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CORPORATE RESPONSIBILITY IN SOCIAL DEVELOPMENT
David Pfrimmer -Canadian Council of Churches
As the global market expands, corporations are faced with a wider range of questions of which values should guide their operations in diverse countries and cultures. In addition to their traditional business focus, corporations are challenged by an ethical business imperative to address the global concerns regarding human rights, fair and equitable wages, safe working conditions, child and forced labour, the environment, and sustainable community development.
As competition in the global market increases, corporations can become more narrowly focused on short term economic profitability and less able to take a longer term view sensitive to the social and political investments needed for social development. Yet, multinational and transnational corporations benefit from a positive economic environment resulting from effective social development. Similarly, corporations can be drawn into activities and services more appropriate to civil society. Multinational and transnational corporations can make a contribution to the process of social development if there exists an on-going process for clearly articulating the responsibilities of corporations in the process of social development.
The nature of the ownership of corporations has changed so that increasingly large corporations are owned by groups of investors through their associations, labour unions, and pension funds. Among shareholders and investor groups, there has been a growing corporate responsibility movement that has been working to assist corporations in fulfilling their social responsibilities. In dialogue with governments, civil society and corporations, three areas of work that need to be pursued;
1. Corporate Social Responsibility involves the structuring of the internal culture, systems and practices of corporations itself. In dialogue with civil society, corporations should be encouraged to:
2. Corporate Social Accountability involves securing a socially responsible environment for corporations in exercising their corporate social responsibility. This requires:
3. Corporate Governance involves insuring that laws and regulations respect the rights of shareholders and stakeholders to participate in the process of the corporation's decision making. This can include,
RECOMMENDED ACTION: That guidelines be developed in consultation with all segments of civil society and which encourage corporate social responsibility, maintain corporate social accountability and which provide for responsible corporate governanance.
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