by media campaigns and reputation management. Not just the public, but also academics have major concerns about corporate social initiatives, in that existing CSR practices and processes ‘have little to do with extending accountability and amount to nothing more than exercise in stakeholder management and corporate spin’ (Cooper & Owen, 2007, p. 650). From the company’s perspective, there seems to be awareness that stakeholder perceptions are critical to corporate performance, and sometimes even to the company’s survival. At the same time, CSR initiatives are under scrutiny in terms of which benefits they bring to the business. It follows that accurate measurement of the benefits of CSR is important from both the corporate and the stakeholders’ perspectives. Such importance is reflected also in the recent growth of agencies that rank companies on their corporate social performance (CSP). The proliferation of ratings such as Kinder, Lydenberg, Domini Research and Analytics (KLD), Thomson Reuters Asset4, Sustanalytics and so on, potentially can make companies’ social initiatives more transparent as they analyse their plans and investments for enhancing CSP in depth. The existence of these CSR measures is relevant for the managers and the stakeholders of a company because they can improve corporate transparency and possibly stakeholders’ relationships. The social accounting literature, while critically evaluating the limitations and shortcomings of CSR reporting, stakeholder dialogue reporting, and sustainability reporting, has also suggested how these reports may contribute to heightened accountability and influence corporate social behaviour (e.g., Gray, 2002). In this chapter, we start addressing this debate by considering the nature and purpose of stakeholder management and CSR that dwells in the literature itself.