Corporate Social Responsibilities Law & Practice

This work sets out to critically examine the traditional approach of companies, with an emphasis on profit maximization, and to contrast it with the growing perception that companies fulfil a social service as well as a profit-making function. According to the traditional theory of the firm, the major responsibility of companies is to maximize profits which will in turn serve the best interests of society. The role of company law, therefore is to provide a set of rules and regulations conducive to profit maximization. Modern theorists, however, reject this traditional view, maintaining that companies have objectives other than profit maximization, which include corporate social responsibilities, and that the existing legal framework should be adapted to allow directors to pursue social welfare policies for the benefit of the wider community. Company decision-making processes will need to be changed to take account of these social activities. This book looks at the need for recognition of corporate social responsibilities (comparisons are drawn with the US system) and examines the way in which certain judicial developments in this area might be implemented in legislation, thus providing a broader role for companies in which to discharge their social responsibilities, a role which would be compatible with actual prospective developments within the European Union.