Corporate Social Responsibility Reporting and Directors’ Duties: The Australian Experience

Abstract

Corporate Social Responsibility (CSR) has the potential to have a significant impact on the conduct of global business. Much has changed since Milton Friedman made the famous and oft-quoted statement that ‘there is one and only one social responsibility of business—to use its resources and engage in activities designed to increase its profits’ (Friedman 1962). The exponential growth of international trade and business activity, and greater awareness of the impact of corporate behaviour on all aspects of society, has led to an increased global focus on CSR. CSR is not always easy to define, but it is generally based on the notion that corporations should act ethically and aim to do good beyond the minimum requirements of the law (Zerk 2006). The concept of CSR has become a common catch-phrase in recent years. Many businesses now wish to be seen to act in a socially responsible manner and there are increased numbers of interested stakeholders seeking information about corporate activities and the opportunity to influence business practices. Two CSR issues of great significance to business are the public disclosure and reporting of issues that impact on CSR (CSR reporting) and the relationship between CSR and directors’ duties, due to the impact that it can have on the corporate decision making process. The issues of CSR reporting and CSR and directors’ duties have received prominent attention in Australia in recent times, largely due to public inquiries and reviews addressing the role of CSR in business and the possibility of legislating for CSR. This chapter will review the position in Australia in relation to CSR in this context, looking at the manner in which these issues have been dealt with, for the purpose of offering an example for those in other jurisdictions to consider. Since CSR issues impact and affect businesses internationally, these topics are of global relevance, particularly due to the global reach of transnational corporations.