Analysing Active Shareholders and CSR for Corporate Sustainability

This assignment solution delves into the significance of active shareholders and Corporate Social Responsibility (CSR) policies in shaping corporate behavior and ensuring sustainability. It addresses the role of active shareholders in monitoring managerial actions and promoting financial discipline within corporations, highlighting their importance in optimizing corporate systems. Furthermore, it explores the necessity for corporations to abide by and implement CSR policies to demonstrate their commitment to sustainability, emphasizing the interconnectedness between CSR and sustainable business practices. The solution underscores how CSR implementation can mitigate business risks, enhance corporate reputation, and positively impact recruitment and staff retention, ultimately contributing to long-term environmental and social responsibility.

Assessment 3 online exam

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
Question 12......................................................................................................................................3
Active Shareholders from Corporate point of view.....................................................................3
Question 13......................................................................................................................................4
Need for corporations to abide by and implement the CSR policies to evidence sustainability. 4
CONCLUSION................................................................................................................................4
REFERENCES................................................................................................................................1

INTRODUCTION
MAIN BODY
Question 12
Active Shareholders from Corporate point of view
The control that comes from the delegation of ownership responsibilities has been an area
of constant debate as they hold a position where they are empowered to spend the money
invested by the people in the company. The outcome of this is some think that the process is
necessary for the smooth functioning of the organization while the others consider it
unnecessary, keeping the view in mind of money being spend in the activities that fits best to
their interest. The theory of shareholder activism supports the value that active shareholders keep
a check on the actions of the managers. In accordance to Uysal, Yang and Taylor (2018) active
shareholders also balance the behaviour of the managers. The two aspects supported by the
theory are considered essential from the corporate perspective as it efficiently and effectively
optimises the system of the entire corporation. Following the shareholder primacy that says
interests of the shareholders are the core for the corporation. As the interest of shareholders are
to get maximum returns and the interest for which a corporation runs is to earn maximum profits.
The control by the shareholders always tend towards encouragement to the financing activities as
it helps them in better retaining of their control over the company and also reviews the directorial
activities and mismanagement gets disciplined. The claim of the shareholders over the voting
rights includes managerial control rights along with the rights over the supply for gaps in
contracts. The agency theory clearly explains that the shareholders holding the rights make them
check whether the managers are working as per the interests that favours the shareholders. In the
views of Shingade and Rastogi (2019) theory also defends the point that shareholders are the only
owners exclusively in the organization by the fact that the financial risks are backed by the
investments made by them. As the shareholders spend their money it is fair action to give them
the claim over the rights for controlling the managerial actions. Further the minority shareholder
also benefits from the control of shareholders. So in conclusion as per the activism theory for

shareholders the active shareholders of the are essential for the corporate systems efficiency and
effectivity.
Question 13
Need for corporations to abide by and implement the CSR policies to evidence sustainability
Corporate social responsibility in today’s time has become a standard for business
practices. Government forms various policies to ensure that the corporate world follows their
societal responsibilities in course of routine business actions. The aim behind the corporations to
follow the policies is to have a positive impact over the society in their long run. There is link
between the effective implementation of CSR policies by a corporation with its sustainability.
The companies fulfil their sense of corporate social responsibility by making their business
processes sustainable. In the view of Christensen, Hail and Leuz (2019) a corporation having
sustainability in its business operations is considered socially responsible corporation. Through
CSR companies assume their responsibility over the impact its business operations have over the
society. The impact is inclusive of social, environmental and economic aspects. Implementation
of CSR policies that corporate level entails multiple benefits. The never ending risk factor
associated with the businesses get anticipated and managed effectively. The reputation of the
company gets improved in the society that effects the sales volume of the company. The brand is
considered as reliable, trustworthy and credible in the market. These factors affect the
recruitment, development and retain of staff ability of an organization positively by enhancing it.
The corporations are required to formulate and implement their corporate social responsibility
policies to prove their sustainability. It is required because of interlinked connection between the
two concepts (CSR and Sustainability). The need for assuming the corporate social responsibility
comes from the fact that the non-environmental business activities harm the environment and to
reduce this adverse impact over the environment the business adopt eco-friendly business
practices. The environmental friendly business operations are aimed at making the process
sustainable. Using materials and techniques that cause no or minimal harm to the environment
are called sustainable processes. Concluding, it can be said that it essential for corporate to abide
to the implemented CSR polices to evidence its sustainability.
CONCLUSION

REFERENCES
Christensen, H. B., Hail, L. and Leuz, C., 2019. Adoption of CSR and sustainability reporting
standards: Economic analysis and review (Vol. 623, pp. 1-121). Cambridge, MA, USA:
National Bureau of Economic Research.
Shingade, S. S. and Rastogi, S., 2019. Shareholders’ activism and firm performance: A review of
literature. Indian Journal of Commerce and Management Studies. 10(2). pp.22-30.
Uysal, N., Yang, A. and Taylor, M., 2018. Shareholder communication and issue salience:
Corporate responses to ‘social’shareholder activism. Journal of Applied Communication
Research. 46(2). pp.179-201.
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