ACC5CRE Advanced Corporate Reporting

Corporate social responsibility

In a business perspective, corporate social responsibility is defined as a self-regulating business model that can be employed by a company or any organization to enhance accountability to the company itself, to its relevant stakeholder and public as well. Corporate social responsibility is a tool that business organizations employ to ensure consciousness in relation to the impact they can have on all the dimensions and aspect of society that may include economic, social and environmentally wise. Engaging and practice of corporate social responsibility is one of the effective ways that organizations, both profit-making and non-profit making ones enhance society and the environment at large to avoid contributing negatively to it. “Corporate social responsibility (CSR) is an issue of growing interest, and the reporting of socially responsible activity is becoming more prevalent as investors, customers, and other stakeholders demand greater transparency about all aspects of the business. As the importance placed by stakeholders on socially responsible behaviour has increased, the attitude toward CSR has changed dramatically over the last few decades.

According to (Polonsky & Jevons, 2009), there is a need for organizations to be considerate on the carefulness of the activities they undertake in a responsible manner as well as understanding how their stakeholders these activities in general. This explains what an effective corporate social responsibility means to a stakeholder, an investor or a customer. Reputation and organization image is a key factor that each management should consider to protect. Different activities relating to CSR have either a positive or negative impact on the corporate reputation on different groups of stakeholders, and this can alter the perception they have regarding a certain organization. Stakeholders’ perception is very significant when it comes to the success of an organization. “Corporate social responsibility has the power to influence these perceptions, thereby contributing towards maximizing the earning potential of corporate reputation” (Unerman, 2008)

For the recent past, stakeholders have given more attention to the issue regarding corporate social responsibility and it’s due to this; we have been having many businesses and organization stakeholders wanting to be associated with only the organizations that are deemed to be socially responsible. Moreover, the companies, as well as the individual business, are equating social responsibility with increased profitability. According to (Sprinkle & Maines, 2010) organizations and companies are being motivated to undertake socially responsible behaviours and activities for some reasons which they can use as” window dressing” opportunities to appease customers, stakeholders and potential investors to their firms. These include:

1. To motivate and retains current employees
2. To enhance customer related motivations since corporate social responsibility entices potential consumers to purchase organizations products and services
3. To enhance any potential benefits in relation to recruitment

The driving force for organizations to enhance corporate social responsibility is to entice and encourage customers and all potential stakeholders for the above-mentioned benefits. On the other hand, when the organizations manage to appease various stakeholder groups, it also enjoys some positive effects resulting from the practice of cooperate social responsibility. This explains why organizations are fast growing their concern on the aspect of corporate social responsibility.  According to (Weber, 2008) practising corporate social responsibility has in the long run been of great importance and significance to the individual organizations in the following aspect:

1. CSR created a positive image and reputation for an organization thus creating a connection with its consumers and stakeholders.
2. It’s a tool  for cost-saving thus improved financial performance
3. It benefits the practising company or organization with increased revenues resulting from higher sales and larger market share
4. It’s a tool for reducing  CSR related risks and risks management as well

A case study on SUNCORP GROUP LIMITED

One of the companies that have been reviewed and recognized for practising corporate social responsibility is the Suncorp group limited company. This is an Australian based company dealing with Finance, insurance and banking services. This means it has a wide range of stakeholders, for instance, customers, employees, shareholders and investors, suppliers, educations institutions, the government, community, non-governmental organizations and industry associations.

In regards to the annual reports published by this company, we can classify the company as one of the organizations that practice corporate social responsibility due to its practice and content information provided by the company annual reports. The company has developed corporate responsibility frameworks to improve the business practices and actively manage the material environment, social governance risk involved and opportunities as well. This has enabled the company in building trust to its stakeholders through communication in honesty and transparent mode as well as offering all relevant financial statements in a responsible way. The company provides the following pieces of information to its stakeholders.

1. The gender distribution in terms of leadership roles whereas on August 3^rd2017 it was 49%for female representation and 51% for the male representation. This information is crucial for customers and employee and society at large. (Switkowski, 2017)
2. The dividend share for each annual transaction period and total shareholder return where for instance as at 2017 they total dividend was 73%. This information is important for any shareholder in that company as well as potential investor intending to invest in shares. It also posts financial statements alongside annual reports.(Suncorp group , 2017)
3. The company also informs on how it engages the society and environment matters. It explains how it has contributed to environmental contribution in its annual reports by indicating its success in the decrease in greenhouse gas emission with a further 11% as at 2017
4. It provides information regarding leadership structure and board of directors for all stakeholder awareness in each and every annual report for transparency purposes
5. It provides finer details regarding tax by publishing tax transparency reports and also an indication of their adoption to the Australian Board of taxation voluntary Tax transparency code. These reports indicate the taxes they contribute to the Australian and New Zealand economies(Kim et al., 2012)
6. It also provides information on how it engages its stakeholders in the activities and decision making through the provision of surveys to generate feedback from stakeholders as well as holding meetings and research engagements.

From the details accessed in the Suncorp website and annual reports, it’s correct to conclude that, with respect to corporate social responsibility, disclosures are adequate for the stakeholders of the company

References

Kim, Y., Park, M.S. & Wier, B., 2012. Is earnings quality associated with corporate social responsibility. The Accounting Review, 87(3), pp.761-796.

Polonsky, M.M. & Jevons, C., 2009. Global branding and strategic CSR:an overview of three types of complexity. International Marketing journal review, 26, pp.327-47.

Sprinkle, G.B. & Maines, L.A., 2010. The benefits and costs of corporate social responsibility. Business Horizons, 53, pp.445-53.

Suncorp group , 2017. Financial reports. [Online] Available at: https://www.suncorpgroup.com.au/investors/reports [Accessed 24 Sep 2018].

Switkowski, Z., 2017. About suncorp. [Online] Suncorp Available at: https://www.suncorpgroup.com.au/uploads/pdf/reports/FY17-Annual-Review.pdf [Accessed 24 SEP 2018].

Unerman, J., 2008. Strategic reputation risk management and corporate social responsibility reporting. Accounting, Auditing & Accountability journal, 21(6), pp.362-64.

Weber, M., 2008. The business case for corporate social responsibility: a company level measurement approach for CSR. Europea Management journal, 26, pp.247-61