Corporate social responsibility and corporate governance : implementation and challenges for companies listed on the Johannesburg securities exchange

Abstract

This study presents an investigation into the relationship between corporate governance (CG) and corporate social responsibility (CSR). The study also aimed at investigating the legal challenges of compliance with CG and CSR legislation posed to listed companies in South Africa in CSR implementation. To achieve these objectives of the study, questionnaires were administered to the top 100 companies listed on the JSE. Structured interviews were also conducted with selected personnel from these companies. The study reviewed literature and theories within South Africa and internationally that were significant to CG and CSR. The study examined the CG and CSR legislation, codes and regulations in South Africa and highlighted the challenges associated with compliance with such legislation. The study further investigated the implications of the challenges encountered by listed companies in implementing CSR and CG, and consequently the impact this has on the socio-economic development of communities within the company’s operational environment. The study therefore sought to investigate the measures that South African listed companies were exploring to mitigate the challenges relating to CSR implementation in view of the fact that they are mandated in terms of legislation to comply with all regulatory provisions relating to CG and CSR. From the findings of this study, a Synergy, Inclusiveness and Socio-economic Development (SIS) conceptual model was produced. This model aimed to assist and guide CSR managers, directors and other officials in addressing the challenges of legal compliance, as well as to act as a guide in implementing strategic CSR that will positively impact on the socio- economic development of communities as well as the companies triple bottom line. Findings from the study revealed that the synergy between CG and CSR, top management involvement in CSR, stakeholder’s inclusiveness, as well as integrated reporting of company non-financial performance, are factors that stimulate CSR implementation in South Africa. The findings also revealed that legal compliance, although challenging, plays a crucial role in supporting CSR activities and corporate behaviour amongst South African listed companies. Based on these findings, the study developed a conceptual graphical representation to assist and guide CSR managers, company directors and other officials on strategies that may be applied to overcome challenges associated with legal compliance with CG and CSR legislation.