Are CSR and Corporate Governance Converging?: A View from Boardroom Directors and Company Secretaries in FTSE100 Companies in the UK

Abstract

This paper reports on research that explores the perceived relationship between corporate governance and corporate social responsibility (CSR) from the perspective of main board directors and company secretaries in 13 FTSE100 companies in the UK. A comparative literature analysis of shareholder and stakeholder theory shows that the scope of corporate governance has broadened overtime, a phenomenon influenced by the growing importance of CSR. While there is now a coherent stream of theoretical approaches within corporate governance that are concerned with the broader environment, there is little empirical evidence to shed light on these. Using qualitative field research, the paper aims to redress this balance. The research sample is narrowed to those connected to FTSE 100 companies in the UK. Data analysis revealed a significant alignment between the corporate governance and CSR programmes within the sample companies. Key influencers for this convergence were seen to be regulatory pressure, the rise of business ethics (due to corporate scandals) and demands from SRI investors. As such, there is evidence that businesses are starting to look beyond financial accountability as the sole route to creating shareholder value. This development is causing a shift of the corporate-governance concept to a stakeholder-based approach, with a balance of focus between the short-term financial accountability of directors with a long-term sustainable strategy. This increased alignment between corporate governance and CSR is reflected in the development of more formal governance structures, such as the growing number of CSR board committees, SEE risk registers and CSR reports.