Just as integrating CSR and compliance can strengthen a
company's capacity to improve its environmental, social, and
governance performance, so can CSR strengthen a company's
overall compliance efforts.
In the context of CSR, stakeholders often ask companies to go
"beyond compliance" with existing legal and regulatory
standards. At the same time, stakeholder demands are often
predictive of the future content of legal and regulatory
requirements. A traditional compliance-based approach to social and
environmental performance may be focused on meeting current legal
requirements: an approach to environmental, social, and governance
compliance that is more aligned with a company's CSR strategy
may be more attuned to policy trends, shifting stakeholder demands,
and other developments that companies need to understand in order
to support effective long-term strategy development.
A recent article on corporate compliance
observed that, "the pace in which our world runs is not
slowing....Organizations that seek to manage their operational
fraud and compliance risks by solely imposing rule after rule will
never keep pace with change[.]" Failure to anticipate
where the law is going, or what key stakeholders may expect in
terms of corporate performance, will leave a company without the
capacity to address future requirements.
A responsible approach to CSR is one that is naturally attuned
to trends in law and policy. CSR has evolved and broadened in scope
over time along with normative understandings and expectations with
regard to companies' roles in society. If CSR is defined as
voluntary commitments to stakeholders, as opposed to legally
required compliance efforts, it can also certainly be seen as
predictive of the direction in which laws and regulations may be
trending. Integrating CSR into corporate compliance efforts may
focus executive and board attention on how best to build corporate
capacity to address both current and future expectations for
Excerpt reproduced with the permission of Wolters
Kluwer from Theodore Banks & Frederick Banks (eds.),
"Corporate Social Responsibility," Corporate Legal
Compliance Handbook, Chapter 15 (2016). A copy of the full
handbook can be purchased here.
To view Foley Hoag's Corporate Social Responsibility
Blog please click
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