Corporate Social Responsibility and Law Assignment

Corporate Social Responsibility and Law - Assignment Example Relevance of Legal Context of CSR in the Business World The importance of the issue of legal aspects on CSR cannot be lost on business especially with debate raging on firms’ fiduciary duty to maximise profits for shareholders versus sacrificing part of the profits to benefit individuals. Although firms have found a business case to CSR initiatives, the legal aspect of CSR is a reality that they have to consider. It is important to state that businesses operate within states that are governed by the law. This is true since even internationally there are laws such as International Labour Regulations (Clavet et al. 2008, pp. 41-42). Impacts of the law on a firm’s CSR initiatives have been felt, for instance, in Denmark where there is a law requiring corporations to report on their CSR initiatives (DCCA 2010). The very concept of CSR involves undertaking more than the law requires; hence a legal element in corporate ventures is what CSR is built upon. Bantekas (2004, pp. 3 27-334) states that the core principles of CSR are human rights, labour rights and environmental rights which are subject to human rights, labour and environmental national and international laws; hence their pursuit is directly influenced by the law. Law Subjects related to CSR One of the most important considerations is the issue of CSR being ‘outside the law’ or ‘meeting the law’. In the ‘outside the law’ argument, an issue that transnational corporations can attest to is the lack of a standard framework of CSR to operate on as national laws and management may fail to provide the required standards. Besides, CSR is an enterprise-driven venture by firms beyond what they are legally required to undertake. In terms of the ‘meeting’ aspect, it is a consensus that CSR cannot be defined without taking the law into account. The concept of CSR involves voluntary initiatives and activities that are considered to exceed legal compliance. Thus, CSR is deeply rooted in the premise that hard law has to be met first with CSR initiatives then following on from this (Clavet et al. 2008, pp. 41-46). This aspect is a manifestation of the relationship between legal standards compliance and CSR. International law and the closely related international labour laws are other sets of legal aspects in action in a firm’s CSR initiatives. International legal instruments affecting transnational corporations are expressed through binding treaties with national entities concerned with rights and obligations and through ‘soft laws’ such as by the many International Labour Organisation conventions. Although ‘soft laws’ are heavily criticised for being indicative of transnational corporations’ ability to influence government policy, they are still a testimony of the inseparability of CSR initiatives by such firms and the law. Conceptual Frameworks Theoretical frameworks have been established to expl ain the interaction between CSR and law and its impacts. The mainstream conceptual framework is positivism, which is adapted from natural science and explains observable phenomena through general laws and the special conditions of the situation. Positivist CSR research seeks to provide a distinctive view of a firm’