Skip to main content Accessibility help
×
Hostname: page-component-cd9895bd7-q99xh Total loading time: 0 Render date: 2024-12-27T20:25:56.853Z Has data issue: false hasContentIssue false

5 - CSR, Directors and Top Management Officers: Responsibility and Accountability Pathways

from Part II - Infusing Corporate Social Responsibility in Corporate Governance

Published online by Cambridge University Press:  15 June 2023

Onyeka K. Osuji
Affiliation:
University of Essex
Franklin N. Ngwu
Affiliation:
Pan-Atlantic University Lagos Business School, Nigeria
Gary Lynch-Wood
Affiliation:
University of Manchester School of Law
Get access

Summary

This chapter investigates how the effectiveness of corporate social responsibility (CSR) can be enhanced through provisions for the responsibility and accountability of individuals, such as directors, who hold key positions or have significant influence on the corporate decision-making process. It draws on the organic theory of the corporation, tone-at-the-top organisational theory, and resource dependency, agency and stewardship theories to demonstrate an anthropocentric approach to corporate governance. This approach identifies critical corporate insiders for CSR-related responsibilisation and accountability.

Type
Chapter
Information
Corporate Social Responsibility Across the Globe
Innovative Resolution of Regulatory and Governance Challenges
, pp. 99 - 131
Publisher: Cambridge University Press
Print publication year: 2023

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Ahern, D. (2011). Directors’ duties: broadening the focus beyond content to examine the accountability spectrum. Dublin Law Journal, 33, 116–52.Google Scholar
Arden, DBE, M. (The Right Honourable Lady Justice) (2010). Regulating the conduct of directors. Journal of Corporate Law Studies, 10(1), 115.Google Scholar
Attenborough, D. (2020). Misreading the directors’ fiduciary duty of good faith. Journal of Corporate Law Studies, 20(1), 7398.CrossRefGoogle Scholar
Bainbridge, S. M. and Henderson, M. T. (2016). Limited Liability: A Legal and Economic Analysis. Cheltenham, UK: Edward Elgar.CrossRefGoogle Scholar
Bendickson, J., Muldoon, J., Liguori, E. W. and Davis, P. E. (2016). Agency theory: background and epistemology. Journal of Management History, 22(4), 437–49.Google Scholar
Berle, A. A. (1965). The impact of the corporation on classical economic theory. Quarterly Journal of Economics, 79, 2540.CrossRefGoogle Scholar
Berle, A. A. and Means, G. C. (1932). The Modern Corporation and Private Property. New Brunswick, NJ: Transaction.Google Scholar
Berliner, D. and Prakash, A. (2012). From norms to programs: the United Nations Global Compact and global governance. Regulation and Governance, 6, 149–66.Google Scholar
Bierce, A. (2003 [1911]). The Devil’s Dictionary. New York: Dover.Google Scholar
Bostrom, R. E. (2003). Corporate governance: developments and practices one year after Sarbanes-Oxley. International Financial Law Review, 22(10), 189204.Google Scholar
Bowman, S. R. (1996). The Modern Corporation and American Political Thought. Law, Power, and Ideology. University Park: Pennsylvania State University Press.Google Scholar
Canning, M., O’Dwyer, B. and Georgakopoulos, G. (2019). Processes of auditability in sustainability assurance: the case of materiality construction. Accounting and Business Research, 49(1), 127.CrossRefGoogle Scholar
Capuano, A. (2010). Catching the leprechaun: company liability and the case for a benefit test in organic attribution. Australian Journal of Corporate Law, 24(2), 177206.Google Scholar
Cartwright, P. (1996). Defendants in consumer protection statutes: a search for consistency. Modern Law Review, 59(2), 225–40.Google Scholar
Cartwright, P. (2001). Consumer Protection and Criminal Law. Cambridge: Cambridge University Press.Google Scholar
Cermak, R. (2018). Directors’ duties to respect human rights in offshore operations and supply chains: an emerging paradigm. Company and Securities Law Journal, 36(2), 124–49.Google Scholar
ChandlerJr, A. D. (1977). The Visible Hand: The Managerial Revolution in American Business. Cambridge, MA: Harvard University Press.Google Scholar
Cheffins, B. R. (1997). Company Law: Theory, Structure and Operation. Oxford: Clarendon Press.Google Scholar
Cheffins, B. R. and Armour, J. (2011). The past, present and future of shareholder activism by hedge funds. Journal of Corporation Law, 37(1), 51103.Google Scholar
Cherry, M. A. and Sneirson, J. F. (2011). Beyond profit: rethinking corporate social responsibility and greenwashing after the BP oil disaster. Tulane Law Review, 85(4), 9831038.Google Scholar
Choudhry, B. and Petrin, M. (2018). Corporate governance that ‘works for everyone’: promoting public policies through corporate governance mechanisms. Journal of Corporate Law Studies, 18(2), 381415.Google Scholar
Chrisman, J. J., Chua, J. H., Kellermanns, F. W. and Chang, E. P. C. (2007). Are family managers agents or stewards? An exploratory study in privately held family firms. Journal of Business Research, 60(10), 1030–8.Google Scholar
Clough, J. and Mulhern, C. (2002). The Prosecution of Corporations. Melbourne: Oxford University Press.Google Scholar
Clutterbuck, D. and Waine, P. (1993). The Independent Board Director. London: McGraw-Hill.Google Scholar
Cochrane, A. (2012). Animals Rights without Liberation: Applied Ethics and Human Obligations. New York: Columbia University Press.Google Scholar
Coffee, J. C. (2005). A theory of corporate scandals: why the United States and Europe differ. Oxford Review of Economic Policy, 21(2), 198211.Google Scholar
Committee on the Financial Aspects of Corporate Governance (Cadbury Committee). (1992). Report of the Committee on the Financial Aspects of Corporate Governance, London: Committee on the Financial Aspects of Corporate Governance and Gee and Co. Ltd.Google Scholar
Cooper, D. J., Dacin, T. and Palmer, D. (2013). Fraud in accounting, organizations and society: extending the boundaries of research. Accounting, Organizations and Society, 38, 440–57.Google Scholar
Crespí-Cladera, R. and Pascual-Fuster, B. (2014). Does the independence of independent directors matter? Journal of Corporate Finance, 28, 116–34.Google Scholar
Davis, J. H., Schoorman, F. D. and Donaldson, R. (1997). Toward a stewardship theory of management. Academy of Management Review, 22(1), 2047.Google Scholar
Demb, A. and Neubauer, F. F. (1992). The Corporate Board: Confronting the Paradoxes. New York: Oxford University Press.Google Scholar
DeMott, D. A. (2004). The texture of loyalty. Studies in International Financial, Economic, and Technology Law, 7, 2347.Google Scholar
de Villiers, C., Rinaldi, L. and Unerman, J. (2014). Integrated reporting: insights, gaps and agendas for future research. Accounting, Auditing & Accountability Journal, 27(7), 1042–67.Google Scholar
Donaldson, L. and Davis, J. H. (1991). Stewardship theory or agency theory: CEO governance and shareholder returns. Australian Journal of Management, 16(1), 4964.CrossRefGoogle Scholar
Dunlavy, C. A. (2004). From citizens to plutocrats: nineteenth-century shareholder voting rights and theories of the corporation. In Lipartito, K. and Sicilia, D. B., eds., Constructing Corporate America: History, Politics, and Culture. Oxford: Oxford University Press, pp. 6693.Google Scholar
Eisenhardt, K. M. (1989). Agency theory: an assessment and review. Academy of Management Review, 14(1), 5774.Google Scholar
Elshandidy, T. and Hassanein, A. (2014). Do IFRS and board of directors’ independence affect accounting conservatism? Applied Financial Economics, 24(16), 1091–102.Google Scholar
Erasmus, L. and Coetzee, P. (2018). The drivers of stakeholders’ view of internal audit effectiveness: management versus audit committee. Managerial Auditing Journal, 33(1), 90114.Google Scholar
European Commission (2003). Modernising Company Law and Enhancing Corporate Governance in the European Union – A Plan to Move Forward. COM (2003) 284 final. https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:52003DC0284&from=EN.Google Scholar
European Commission (25 February 2005). Commission Recommendation of 15 February 2005 on the Role of Non-executive or Supervisory Directors of Listed Companies and on the Committees of the (Supervisory) Board, 2005/162/EC. Official Journal of the European Union, L/52/51. https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv%3AOJ.L_.2005.052.01.0051.01.ENG&toc=OJ%3AL%3A2005%3A052%3AFULL.Google Scholar
Fama, E. F. (1980). Agency problems and the theory of the firm. Journal of Political Economy, 88, 288307.Google Scholar
Fama, E. F. and Jensen, M. C. (1983). Separation of ownership and control. Journal of Law and Economics, 26, 301–25.Google Scholar
Financial Reporting Council (FRC). (July 2018). The UK Corporate Governance Code. London: FRC. www.frc.org.uk/getattachment/88bd8c45-50ea-4841-95b0-d2f4f48069a2/2018-UK-Corporate-Governance-Code-FINAL.PDF.Google Scholar
Fischer, D. and Friedman, H. H. (2019). Tone-at-the-top lessons from Abrahamic justice. Journal of Business Ethics, 156, 209–25.CrossRefGoogle Scholar
Foster, N. (2008). Personal civil liability of company officers for workplace torts. Torts Law Journal, 16, 2068.Google Scholar
Gale, M., Gale, S. and Scanlan, G. (1999). Fraud and the Plc. London: Butterworths.Google Scholar
Gray, R. (2010). Is accounting for sustainability actually accounting for sustainability … and how would we know? An exploration of narratives of organisations and the planet. Accounting, Organizations and Society, 35(1), 4762.Google Scholar
Gutiérrez, M. and Sáez, M. (2013). Deconstructing independent directors. Journal of Corporate Law Studies, 13(1), 6394.CrossRefGoogle Scholar
Hernandez, M. (2008). Promoting stewardship behaviour in organizations: a leadership model. Journal of Business Ethics, 80, 121–8.CrossRefGoogle Scholar
Hetherington, J. A. C. (1966). Trends in enterprise liability: law and the unauthorized agent. Stanford Law Review, 19(1), 76128.Google Scholar
Higgs, D. (2003). Review of the Role and Effectiveness of Non-executive Directors. London: Department of Trade and Industry.Google Scholar
Hillman, A. J., Withers, M. C. and Collins, B. J. (2009). Resource dependence theory: a review. Journal of Management, 35(6), 1404–27.Google Scholar
Hood, P. (2013). Directors’ duties under the Companies Act 2006: clarity or confusion. Journal of Corporate Law Studies, 13(1), 148.Google Scholar
Howells, G. and Weatherill, S. (2005). Consumer Protection Law, 2nd ed. Aldershot, UK: Ashgate.Google Scholar
Idowu, S. (2009). Corporate social responsibility from the perspective of corporate secretaries. In Idowu, S. and Filho, W. L., eds., Professionals’ Perspectives of Corporate Social Responsibility, Berlin Heidelberg: Springer-Verlag, pp. 4970.CrossRefGoogle Scholar
Inkpen, A. C. and Tsang, E. W. K. (2007). Learning and strategic alliances. Academy of Management Annuals, 1, 479511.Google Scholar
Ireland, P. (2010). Limited liability, shareholder rights and the problem of corporate irresponsibility. Cambridge Journal of Economics, 34(5), 837–56.Google Scholar
Ireland, P. (2018). From Lonrho to BHS: the changing character of corporate governance in contemporary capitalism. King’s Law Journal, 29(1), 335.Google Scholar
Jensen, M. C. and Meckling, W. H. (1976). Theory of the firm: managerial behaviour, agency costs and ownership structure. Journal of Financial Economics, 3(4), 305–60.Google Scholar
Johnson, L. (2003). After Enron: remembering loyalty discourse in corporate law. Delaware Journal of Corporate Law, 28, 2773.Google Scholar
Keay, A. (2007). Company Directors’ Responsibilities to Creditors. Abingdon, UK: Routledge.CrossRefGoogle Scholar
Keay, A. (2014a). An assessment of private enforcement actions for directors’ breaches of duty. Civil Justice Quarterly, 33(1), 7692.Google Scholar
Keay, A. (2014b). The public enforcement of directors’ duties: a normative inquiry. Common Law World Review, 43(2), 89119.Google Scholar
Keay, A. (2015). The shifting of directors’ duties in the vicinity of insolvency. International Insolvency Review, 24(2), 140–64.Google Scholar
Keay, A. (2016). Assessing and rethinking the statutory scheme for derivative actions under the Companies Act 2006. Journal of Corporate Law Studies, 8(1), 3968.CrossRefGoogle Scholar
Keay, A. (2019). Having regard for stakeholders in practising enlightened shareholder value. Oxford University Commonwealth Law Journal, 19(1), 118–38.Google Scholar
Keay, A. and Loughrey, J. (2015). The framework for board accountability in corporate governance. Legal Studies, 35(2), 252–79.Google Scholar
Keay, A., Loughrey, J., McNulty, T., Okanigbuan, F. and Stewart, A. (2020). Business judgment and director accountability: a study of case-law over time. Journal of Corporate Law Studies, 20(2), 359–87.CrossRefGoogle Scholar
Kiliç, M. and Kuzey, C. (2018). Determinants of forward-looking disclosures in integrated reporting. Managerial Auditing Journal, 33(1), 115–44.Google Scholar
Klink, F. J. (2004). Director risk after Sarbanes-Oxley. In Campbell, D. and Woodley, S., eds., Trends and Developments in Corporate Governance. The Hague: Kluwer Law, pp. 197212.Google Scholar
Koutsias, M. (2017). The fallacy of property rights’ rhetoric in the company law context: from shareholder exclusivity to the erosion of shareholders’ rights. International Company and Commercial Law Review, 28(6), 217–33.Google Scholar
KPMG (2015). Currents of Change: The KPMG Survey of Corporate Responsibility Reporting 2015. Amsterdam: KPMG International.Google Scholar
KPMG (2017). KPMG Survey of Corporate Responsibility Reporting 2017. Amsterdam: KPMG International.Google Scholar
Lail, B., MacGregor, J., Stuebs, M. and Thomasson, T. (2015). The influence of regulatory approach on tone at the top. Journal of Business Ethics, 126, 2537.CrossRefGoogle Scholar
Latella, D. (2009). Shareholder derivative suits: a comparative analysis and the implications of the European Shareholders’ Rights Directive. European Company and Commercial Law Review, 6(2–3), 307–23.Google Scholar
Latella, D. (2010). The shareholder derivative suits: disfunction and remedies against a ‘paradoxal’ inactivity. Corporate Ownership & Control, 7(4–2), 297302.Google Scholar
Laufer, W. S. (2002). Corporate prosecution, cooperation and the trading of favours. Iowa Law Review, 87(2), 643–67.Google Scholar
Lee, J. (2018). The corporate governance officer as a transformed role of the company secretary: an international comparison. South Carolina Journal of International Law and Business, 14(2), 106–41.Google Scholar
Lindblom, L. (2007). Dissolving the moral dilemma of whistleblowing. Journal of Business Ethics, 76, 413–26.Google Scholar
Lombard, S. and Joubert, T. (2014). The legislative response to the shareholders v stakeholders debate: a comparative overview. Journal of Corporate Law Studies, 14(1), 211–40.CrossRefGoogle Scholar
Loughrey, J., Keay, A. and Cerioni, L. (2008). Legal practitioners, enlightened shareholder value and the shaping of corporate governance. Journal of Corporate Law Studies, 8(1), 79111.Google Scholar
Madison, K., Holt, D. T., Kellermanns, F. W. and Ranft, A. L. (2016). Viewing family firm behavior and governance through the lens of agency and stewardship theories. Family Business Review, 29(1), 6593.Google Scholar
Maurović, L. and Hasić, T. (2013). Reducing agency costs by selecting an appropriate system of corporate governance. Economic Research-Ekonomska Istraživanja, 26(1), 225–42.Google Scholar
McCormack, G., Keay, A. and Brown, S. (2017). Directors’ liability and disqualification. In McCormack, G., Keay, A. and Brown, S., eds., European Insolvency Law: Reform and Harmonization. Cheltenham, UK: Edward Elgar, pp. 2264.Google Scholar
McNulty, T. and Stewart, A. (2015). Developing the governance space: a study of the role and potential of the company secretary in and around the board of directors. Organisational Studies, 36(4), 513–35.Google Scholar
Menzies, D. (1959). Company directors. Australia Law Journal, 33, 156–79.Google Scholar
Mezzanotte, F. E. (2017). The unconvincing rise of the statutory derivative action in Hong Kong: evidence from its first 10 years of enforcement. Journal of Corporate Law Studies, 17(2), 469–96.Google Scholar
Miller, C. C., Washburn, N. T. and Glick, W. H. (2013). The myth of firm performance. Organization Science, 24(3), 948–64.CrossRefGoogle Scholar
Millon, D. (1990). Theories of the corporation. Duke Law Journal, 39(2), 201–62.Google Scholar
Milman, D. (2013). The Governance of Distressed Firms. Cheltenham, UK: Edward Elgar.Google Scholar
Moore, M. (2010). The evolving contours of the board’s risk management function in UK corporate governance. Journal of Corporate Law Studies, 10(2), 279308.Google Scholar
Near, J. P. and Miceli, M. P. (1985). Organizational dissidence: the case of whistle-blowing. Journal of Business Ethics, 4(1), 116.Google Scholar
Nelken, D. and Levi, M. (2018). Sir Philip Green and the unacceptable face of capitalism. King’s Law Journal, 29(1), 3657.Google Scholar
North, D. C. (1990). Institutions, Institutional Change and Economic Performance. Cambridge: Cambridge University Press.CrossRefGoogle Scholar
Organisation for Economic Co-operation and Development (OECD). (2015). G20/OECD Principles of Corporate Governance. Paris: OECD Publishing. www.oecd.org/daf/ca/Corporate-Governance-Principles-ENG.pdf.Google Scholar
Osuji, O. K. and Moore, I. (2017). Director disqualification as a corporate governance tool in developing and emerging markets. In Ngwu, F. N., Osuji, O. K. and Stephen, F., eds., Corporate Governance in Developing and Emerging Markets. Abingdon, UK: Routledge, pp. 270–90.Google Scholar
Parguel, B., Benoît-Moreau, F. and Larceneux, F. (2011). How sustainability ratings might deter ‘greenwashing’: a closer look at ethical corporate communication. Journal of Business Ethics, 102, 1528.Google Scholar
Parkinson, J. (2003). Disclosure and corporate social and environmental performance: competitiveness and enterprise in a broader social frame. Journal of Corporate Law Studies, 3(1), 339.Google Scholar
Parkinson, J. E. (1993). Corporate Power and Responsibility: Issues in the Theory of Company Law. Oxford: Clarendon Press.Google Scholar
Patelli, L. and Pedrini, M. (2015). Is tone at the top associated with financial reporting aggressiveness? Journal of Business Ethics, 126, 319.Google Scholar
Pfeffer, J. and Salancik, G. R. (1978). The External Control of Organizations: A Resource Dependence Perspective. New York: Harper & Row.Google Scholar
Rajak, H. (2004). Company law, limited liability, and the small world of directors’ negligence. Studies in International Financial, Economic, and Technology Law, 7, 117–41.Google Scholar
Ramsay, I. M. and Saunders, B. B. (2006). Litigation by shareholders and directors: an empirical study of the Australian derivative action. Journal of Corporate Law Studies, 6(2), 397446.Google Scholar
Reisberg, A. (2008). Derivative Actions and Corporate Governance: Theory and Operation. Oxford: Oxford University Press.Google Scholar
Rider, B. A. K. (1978). Amiable lunatics and the rule in Foss v. Harbottle. Cambridge Law Journal, 37(2), 270–87.CrossRefGoogle Scholar
Rinaldi, L. (2019). Accounting for sustainability governance: the enabling role of social and environmental accountability research. Social and Environmental Accountability Journal, 39(1), 122.Google Scholar
Rost, S. R. (2004). Control and liability questions for close private companies. In Campbell, D. and Woodley, S., eds., Trends and Developments in Corporate Governance. The Hague: Kluwer Law, pp. 319–40.Google Scholar
Safari, N. and Gelter, M. (2019). British Home Stores collapse: the case for an employee derivative claim. Journal of Corporate Law Studies, 19(1), 4368.Google Scholar
Sheridan, T. and Kendall, N. (1992). Corporate Governance: An Action for Profitability and Business Success. London: Pitman.Google Scholar
Siegel, S. (2006). Global accounting dimensions of corporate governance. In Norton, J. J. and Rickford, J., eds., Corporate Governance Post-Enron: Comparative and International Perspectives. London: BICL, pp. 4966.Google Scholar
Sinkovics, N., Hoque, S. F. and Sinkovics, R. R. (2016). Rana Plaza collapse aftermath: are CSR compliance and auditing pressures effective? Accounting, Auditing & Accountability Journal, 29(4), 617–49.Google Scholar
Sjåfjell, B. (2018). Beyond climate risk: integrating sustainability into the duties of the corporate board. Deakin Law Review, 23, 4162.Google Scholar
Stern, Y. Z. (1987). Corporate liability for unauthorized contracts – unification of the rules of corporate representation. University of Pennsylvania Journal of International Business Law, 9(4), 649701.Google Scholar
Tanega, J. (2006). Sarbanes-Oxley financial crimes: on legal risk, potential liability and employee protection. In Bantekas, I. and Keramidas, G., eds., International and European Financial Criminal Law. London: LexisNexis Butterworths, pp. 154–79.Google Scholar
Tang, S. S. (2020). The anatomy of Singapore’s statutory derivative action: why do shareholders sue – or not? Journal of Corporate Law Studies, 20(2), 327–57.Google Scholar
Tombs, S. and Whyte, D. (2015). The Corporate Criminal: Why Corporations Must Be Abolished. London: Routledge.Google Scholar
Turner, S. J. (2020). Corporate law, directors’ duties and ESG interventions: analysing pathways towards positive corporate impacts relating to ESG issues. Journal of Business Law, 2020(4), 245–64.Google Scholar
United Kingdom House of Commons Work and Pensions and Business, Innovation and Skills Committees. (2017). BHS. First Report of the Work and Pensions Committee and Fourth Report of the Business, Innovation and Skills Committee of Session 2016–17 (HC 54). https://publications.parliament.uk/pa/cm201617/cmselect/cmworpen/54/54.pdf.Google Scholar
United States Sentencing Commission. (2000). Federal Sentencing Guidelines Manual and Appendices. www.ussc.gov/guidelines/archive/2000-federal-sentencing-guidelines-manual.Google Scholar
Watson, S. M. (2019). The corporate legal person. Journal of Corporate Law Studies, 19(1), 137–66.Google Scholar
Wedderburn, K. W. (1957). Shareholders’ rights and the rule in Foss v. Harbottle. Cambridge Law Journal, 15(2), 194215.Google Scholar
Zalecki, P. H. (1993). The corporate governance roles of the inside and outside directors. University of Toledo Law Review, 24, 831–58.Google Scholar
Zhao, J. (2019). Extraterritorial attempts at addressing challenges to corporate sustainability. In Sjåfjell, B. and Brunner, C. M., eds., Cambridge Handbook of Corporate Law, Corporate Governance and Sustainability. Cambridge: Cambridge University Press, pp. 2942.Google Scholar

Save book to Kindle

To save this book to your Kindle, first ensure [email protected] is added to your Approved Personal Document E-mail List under your Personal Document Settings on the Manage Your Content and Devices page of your Amazon account. Then enter the ‘name’ part of your Kindle email address below. Find out more about saving to your Kindle.

Note you can select to save to either the @free.kindle.com or @kindle.com variations. ‘@free.kindle.com’ emails are free but can only be saved to your device when it is connected to wi-fi. ‘@kindle.com’ emails can be delivered even when you are not connected to wi-fi, but note that service fees apply.

Find out more about the Kindle Personal Document Service.

Available formats
×

Save book to Dropbox

To save content items to your account, please confirm that you agree to abide by our usage policies. If this is the first time you use this feature, you will be asked to authorise Cambridge Core to connect with your account. Find out more about saving content to Dropbox.

Available formats
×

Save book to Google Drive

To save content items to your account, please confirm that you agree to abide by our usage policies. If this is the first time you use this feature, you will be asked to authorise Cambridge Core to connect with your account. Find out more about saving content to Google Drive.

Available formats
×