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The IUP Journal of Corporate Governance
The Interrelationship Between Corporate Governance and Corporate Social Responsibility in Indian Companies
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The paper attempts to discover the interrelationships between Corporate Governance and Corporate Social Responsibility (CG and CSR) through different aspects. The reason behind the attempt is to analyze how the companies have postulated CG and CSR in their philosophies. Is there any difference between the outlooks of companies toward CG and CSR? How did the companies in their philosophy statements address the issues and dimensions of CG and CSR? The paper tries to explore various propositions on the relationship between CG and CSR through content analysis. The data for content analysis is obtained from annual reports of Nifty 50 companies. The reports are scanned for CG and CSR philosophy statements of companies with respect to marking the presence of a word, a sentence, a statement, a phrase or an idiom complementing any of the dimensions of CG and CSR identified for coding. A huge overlap between CG and CSR is found that demonstrated a two-way relationship significantly impacting each other. The study urges to see both the aspects as complementary to each other in the best interests of the company, stakeholder, and nation as a whole. The study gives an overview of the philosophies of companies representing the economic barometer of the country in terms of governance and social responsibility that can be useful for assessing the strengths of CG and CSR interrelationship in Indian companies. It samples the philosophies of companies with respect to both the aspects of CG and CSR.

 
 
 

Although boosting value for shareholders is a universal goal for business organizations, the appearance of different innovative expectations from modern organizations has posed a challenge for examining the non-financial results along with financial outcomes. Corporations are motivated today to contribute more than just maximizing the shareholder’s value. The broader vision has included the societal and environmental aspects of evaluation on the corporations’ part. India’s social and economic structure is shifting, calling for examining the performance of organizations on different fronts—from profit making front to meeting societal goals. There are different groups related to an organization directly or indirectly impacting each other in different ways. They are called stakeholders. The stakeholder may include shareholders, suppliers, creditors, employees, government, managers, directors, auditors and customers.

Further, every business functions in society. Its actions impact the environment. So it becomes the responsibility of every business organization to take good care of the society and its environment and work for the betterment of the society by incorporating good governance practices and promoting education, healthcare and livelihood (Haldar and Mishra, 2015). Hence, corporate social responsibility focuses on an organization’s relationship with the society (Majeed et al., 2015) and motivates the organization to do well in favor of the society beyond what is being mandated by the law. Corporate Governance and Corporate Social Responsibility (CG and CSR hereafter) issues are being researched in the field of Social Sciences like Management, Law, etc. CG is considered to encourage ethics, fairness, transparency and accountability in all the operations undertaken by the business organizations. The business organizations are supposed to be profitable, but at the same time, their responsibility is exaggerated to practice good governance standards and assuring that their profit generating activities are not detrimental to the society. This falls under the domain of CSR that considers how business organizations and its stakeholders interface.

 
 
 

Corporate Governance Journal,Corporate Governance and Corporate Social Responsibility (CG and CSR), Governance and social responsibility.