The document discusses the convergence of corporate social responsibility (CSR) and corporate governance (CG), highlighting the lessons learned from the 2008-2009 economic meltdown involving significant corporations like Lehman Brothers and AIG. It emphasizes the importance of accountability, transparency, and the evolving expectations of stakeholders regarding corporate behavior, which drive reforms and promote responsible investment practices. Ultimately, it calls for a redefined relationship between business and society, rooted in ethical considerations and sustainable practices.

1. CSR and Corporate Governance
The Convergence
Bolaji Okusaga

2. 1. Cases and Causes

3. Global Corporations and the 2008 – 2009 Economic
Meltdown
FROM BIG
SUCCESS
TO BIG
CRASHES
• Leyman Brothers, AIG,
Bernard L. Madoff
Investment Securities
LCC, Washington
Mutual, General
Motors and Saab
Auto-mobile were
huge global
enterprises before the
crash due to quasi-
lassie-faire mind-set

4. The Nigerian Financial Crisis
With democracy Nigeria’s economy
opened up to the world via more for
foreign investments and the policy of
trade liberalization.
And as the gains gradually started to
trickle in, another plan for
strengthening of the Financial System
and the deepening of the Capital
Market was also vigorously pursued
A wave of recapitalization followed
with the consolidation of the banking
industry and reduction of number of
operators within the banking system
from seventy-nine (79) to twenty-five
(25)
Suddenly, the banks were returning
billions of naira in profits.
The return on investment from stocks
traded on the Nigerian stock
exchange was not only elephantine
but peculiarly humongous and
attractive such that the Banks
continued to throw in depositors
fund on the market without checking
the risks.

5. The Consequence - Global
THE CONSEQUENCE OF PROFIT FOR PROFITS SAKE
A situation where sub-prime
mortgages became a trend because it
had a money-minting potential
without a consideration of the moral
foundation and long-term social basis
of the profits procured led to the fall
of Wall Street
Erstwhile global giants like AIG and
General Motors, badly affected, while
others such as Leyman Brothers,
Bernard L. Madoff Investment
Securities, Washington Mutual,
General Motors, Saab Automobile,
Zavi, and Woolworth died

6. The Consequence - Local
THE CONSEQUENCE OF Greed and Lack of Regulation
Financial Crisis leading to
the sacking of Managing
Directors of 5 Bank and
application of a bail=out to
save the Banking Industry
Stock Market Crash and big
Margin trading liabilities
for Stock market players

7. 2. Reactions and Refocus

8. Emerging Trends in Corporate Practices
CORPORATE
REFORMS
Corporate governance reforms
has given rise to more social
and environment responsibility
EMERGENT
TREND
There is now a emergent trend
towards a focus on companies
off balance sheet
environmental and social
impacts
THE MOVE
TOWARDS
CONVERGENCE
Consequently, this trend has
fueled a debate regarding the
degree and nature of
convergence between
corporate governance and
corporate social responsibility.

9. Drivers of Convergence
Stakeholders
• Stakeholders are becoming more
aware and are demanding
accountability beyond profits
Employees
• The changing nature of Employer /
Employee relationship – from
Master-Servant to partnership that is
mutually reinforcing and beneficial
Reputation
• Corporate Reputation and Trust are
beginning to count more for business
success than efficiency and product /
service quality
Globalisation
• Globalisation is helping to
universalize standards across the
globe
Leadership
• Leadership are coming under more
scrutiny than at any time in history.

10. Drivers of Responsible Investment
Respect for Globally accepted
Values
• Fight against Corruption
• Respect for Human Rights
The need to professionally
manage listed companies in
order to protect shareholders
investments
• Issues of Corporate misdemeanors
endangering Trillions of Dollar
Investments
Shareholder activism:
• Development of Shareholder activism
as a reaction to Board and Executive
excesses
Influence corporate reporting
and disclosure requirements
• Need for disclosures
New rules on CSR reporting
• ISO 2600
• Global Reporting Initiative (GRI)

11. 3. Finding the Meeting Point

12. Defining the Concepts – CR and CG
RESPONSIBILITY
• The concept of corporate responsibility is essentially about ensuring a better conversation between
business and society.
• Aside from the symbiotic relationship and consequent benefits derivable from the conversation, the
dialogue between business and society is underpinned by the principle of accountability which
presupposes the need for periodic scrutiny by immediate and remote interests.
GOVERNANCE
• On the other hand, corporate governance seeks to create the context for advancing this
conversation and creating trust, progress and continuity there-from, through the setting of the
background against which conversation is expected to take place, while building the limits against
which judgments are made and decisions taken in a bid to sharpen the moral planks of the
conversation.

13. From Relationship to Accountability
RELATIONSHIP
While Corporate Responsibility
strives to forge relationships,
corporate governance helps to
define the basis of the
relationships and sets the rules.
ACCOUNTABILITY
Corporate governance therefore is
a platform for ensuring that rules
adopted in pursuit of the need for
an accountable enterprise are not
only applied but also made to
govern business and social
conversations

14. Corporate Governance – Views from the Top
COLGATE PALMOLIVE
Corporate governance is about
“the practices, principles and
values that guide a company and
its business every day, at all levels
of the organization”.
AIR BERLIN
Corporate governance is “code of
behaviour that define guidelines
for the transparent management
and control of companies. It
creates transparency, strengthens
confidence in the company
management and in particular
serves the protection of the
shareholders”.

15. Accountability as Point of Convergence
CORPORATE
RESONSIBILITY AS
ACCOUNTABLE
INVESTMENTS
• The search for a goodwill
platform for social and
environmental
investments creating a
sustainable enterprise
CORPORATE
GOVERNANCE AS
ACCOUNTABLE
ACTIONS
• Instances of corporate
irresponsibility leading to
colossal corporate and /
or national economic
value attrition
CREATING A BASIS
FOR A SOUND
BUSINESS
• Accountable decision
making in the selection of
corporate priorities
There are hard-worn linkages which sets a basis for the conversation between business and
society.

16. 4. Reputation as Radar

17. Reputation Metrics – Companies and Investments
Transparency Accountability
Good
Governance
Strong
Management
Strategic
Vision
Corporate
Performance
Social
Responsibility
Corporate
Values

18. Risks Factors
PERCEPTION
• Increasingly shareholders
seeking financial rewards are
recognizing CSR issues can act on
share price and want to know
what companies are doing about
their CSR risks.
• Mainstream financial analysts
are also becoming aware that
CSR issues are not marginal but
have materiality for a company,
necessitating more strategic
thinking about CSR.
MATERIALITY
• The materiality of some CSR
issues is becoming so significant
that individual managers and
departments are unable to
resolve them on their own and
seek board guidance.
• Governments are regulating in
some CSR areas such as
environment and labour issues,
making it ill-advised not to stay
abreast if not ahead of these
issues.
REGULATORY SCRUTINY
• New regulations requiring more
robust risk reporting compel
companies to be more mindful
of non-financial issues, thereby
driving CSR into corporate
governance and accounting
processes.
• Legal liabilities and class action
law suits create challenges with
financial implications resulting in
a jolt effect on the architecture
of what gets counted.
• A number of CR risks are sector-
dependent — in some sectors
certain CSR issues can
• affect business survival and as
such become central to the way
business is managed.

19. Corporate Governance Practices Deriving from CSR
Risk Management
Oversight
This is a major
convergence point - A
key board duty is the
consideration of long
term corporate risks
Diversity in Board
Composition
The need for diversity
and inclusion on
boards is another
convergence point

20. United Nations Initiatives
UN Global Compact UN Principles for Responsible
Investment
UNEP Equator Principles ILO Tripartite Declaration of
Principles concerning
Multinational Enterprises and
Social Policy (MNE Declaration)
UNHCHR Business and Human
Rights
UNODC Anti-corruption UNCTAD Corporate
Responsibility Reporting, World
Investment Report

21. Implications for Enterprises
Expanding sphere of influence
Application of Code of Conduct to value chain
CSR management: value chain management =
compliance management
Development of Codes of Conduct and CSR reporting
New social and product liability patterns
CSR Drivers

22. Implications for Enterprises:
CSR Management
Addressing socio-
environmental & legal
compliance issues
Policies - Code of Conduct
Systems - Compliance
Management
Reporting - Accounting and
Reporting

23. CSR Management Process
• Needs
Assessment
Plan
• Build
Intervention
Map and
Activate
Do • Impact
Assessment
Check
• Social
Reporting
Review
Stakeholder
Dialogue
Organisation’s
Response
Independent
Study
Stakeholder Dialogue

24. Thought On Convergence of Corporate
Governance and CSR
Values School
• Ethical considerations in
business decision making are
critical to fostering
community connection and
cooperation in the wealth
creation process.
• This believes that CSR cuts
across the entire Business
Cycle
Operations School
• Corporate social
responsibility is only
connected to corporate
governance at the
operational risk level.
• According to this school,
corporate social
responsibility is an
operational risk issue.

25. Conclusion
• Dislocations in the global economy in recent history which has called
into question the place of capitalism in guaranteeing global peace and
prosperity
• The dearth of a deep-seated understanding of how social and
environmental factors shape business outcomes and affect
organizational success has been at the heart of most corporate
failures and systems collapse