Social Responsibility and Corporate Governance

The enterprise’s stakeholders’ well-being (WB) results from properly oriented enterprise vision/policy (aimed at social and other responsibility). To reach a (socially) responsible enterprise policy making the enterprise socially responsible and attain stakeholders’ WB, enterprise shareholders and other stakeholders should consider SR/WB crucial; this arises (also) from their contemporary circumstances and spiritual intelligence. SR belongs to crucial non-technological innovation processes that should result in SR as a normal part of human values, culture, ethics and norms (VCEN). These VCEN are visible in, and supported by, requisitely holistic (RH) enterprise policy/governance for the organization to flourish in the current global market, including SR as a way out from the current socio-economic crisis. Namely, the concepts of (1) interdependence (and ethics of interdependence) and (2) holistic approach (actually: a requisitely holistic approach) are crucial attributes of SR.

The modern world is becoming increasingly complex. On one hand, the process of globalization reflects in the creation of global economic and cultural networks, where one element can seriously impact the whole structure (e.g. the Lehman Brothers bank bankruptcy starting the world financial crisis in 2008). On the other hand, a trend is growing, trying to separate the elements of the structure, even to build dams and walls between them (e.g. growing nationalism in Europe, protectionist policies concerning national and even regional production, cultures and customs). These two trends heading in the opposite directions resemble two wrestlers fighting for life and death, and bring today’s world far from the balance, i.e. sustainable development, which in fact means harmonious development, necessary for humankind’s survival. The power of destruction, embodied in nuclear, chemical and biological weapons, growing pollution, climate change, massive migration, unemployment and the gap between the rich and poor is greater than ever; only joint efforts of nations and governments, politicians and business people can stop and overcome the negative results of technological development, irresponsible exploitation of natural and human resources, and of narrow, confrontational national policies. In this situation responsible, ethical business has as an important role to play as never before, as the businesses’ both constructive and destructive power can, literally, destroy the world. Corporate social responsibility (CSR) and corporate governance (CG), linked together, can create one of the most efficient tools for sustainable development.

The statement that employee involvement greatly influences companies’ performance, innovativeness, ability to generate and adapt to change, and consequently to gain better results, is nowadays indisputable. In this context searching for efficient tools of creating employee involvement is critical; using CSR principles in the process of human resource management is an underestimated tool in practical building the engagement. The research shows that such initiatives are not commonplace, although corporate social responsibility concerning employees is found important. The first part of this chapter treats the considered area, and components of organizational involvement and factors responsible for its creation. The author presents some evidence, based on results of global research, providing the positive influence of employee involvement in the company functioning, and some problems connected with building this involvement. A competence gap in this area exists. The second part concentrates on the CSR concept as a modern model of enterprise management with underlining the meaning of shaping relationships with employees. The state of recent research on this topic is presented. So is evidence of the positive influence of CSR on human resource management, based on the results of global research. In the third part the author analyzes the stages of human resource management (from recruitment, to motivation, career development, interim appraisal, creating work conditions, to employment restructuring), attempting to identify these aspects of CSR practice, which are directed towards creating employee involvement. In the final part examples of good practice concerning employee volunteering as a form of stimulating the involvement and creating employee loyalty towards organization are shown.

Corporate governance and management on one hand and social responsibility (SR) on the other hand became increasingly connected in assuring corporate success. Corporate governance and management holders currently must implement corporate values into corporate codes (codes of ethics, codes of conduct or other statements of corporate values, responsibility and corporate governance). Hence, corporations have responsibility to stakeholders who have or represent important interests, and to others outside their business relationships, to contribute to the environment and the health, safety and well-being of the whole planet. Since corporate social responsibility (CSR) expands a corporation’s accountability to wider stakeholders by reporting on their CSR activities (CSRR), boards of directors are responsible for CSRR. Practical experiences show that a formal implementation (moral commitments) is usually not enough, due to the essential purpose of corporations (creating profit here and now, rather than with consideration of the longer terms and broader condition, too often). Consequently, in the presented chapter, we examine the legal framework of the EU on CSRR, with particular focus on the corporate governance statement, established by Directive 2006/46/EC. We analyse the aim, the content and the legal effects of this statement under the last amendments from 2014 (Directive 2014/95/EU) and evaluate its contribution to fortifying the role of CSR in the corporate governance of EU corporations. Authors argue the importance of institutional development in the context of corporate governance and the influence of institutional measures on corporate ethical behaviour and, consequently, on their success. Furthermore, as a case of the institutional and formal measures of CSR implementation, the chapter deals witackles the case of Slovenia and its effort in a context of managing the drinking water; the concern for responsible governing the commons belongs to the greatest challenges for corporate governance.

The Enterprise Competitiveness, during accelerating market changes caused by factors like new technologies and social and economic changes, forces companies to seek modern forms of communication and to maintain relationships with all their clients, including organizational Employees and future Employees. Corporate social responsibility is a must for the particular Employer, who is distinguished by professionalism, commitment and respect for Employees. The Employer’s professionalism is based on the ethical nature of conduct; hence his/her actions are based on mutual trust, responsibility and credibility. The instrument regulating such activities is the Code of Ethics. It covers values and principles that Employers and Employees follow on job. The environment and technology are changing and so are the Employees’ needs. Therefore, the Code of Ethics should be adapted to the development trends occurring in the business environment and to the basic ethical values of the company’s Employees. If you want to develop an ethical code in your organization, you should know these values, look at the problem on both sides: An Employee and an Employer. The main goal of the chapter is to develop an ethical code of cooperation between the Millennials and the Employer, prepared based on the results of authors’ own research. This chapter presents a review of literature in the area of the thesis, a description of the research method and results of research carried out among several dozen selected key enterprises, young Employees of companies and future Employees at various levels of education.

Chapter authors are renewing their model aimed at innovation of employees’ and citizens’ rewards and ownership in order to fight the dangerous precariat status of the non-owners. Model includes methods of ESOP and USOP, employees’ internal capital accounts, citizens’ internal social capital accounts, normal pay-role, innovation-related rewards, universal basic income, shorter working time, national strategy on promotion of social responsibility, and NGO’s initiative for more social responsibility, organized by Human Resources Office. Development of social responsibility depends on owners as the decisive persons; let their co-workers and co-citizens be organized and enjoy ownership stimulation along the lines of the principles of social responsibility. Humanity faces a critical crisis that might be solvable with social responsibility, which is well supported, e.g. by the model briefed here.

Integral andragogy deals with the functional and intentional form of activation and animation of adults in all areas of life throughout their life career and in an environment of a social change. Andragogic understanding and grasping of the CSR concept has the potential not only to increase the awareness of CSR, but also to improve the quality of the business and management environment in a non-violent and non-repressive way. Education does not have only a social and individual framework and dimension, but also an impact. The traditional andragogic approaches to intentional and functional education interconnect and go beyond the principle of the so-called everyday learning. With the ‘day-to-day’ approach, adults change their attitudes towards values more naturally, become increasingly aware of them and transfer them to their everyday work activities. Not only the theoretical, but also methodological and research process framework for linking the andragogic process with CSR is deliberately related to small and medium-sized enterprises (SMEs), as they are typical for the European countries; there is a greater assumption for habitual behaviour, they affect the community and the region in which they operate by their activities. The aim of the chapter is to introduce the andragogic process of the infiltration of CSR in common, business-oriented management of SMEs. The underlying idea is that any organisation is not an isolated unit, but it is a part of a wider system of relations within society and as a result, its prosperity depends on the health of the surrounding society and on how it is perceived by the surrounding society.

IT governance (ITG) is an integral part of general governance—irrespective of enterprises, public administration or private social networks with Corporate Governance (CG) in mind. Our thesis is that only a common platform along with fair Information management can cope with the CG-task. To improve this mentored platform each player has to solve the separated views of CG as well as of ITG. The first step will be to hit a common IT-Strategy. The main task of ITG is the integration of business strategy and IT-Strategy. The inclusion of common goals (of CG) by sharing IT creates a win-win situation. On the one hand for the organisations—enterprises, public organisations or the civil networks—to fulfil their social responsibility in accordance with their business activity, and on the other hand for the necessary private stakeholders or citizen to have a better understanding, a common relationship or a quicker information flow concerning the actual situations. New knowledge, new trends, new procedures and political changes will influence this common network and the underlying IT-Strategy. To understand the benefits of such a network, we present different synergies and strategies of cooperation. We show the kind of services that are necessary to augment the advantages—for enterprises, administrations and the civil population. We consider the necessary control mechanisms as well as a fair system of sharing information and the responsibility, since every company bases upon trustfulness.