Proceedings of 33rd International Business Research Conference
4 - 5 January 2016, Flora Grand Hotel, Dubai, UAE, ISBN: 978-1-922069-94-8
The Role of Social Responsibility in Corporate
Governance
Loyiso Makapela
Traditionally, business ethics and corporate governance have been examined in
scholarship within the context of finance, accounting, economics and other such
areas of business management. Indeed the need for greater transparency and
accountability in the control and direction of corporate firms has presented itself as
necessary, time and time again in the corporate sphere the world over.
In South Africa, the introduction of the King Code on Corporate Governance
(hereinafter ‘the Code’) in 1994 was unprecedented. With a purpose to promote
the highest standards of corporate governance, the Code went further in that it
recommended that corporate enterprises comply with seven characteristics of
good corporate governance. In addition to transparency, accountability, discipline,
independence, fairness and responsibility, the Code also included as the last of its
seven characteristics, social responsibility.
It is the latter characteristic, which serves as the point of departure for this paper.
Adopting a legal and quantitative approach to the aforementioned areas within
which corporate governance is traditionally examined, this paper seeks to explore
the dichotomy pertaining to various non-financial aspects of the concept of
corporate governance. It places specific focus on Corporate Social Responsibility
(CSR) and makes reference to the recent developments in the sphere of business
and human rights with a view to enhance and highlight the importance of social
responsibility in the corporate governance.
This paper asserts that a fresh approach is needed and that a solution may be
found by way of synthesizing aspects of recently developed instruments with those
of codes and standards that have been in existence for years. Using South Africa
as a case study, it is hoped that the solutions proposed might also find application
in other emerging economies, which have also placed emphasis on the nonfinancial aspects of their corporate governance codes in recent years such as India
and Brazil.
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Adv. Loyiso Makapela, Department of Mercantile Law, University of the Free State, South Africa,
Email: makapelal@ufs.ac.za