Page 15 - Quarterly Q1-Q2 2018

Productivity can also be redefined in the value chains of companies for, at least in the long run, social problems will create economic costs in
the value chains. A third mechanism of creating shared value is enabling local cluster development. These clusters can comprise educational and research facilities as well as the development of infrastructure.
“Does being more responsible help
or hinder the achievement of the company’s objectives?”
Is Complying with Norms Enough?
Does Corporate Social Responsibility legally require anything other than complying with norms? Does being more responsible help or hinder the achievement of the company’s objectives?
Complying with norms is usually seen as a pivotal part of Corporate Social Responsibility. However, it is generally not an adequate measurement of real responsibility.
National and international norms and regulations of Corporate Social Responsibility include issues of equality, work, the environment, competitiveness, consumers, crime and taxes as well as fundamental and human rights. International organisations have developed several guidelines and standards for the self-regulation of Corporate Social Responsibility.
The management of a company or, in practice,
the CEO and the board of directors, is responsible for the implementation of Corporate Social Responsibility. Company’s economic, social and environmental responsibility is concretized when the management makes decisions concerning investments, contract agreements pertaining to production chains or tax planning, as well as issues regarding personnel, customers and consumers.
Part of the Limited Liability Companies Act
Corporate Social Responsibility is clearly linked
to the general principles of the Limited Liability Companies Act. Particularly, the part which states that it is the job of the management to advance the company’s interests by operating carefully. This, in turn, is directly linked to the purpose of generating profit and the continuity of business.
The provision of the Limited Liability Companies Act stating that a company’s purpose is to generate profit does not indicate that the company should make as much shareable profits as possible in the shortest possible time. Instead, generating profits is examined in the longer term.
This, combined with increasing the value of shares, requires complying with socially-acceptable approaches, even in situations in which the law does not compel the company to do so. Moreover, the public image of the company can affect the value of the business and its shares.