Corporate Governance: A Panacea for Social Accountability

The corporate world is a demanding one where various interested parties constantly have conflicting interests in organizations and expect management to deliver these expectations. Owners of companies invest their money with economic motivation, while society believes that companies need to sacrifice some of their returns for the bettering of communities. Environmental concerns have also become a significant factor in business today and more people have increased awareness of the impact of business activities on the environment. On the contrary, the neoliberal economists maintain that there is only one social responsibility of business - to use business resources and engage in activities designed to increase its profits so long as the business stays within the rules of the normal operations. The study reveals that effective governance is essential to provide clear leadership and direction for a strategic approach to CSR although current CSR practices within many companies have no strategic focus resulting in missed opportunities for maximising the positive impact of such investments.