Corporate Social Responsibility and Corporate Governance: Comparative Perspectives

• Published date: 01 September 2013
• DOI: http://doi.org/10.1111/corg.12041
• Author: Joachim Schwalbach,Cynthia A. Williams,Timothy M. Devinney
• Date: 01 September 2013

Editorial

Corporate Social Responsibility and Corporate

Governance: Comparative Perspectives

Timothy M. Devinney, Joachim Schwalbach, and

Cynthia A. Williams

At its most basic, corporate social responsibility (CSR) is

represented in the f‌irm’s choices of how it will operate

within the social, political, legal, and ethical standards of the

environments in which it f‌inds itself, as well as choices about

where it will and will not operate. As such, a f‌irm’s CSR

strategy is unlikely to be independent, or even separable,

from its basic value propositions to its customers, workers,

suppliers, shareholders, or other key stakeholders: groups

which are themselves embedded wholly or partially within

their own societies (Freeman, 1984). This implies that one

cannot understand the CSR strategy and politics of organi-

zations without understanding the nature of the institutional

environments in which they choose – or are forced – to

operate. Equally, CSR strategies and policies represent criti-

cal aspects of the choices that the f‌irm – or more correctly its

shareholders and managers – makes about how it wants to

be governed. This includes who the f‌irm and its managers

and owners believe has legitimate claims on the residual

rents as well as which stakeholders deserve to have a legally

recognized voice in corporate decisions. Thus, at both a

macro and micro level, the interaction of corporate gover-

nance (CG) and corporate responsibility is a topic the editors

felt worthy of further exploration.

Although the topic of CSR can be traced backto the earliest

work on the origin of the f‌irm (Montes, 2003) and its modern

operationalization being initially laid out in work such as

Berle (1931) and Dodd (1932), academic interest in the topic

has been decidedly Western in its orientation and narrow in

the conceptualization of what “social responsibility” means

when taken in a more international and global context that

goes beyond post-Westphalian nation states (Devinney,

2011). In addition, overtime, work on the topic has bifurcated

away from the link between CSR and the governance struc-

ture of the corporation, with some scholars – in areas such as

law, f‌inance, accounting, and economics – continuing to con-

centrate on the formal legal governance and regulatory

requirements and how they relate to CSR, while scholars in

management, sociology, business ethics, and development

are more concerned with the link between CSR and manage-

rial incentives and behaviors.In formulating this special issue

of Corporate Governance: An International Review, our goal was

to bridge this divide in two ways: f‌irst, to concentrate on work

that had more of an international comparative f‌lavor in the

sense thatwhat was being brought into the discussion wasthe

role of different institutional environmentsand cultures; and

second, to emphasize work that linked governance and CSR

endogenously; where neither CSR nor CG was viewed as a

static and independent phenomenon. In doing so, we were

not attempting to provide a def‌initive statement as to the

relationship between CG and CSR, but to set the stage for a

research program that incorporated the two as representing

parts of the larger question of who has a right to governance

claims in the corporation and what the implications of those

claims might be.

CORPORATE GOVERNANCE SYSTEMS

AND CSR

At a macro level, whether the corporate governance system

generally is oriented towards shareholders alone, or towards

a broader stakeholder group, will have implications for

f‌irms’ relationships with societal institutions and sense of

social obligations (De Graaf & Stoelhorst, 2013; Gill, 2008;

Ioannou & Serafeim, 2012). In a shareholder-focused corpo-

rate governance system, directors’ and managers’ f‌iduciary

obligations run to the company and its shareholders only,

as in the United States (Bainbridge, 2003; Hansmann &

Kraakman, 2001), Australia (Hill, 2005), and the United

Kingdom (Williams & Conley, 2005). In contrast, stakeholder

systems of corporate governance, such as in Continental

Europe, Japan (Aguilera& Jackson, 2003), or India (Cappelli,

Singh, Singh, & Useem, 2010), require a more comprehensive

perspective on whose well-being matters and,therefore, how

413

Corporate Governance: An International Review, 2013, 21(5): 413–419

© 2013 John Wiley & Sons Ltd

doi:10.1111/corg.12041