This document provides a summary of a summative assignment on corporate social responsibility. It discusses how CSR can be defined as corporations having legal, ethical and philanthropic responsibilities beyond shareholder wealth maximization. It will examine minimum legal expectations of CSR in different jurisdictions like Australia and China. It argues that CSR is a voluntary moral expectation rather than a legal duty. This is illustrated by examining CSR practices of Australian mining companies and Apple. While these companies adopted many CSR policies and commitments, they failed to consistently implement them, especially when it came to issues like workers' rights and conditions. This shows that reputational risk was a main driver for CSR adoption, but other duties like profit-making could outweigh CSR in practice.

1. SXL3121: Company Law
Summative Assignment
Due date: 9th
March 2012
“Critically discuss the notion of corporate social responsibility giving
particular attention to minimum legal expectations”
Corporate social responsibility can be best defined as:
“[…] directly related to giving a name to the idea that corporations should engage in activities that
are more than shareholder wealth maximisation or ‘strictly business’. Instead, companies, in
addition to their economic responsibility at the bottom of the corporate responsibility pyramid,
should have legal, ethical and philanthropic responsibilities”1
.
I’ll be incorporating comparatives from different jurisdictions, notably Australia and China. China’s
acknowledgement of CSR2
is relatively new and in light of the recent controversy over the Apple
Foxconn factories3
and historically, in the oil industry4
, it is relevant. In exploring the statutory
minimumlegal expectations, I will argue that CSR is just a voluntary and moral expectation, rather
than a legal one. I will bring in the argument that it depends on the area of business that the
company is involved in and its level of multinational integration that affects which CSRs are
neglected, or reinforced. This will be illustrated through a consideration of Australian mining
companies and Apple’s take on CSR. In examining these practical applications it is evident that;
international regulation,the mediaandcivil society groups play a very important role in advocating
and forcingcompaniestotake corporate social responsibility seriously. As one commentator on the
infamous James Hardie inquiry of 2004 said:
1 A.B. Carroll, “The pyramid of Corporate Social Responsibility: Toward the Moral Management of
Organizational Stakeholders” (1991) 34 Business Horizons 39.
2 Referred to as ‘CSR’ throughout the rest of this essay.
3 February 9th 2012, Lamson Consulting. http://lamsonconsulting.com/blog/?p=197 [Accessed February 25th,
2012].
4 Documentary: “China vs. the US – The Battle for Oil” (2007-SDTV-d0x).avi

2. “Shamedbyunions,governmentsandvictims,publiclyfloggedbythe media,the subject of a special
commission and ultimately brow-beaten into appropriately compensating its victims”5
UK Companies Act 2006, the minimum legal requirements:
In the UK, directors of companies owe certaindutiestowardsthe company6
for which they direct or
formerlydirected7
.These dutiesare contained in Chapter 2, sections 170-177 of the Companies Act
2006. They are: the duty to act within powers8
; duty to promote the success of the company9
, the
dutyto exercise independentjudgement10
,the dutytoexercisereasonable care,skill anddiligence11
,
the duty to avoidconflicts of interest12
, the duty to not accept benefits from third parties13
and the
duty not to declare an interest in a proposed transaction or arrangement14
.
These sections set out the minimum legal expectations owed to the company under UK company
law.Theyare an amalgamationof fiduciaryandcommonlaw duties.The rational is that a director is
seenasa trustee,whose role it is to protect and preserve the assets for the company, as well as an
entrepreneur,whohasa duty(amongstotherduties) toexercise reasonablecare,skill and diligence
within this function15
. The legislature had to balance precision with a need for flexibility16
, so that
5 Elizabeth Knight, “Victory for ASIC over Hardie, but how big and for how long?”, (April 24, 2009), Sydney
Morning Herald. http://www.smh.com.au/business/victory-for-asic-over-hardie-but-how-big-and-for-how-
long-20090423-agsh.html [Accessed March 4th, 2012].
6 Section 170 (1) the general duties specified in sections 171 to 177 are owed by a director to the company.
Therefore under the principle established in Percival v Wright, the shareholders have no cause of action
against the directors for breach of their duties.
7 Section 170 (2) A person who ceases to be a director continues to be subject –
(a) To the duty in section 175 (Duty to avoid conflicts of interest), and
(b) To the duty in section 176 (Duty not to accept benefits from third parties).
8 S.171 Companies Act 2006.
9 S.172.
10 S.173.
11 S.174.
12 S.175.
13 S.176.
14 S.177.
15 Compiled by Aled Griffiths, ‘Company law’, pg.152.
16 The explanatory notes to the act identify this difficulty: “Frequently the courts may formulate the same idea
in different ways.In contrastlegislation isformal.Itis not easy to reconcile these two approaches but the draft
sections seek to balance precision against the need for continued flexibility and development” (at para 305).

3. there wasroom for development - shouldsituationsthatwere notcontemplated arise17
. Due to this
‘broad-brushdraftingstyle’18
confusion arose whenconsideringthe implicationsof s. 170 (3)19
and s.
170 (4)20
because sub (3) implies that pre-existing common law and equitable rules are to be
replaced,whereassub(4) statesthatstatutorydutiesare to be understood and applied in the same
manneras the rulesand principles they replace. Lord Hodge in Eastport v Gillespie21
made clear the
position22
.
So, the relevant provisions replace pre-existing law, although s. 170 (4) directs the courts to have
regard to the pre-existing case law when interpreting and applying the general duties23
.
When considering CSR s. 172 of the 2006 Act is particularly important and will be the focus of this
essay. It sets out that the company must act in ‘good faith’ as Foster J said in Dorchester Finance v
Stebbing24
. S.172 states:
“A director of a company must act in the way he considers, in good faith, would be most likely to
promote the success of the company for the benefit of its members as a whole”25
.
17 “[...] it is clear that achieving an accessibility policy goal had to be balanced against the need for judicious
draftingto ensure that the duties were sufficiently flexibleto be applied to a wide range of circumstances.This
necessitated a relatively broad-brush drafting style”. [Ahern Deirdre, “Directors’ duties, dry ink and the
accessibility agenda”, Law Quarterly Review (2012)].
18 Ibid.
19 “The general duties are based on certain common lawrules and equitableprinciplesas they apply in relation
to directors and have effect in place of those rules and principles as regards the duties owed to a company by
a director”.
20 “The general duties shall be interpreted and applied in the same way as common law rules or equitable
principles, and regard shall be had to the corresponding common law rules and equitable principles in
interpreting and applying the general duties”.
21 [2009] CSOH 119.
22
“Parliament has directed the courts not only to treat the general duties in the same way as the pre-existing
rules and principles but also to have regard to the continued development of the non-statutory law in relation
to the duties of other fiduciaries when interpreting and applying the statutory statements. The interpretation
of the statements will therefore be able to evolve. The statutory statement of the general duties of directors is
intended to make those duties more accessible to commercial people”. [para 8 of judgement].
23 Remedies for breach of duties include: (1) damages or compensation where the company has suffered loss;
(2) restoration of a company’s property; and (3) an account of profits made by a director, and rescission (i.e.
treating any contract made by the director as if it had not existed) where the director has failed to disclose an
interest.
24 [1989] BCLC 498 PER Foster J: “A director must exercise any power vested in him as such, honestly, in good
faith and in the interests of the company” [pp. 501-502]. This is codified in s.172.
25 S.172, Companies Act 2006.

4. In promoting the success of the company the director should have regard to a list of aspects26
.The
wording of the section27
suggests it is a non-exhaustive list and therefore others should be
considered if the situation requires it.
CSR is a voluntary and moral expectation, not a legal one:
It is therefore arguable that the fact that a director need only have ‘regard’ for the above aspects,
means that it lacks a definite legal requirement to act on these conditions. Although CSR is given
statutory effect by the Companies Act 2006, the primary duty of the director(s) has historically
always been to make profit for the company and as a result these requirements usually get
overlooked. As will be illustrated, the ‘enlightened self-interest’28
approach is advisable for
companies that want long-term success and should therefore, adopt good CSR practices29
. But it
seemstoonly be a moral30
requirementwithwhichtomitigate ‘reputational risk’31
, rather than out
of any real legal duty to do so. This point will be illustrated by a consideration of multinational
companies throughthe argumentthatthe level of CSRintegration seemsto depend on: (a) the type
of industry in which the company operates and (b) the degree to which the business has
internationalisedinanoperationaland/ormarketsense32
.Firstly byconsidering ; Meredith Jones et
26 (a) The likely consequences of any decision in the long term,
(b) The interests of the company’s employees,
(c) The need to foster the company’s business relationships with suppliers, customers and others,
(d) The impact of the company’s operations on the community and the environment.
(e) The desirability of the company maintaining a reputation for high standards of business conduct, and
(f) The need to act fairly as between members of the company
27 Section 172, Companies Act 2006: “[...] have regard (amongst other matters) to”.
28 “That is,beyond the obligations of companies to comply with laws,itis likely to be in to be in the company’s
own commercial interests, in terms of long-term value creation and risk reduction, to take into account the
environmental and social context in which it operates” [Corporations and Markets Advisory Committee, “The
social responsibility of corporations report (December 2006)].
29 Many scholars also argue that CSR suggests that those companies who promote the interests of society will
tend to be financially successful, especially in the long-term [See: M Orlitzky, ‘Corporate Social Performance
and Financial Performance: A Research Synthesis’ in A. Crane, A. McWillams, D. Matten, J. Moon and D. Siegel
(eds) The Oxford Handbook of CSR (Oxford: Oxford University Press, 2008) p. 133].
30 And an almost voluntary adoption of CSR practices.
31 Meredith Jones et al: “Corporate Social Responsibility and the Management of Labour in Two Australian
Mining Industry Companies”, pg. 59, Volume 15, Number 1, January [2007].
32 Ibid.

5. al33
multinationalAustralianminingcompanies34
andsecondly, Apple’s CSRfailings in their factories
in China.
Australian Mining Companies and Technology giants Apple:
The two mining companies, known as Rio Tinto and BHP Billiton were the focus of the paper. The
reasonfor thisisthat bothcompanieshadundertakencontroversial policies35
and activities prior to
and during the restructuring in becoming multinational companies36
. They voluntarily adopted a
large amount of second class instruments37
, in the aim that the adoption of CSR policy would “[…]
offsettingorsofteningcriticisms of their corporate governance practices and business activities”38
.
Thisis the firstillustrative exampleandreasonfor whyCSR integrationissimply moral andvoluntary
because it was incorporated for the reason of diluting its former practices39
.
It was the ‘reputational risk’ that the companies faced which was a key for integration of such
policies.Thesereputational risks arose because mining companies deal with finite non-renewable
resources and a diverse range of environmental impacts, and therefore, subject to a higher
reputational risk - predominantly in relation to how effectively they integrate and account for
environmental concerns40
.Furthermore,the mobilityof aminingcompany is limited to the location
33 Meredith Jones, Shelley Marshall and Richard Mitchell’s: ‘Corporate Social Responsibility and the
Management of Labour in Two Australian Mining Industry Companies’, Volume 15, Number 1, January 2007.
34 Rio Tinto and BHP Billiton.
35 BHP Billiton in the 1990s had been under financial pressure and had therefore begun to implement a
controversial industrial relations policy, mirroring, to some extent, that of its competitor Rio Tinto. This
included a strategy of de-collectivisation and individual contracting. In 1998, Rio Tinto came under pressure
from the International Federation of Chemical, Energy, Mine and General Worker’s Unions.
36 They were becoming companies that operated in many different countries that crossed both legal and
cultural borders.
37 Notably: FTSE4Good, SA8000, Dow Jones Sustainability index. All of which, will be considered further on to
see whether their adaption made or could have any actual impact on the CSR.
38 Meredith Jones et al, pg. 57.
39 It was not incorporated for the reason that they were legally bound to do so, or that they felt it would be
good social business practice to do so.
40 “Tilt and Symes, (1999) have noted that the finite nature of non-renewable resources, the diverse
environmental impacts associated with their extraction, the particular economic importance of primary
extraction,and the social impacts on local communities associated with mining activities are among the most
important factors”. [Meredith Jones et al, pg. 59].

6. of the resources41
;itis therefore a long-term investment42
that may have a perpetual impact upon
locals.Itis therefore integral to possess good CSR practices and to have a concern for the impact of
operations on the community and environment. The cost appears to be a slackening in other CSR
practices. These were; the labour management and rights of the workers in relation to union
membership.
It was identifiedinthisstudy thatcompanies,includingRioTintoandBHP Billiton,wantedtobe seen
as adopting CSR practices but in reality, few actually integrated and committed to such practices
effectively.Inconcluding, it was argued that although it is hard to pin-point the exact effect of CSR
on labourmanagement,bothcompaniesmade veryboldcommitmentstothe principles of freedom
of associationandcollective bargainingas part of their CSR policies. Yet neither company has acted
consistently in line with these commitments43
.
For the reasons outlined above, CSR should be of paramount importance for such companies on a
multinationalscale andcompaniesshouldn’thave togetto the pointof public/international critique
before actuallyaimingtoenforce good CSR practices. Although they committed and adopted many
policies44
andhadsome success statistically45
,inpractice theyfailedtodeliver. It is evident that the
reputational riskthatcomeswithinthis type of industry andthe degree of multinational aspiration,
did contribute somewhat to CSR policies being adopted, albeit imperfectly46
.
41 “Whilst operations may be global, mining companies must operate where the resources lie” (Allem, 2003).
42 “Mining companies are less able to use the threat of exit in negotiations with unions or with governments.
As a result of the long-term nature of operations, they may be more vulnerable to the claims of stakeholders”
[Meredith Jones et al, pg. 59].
43“Equally, it must be said that there is no clear indication that the labour management systems of Rio Tinto
and BHP Billiton are evolving towards the kind of innovative workplace systems which would also, or in the
alternative to collective structures, register as “desirable” practices in a CSR sense”. [Meredith Jones et al pg.
65].
44 Notably Rio Tinto became an international signatory to the UN Global Compact, and endorsed the UN
Universal Declaration of Human Rights and the US/UK Voluntary Principles on Security and Human Rights. As
well as many other environmental indexes (see footnote below)
45 They ranked highly in both the Business in the Environment annual Index of Corporate Environmental
Engagement and the Business in the Community Index Corporate Social Responsibility Index.
46 “At best then, it might be said that the adoption of CSR policy may have altered slightly some aspects of
what otherwise appears to be trenchantly anti-union and unenlightened approach to employment relations”.
[Ibid pg.62].

7. When considering technology giants Apple, it appears that similar issues arise with regards to the
actual enforcement of CSR policies when the annual reports clearly outline the problems. These
issuesarose because of the suicidesof workersatApple Foxconnplants. Withtechnologycompanies
it seems that supply and demand outweigh the working and living conditions of its employee’s.47
Former executives of Apple have said that the executives want to improve conditions within
factories, but the dedication falters when it conflicts with crucial supplier relationship or the fast
deliveryof newproducts48
.EventhoughApple achieved record breaking profits, the executive said
that saleswouldhave beenhigherif overseasfactorieshadbeenable toproduce more49
.Again, this
is an example of the duty to make profits outweighing the other duties of the director.
Apple doeshave acode of conduct50
,as well asannual supplierresponsibility reports51
whichoutline
that Apple does implement certain CSR reports. As chief executive Tim Cook said: “Workers
everywhere have the righttoa safe and fairworkenvironment[...]whichiswhywe’veaskedthe FLA
to independently assess the performance of our largest suppliers”52
.
The resultsof the LPA will be publishedin March but they will likely detail issues that are known to
exist. After the Mail on Sunday exposed a factory in 200653
, Apple conducted audits every year.
More than half the suppliers audited by Apple have violated at least one aspect of the code of
conduct every year since 2007 and in some cases violated the law, according to the social
47 Executives at other companies, not just Apple, have also identified these similar problems. Acknowledging
that This system may not be pretty, they argue, but a radical overhaul would slow innovation. Customers want
amazing new electronics delivered every year. [See:
http://www.nytimes.com/2012/01/26/business/ieconomy-apples-ipad-and-the-human-costs-for-workers-in-
china.html?_r=1&pagewanted=all]
48 Charles Duhigg and David Barboza, “In China, Human Costs Are Built Into an iPad, The New York Times,
published January 25th, 2012.
49 http://www.nytimes.com/2012/01/26/business/ieconomy-apples-ipad-and-the-human-costs-for-workers-
in-china.html?_r=1&pagewanted=all
50 http://www.apple.com/supplierresponsibility/code-of-conduct/
51 http://www.apple.com/supplierresponsibility/
52 Rory Cellan-Jones, “Apple factories to face independent inspections”, BBC News, 13 February 2012
http://www.bbc.co.uk/news/technology-17015824.
53 “The stark reality of iPod’s Chinese factories, Mail on Sunday, 18th August 2006.

8. responsibility reports. A summary of the 2012 audit states that the issues have pertained:54
The
same issueshave continuedtoarise with no legal sanctions or independent bodies challenging the
company55
, as one Apple executive stated:
“If you see the same pattern of problems, year after year, that means the company’s ignoring the
issue rather than solving it”.56
Apple’swebsite states that if an audit reveals a violation, then it must be remedied within 90 days
and make approachchanges, “If a supplierisunwilling to change, we terminate our relationship”57
.
The fact that these issues58
have been identified by the audit year after year seems evident that
Apple has monumentally failed in its CSR policies. This suggests that CSR is something companies
wishto be seenasadopting,ratherthan actuallyimplementing.Aswassuggested above59
,suppliers
saying that they will ‘try harder’ is not sufficient, responsible or socially acceptable. One
commentatorhassuggested,however:“If Applelearnsitslessonsoonenough,itmayevenseize the
opportunity to lead growth in social compliance in the tech industry”60
.
The Importance of the Media, International regulations and Civil Society
groups in CSR:
With CSR not generally being recognised as a legal requirement but more of a moral or voluntary
one, the media is playing a more important role as a watch-dog. It has exposed companies who
aren’tactingsociallyresponsibleandcommunicatingthistothe consumer),whichcanhave dramatic
54 “We uncovered some violations and worked with our suppliers to correct the issues”
http://www.apple.com/supplierresponsibility/reports.html (paragraph 3)
55 Unlike the case with the Australian Mining Companies above.
56 “Noncomplianceis tolerated, as long as the suppliers promise to try harder next time. If we meant business,
core violationswould disappear”.Charles Duhigg and David Barboza, “In China, Human Costs Are Built Into an
iPad, The New York Times, published January 25th, 2012
57 http://www.apple.com/supplierresponsibility/auditing.html
58 Poor pay, poor living and work standards etc.
59 “Noncompliance is tolerated, as long as the suppliers promise to try harder next time”
60 Apple’s CSR Dilemma: Lessons Learned, February 9th, 2012, Lamson Consulting
http://lamsonconsulting.com/blog/?p=197

9. effects61
.Fora companysuchas Apple,who relies heavily on its image and having a customer base
that tends to be “young and educated people who are often mindful of social and environmental
issues”62
, being reported in such a light, has the very real risk of affecting its customer base.
Duringthe 1990s Rio Tintowasof increasinginternationalconcernbecause of itsindustrial relations
policyandthe impact of its mining operations on both, the environment and human rights. In 1998
they came under fire from the International Federation of Chemical, Energy, Mine and General
Worker’s Unions63
. Albeit their efforts were defeated64
, it attracted much media attention65
. Such
efforts were attributable to why Rio Tinto began to incorporate CSR policies subsequently66
.
Anotherprime example of the importance of the media’scorrespondencetothe public is in relation
to the James Hardie Inquiry of 200767
. Following media coverage and public outrage about the
inadequate arrangements made by JHIL68
to compensate the victims of their asbestos negligence,
the NewSouthWalesGovernmentestablishedaninquiry69
.AlthoughJHIL had no legal obligation to
provide such arrangements they were under a moral obligation to do so in an attempt to salvage
61 As was seen in the sabotage of Nike in the 90’s. Consumers and stakeholder will not tolerate companies
being social irresponsible.
62 “Apple’s CSR Dilemma: Lessons Learned”, February 9th2012, Lamson Consulting.
63 International Federation of Chemical, Energy, Mine and General Workers’ Unions (ICEM), Rio Tinto: Tainted
Titan 1997 and Rio Tinto: Behind the Façade, 1998.
64 The CFMEU campaigned to make Rio Tinto firstly; appoint an independent, non-executive director to the
company’s board and secondly; the introduction of credible workplace code of labour practice based on the
core standards of the International Labour Organisation (ILO) [see: http://www.ilo.org/global/standards/lang--
en/index.htm, accessed 08th March, 2012].
65 Anderson and Ramsay, 2006.
66 Meredith Jones et al, pg 60: “Contemporaneously with, and perhaps because of, these developments, the
company also moved towards the adoption of a comprehensive CSR strategy”.
67 The James Hardie group of companies dealt in the manufacture and distribution of asbestos products at a
time when the link between asbestos and health problems was known. The group’s negligence in the use of
asbestos had ceased years before, but the liabilities accrued over the years, and continued to accrue for many
years after [See: James Hardie Inquiry, 2004, vol. 1, p.19 at
http://www.dpc.nsw.gov.au/data/assets/pdffile/0020/11387/PartA.pdf]
68 They tried to avoid their corporatesocial responsibility by seekingto shiftthe costof their asbestos liabilities
to the victims themselves and indirectly to the taxpayer – by utilizing an interposed subsidiary.
69 Report of the Special Commission of Inquiry into the Medical Research and Compensation Foundation
(September 2004) (James Hardie Enquiry), at:
http://www.dpc.nsw.gov.au/data/assets/pdffile/0020/11387/PartA.pdf]

10. their commercial image and CSR. The inquiry indicated that in failing to provide adequate funding
and acting as they did, it resulted in very “adverse results to the public standing”70
.
As well as domestic stock exchanges and regulation, international regulation also plays a
fundamental role in the adoption of CSR71
because the CSR indexes, in particular, promote self-
regulationandconstantimprovementof companiesCSRpractices. The two groups of regulation are
‘reflexive regulation72
’ and the second type outlines the minimum standards and principles which
companies might commit to in their operations73
.
Arguably the most effective and respected74
of the reflexive regulations is the Dow Jones
Sustainability Index75
because it provides the highest standard of CSR among other such
instruments76
. The reasons are threefold:
Firstly; it requires the disclosure about compliance with the ILO convention on freedom of
associationandpercentage figuresof employeescoveredbycollective bargainingor represented by
an independenttrade union77
.Secondly,detailsof the extentof consultationswithtrade unionsover
organisational change must be disclosed78
and finally, the Index includes a section on “Human
Capital Development, and Talent Attraction and Retention”79
. For a company to implement and be
70 James Hardie Inquiry, 2004, Vol.1, p.12.
71 “In addition to these Australian-derived regulationswhere are various sets of international regulationswhich
may also be an important catalyst for the development of CSR policies in Australian Companies” [Meredith
Jones et al, pg.58].
72 Promotes self-regulation and constant improvement of CSP practices.
73 Ibid.
74 In ‘Rate the Raters’ in October 2010, the DOW Jones Sustainably Indexes were identified as the most
crediblesustainablerating approach amongst 100+ rating organisations surveyed. http://www.sustainability-
indexes.com/07_htmle/assessment/overview.html
75 http://www.sustainability-indexes.com/
76 Meredith Jones et al, pg.59.
77 Ibid.
78 Ibid.
79 Companies disclose and detail performance indicators used in executing skill mapping and development
strategies, the share of performance-related compensation and to provide information about the satisfaction
levels of employees. [Ibid].

11. regarded highly in this index has been argued to be increasingly influential amongst NGO groups,
company employees, journalists and other stakeholders80
Other such instruments include the SA800081
and FTSE4Good.
The second type that outline the minimum standards include the ILO Declaration on Fundamental
Principles and Rights at Work82
, the UN Declaration of Human Rights83
, the OECD Guidelines for
Multinational Enterprises84
,the US/UKVoluntary Principles of Security and Human Rights85
and the
Global Impact86
.It shouldbe notedthatall of these are adoptedona voluntarybasis and companies
choose to what extent they integrate the instruments. It is this that limits their effectiveness as
adequate CSRenforcementandacts more as a badge that a company can proudly parade in front of
its competitors87
.
The final CSR ‘enforcer’ is public bodies. During China’s research report88
which collected the
opinions of various interests89
, the National People’s Congress from Shanghai suggested the
inclusion of CSR in the new Company Act90
. With their support and other various sources, the
legislatorsdecidedtoincorporate CSRinto Chinese company law. It is given statutory effect in art 5
80 ‘Rate the Raters’ http://www.sustainability-indexes.com/07_htmle/assessment/overview.html
81 After the enforcement of art.4 of CCL 2006 on CSR in China, more than 300 companies have strived to and
have been granted the SA 8000 certificate.
82 See: http://www.ilo.org/dyn/declaris/DECLARATIONWEB.INDEXPAGE
83 http://www.un.org/Overview.rights.html
84 http://www.oecd.org/department/0,2688,en_2649_34889_1_1_1_1_1,00.html
85 http://www.state.gov/g/drl/rls/2931.htm
86 http://unglobalcompact.org/Portal/Default.asp?
87 “although international CSR standards will continue to play a very important role in strengthening CSR
internationally,the Government and related organisations should try to build tailored standards on social and
environmental responsibility and technical regulations based on the economic situation [...] disclosure on
corporate social and environmental responsibility and behaviours should also be an important factor of
implementing CSR more efficiently and completely”, Jingchen Zhao, “The regulation and steering of corporate
social responsibility in China: stories after the enforcement of Chinese Company Law 2006”, International
Company and Commercial Law Review, 2011.
88 K. Cao et al (eds) “A Research Report on the Amendment to Company Law”, Beijing: China Legal Publishing
House, 205.
89 Notably; corporations, experts and the public
90 They suggested that: “[...]in addition to protecting shareholders’ interests, company should also consider
other social interestsuch as the interest of employees, consumers, creditors, local communities, environment,
socially disadvantaged groups, and the general public [pp 13-30 of research report].

12. of the CCL 200691
. The importance of this should not be underestimated because Chinese law had
not acknowledgedCSRprior to this. In doing so, corporations are now implicitly legally required to
observe social, moral and business ethics and undertake social responsibilities92
.
To conclude, it seems apparent through the examples given above that although CSR is given
statutory affectinvariousjurisdictionsitisstill onlyavoluntaryorat most a moral requirement. The
media, international regulations and public bodies/opinion will continue to play a critical role in
fighting for CSR practices. But, companies risk a lot by not incorporating CSR practices and
maintaining them and therefore it is there interest to do so:
“The managementof non-financial risksmaynotnecessarilymaximiseprofitsorshareholder wealth
in the short-term; however, failure to properly identify and manage these risks may cause
considerable detriment”93
.
91 It states: “[A] company must, when engaging in business activities, abide by the laws and administrative
regulations, observe social morals and business ethics, be integrity and good faith, accept regulation of the
government and the public, and undertake social responsibilities”.
92 Jingchen Zhao, “The regulation and steering of corporate social responsibility in China: stories after the
enforcement of Chinese Company Law 2006”, pg.2, International Company and Commercial Law Review, 2011.
93 Shirley Quo, ‘Corporate Social Responsibility and CorporateGroups: The James Hardie Case,Company
Lawyer, 2011.

13. Bibliography
TextBooks:
AledGriffiths, “Company Law”(1st
edition,PearsonEducationLimited2007, 2009, 2011)
M Orlitzky, ‘CorporateSocialPerformanceand FinancialPerformance:A Research Synthesis’ inA.
Crane,A.McWillams,D. Matten,J. Moon and D. Siegel (eds) TheOxford Handbookof CSR (Oxford:
OxfordUniversityPress,2008) p. 133].
Law Journals/review:
A.B.Carroll,“The pyramidof Corporate Social Responsibility:Towardthe Moral Managementof
Organizational Stakeholders”(1991) 34 BusinessHorizons 39
AhernDeirdre,“Directors’duties,dryinkandthe accessibilityagenda”,Law QuarterlyReview,2012.
JingchenZhao, “Theregulation and Steering of corporateSocialResponsibility in China:stories after
the enforcementof ChineseCompany Law 2006”, International CompanyandCommercial Law
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