ABSTRACT
This chapter examines the role of corporate governance codes in encouraging corporate responsibility, also known as corporate social responsibility or CSR. It explores the role of the board in corporate responsibility and how soft regulation can assist the board in fulfilling that role. At its simplest, corporate responsibility can be defined as a company operating in an economically, socially and environmentally sustainable manner or at least ‘considering, managing and balancing the economic, social and environmental impacts of its activities’ (PJC 2006, p. xiii). There is a wide literature on the reasons companies might take this approach: the business case for corporate responsibility is that it can improve corporate success through, amongst other things, improving reputation, motivating employees and reducing risk (Anderson 2005; CAMAC 2006). Equally there are sceptics of the concept who believe a company can only truly be responsible to one group and that this should be the shareholders (Friedman 1962; Jensen 2002).
