CSR and Corporate Governance: Recommendations for ASX Companies

This report provides recommendations for implementing Corporate Social Responsibility (CSR) and Corporate Governance disclosure for companies listed on the Australia Stock Exchange (ASX). It highlights the interconnectedness of CSR, which focuses on a company's accountability to society and the environment, and Corporate Governance, which involves the rules and regulations governing an organization's decision-making. The report emphasizes the importance of integrating CSR and Corporate Governance into a company's constitution and practices to enhance performance, boost investor confidence, and promote sustainable development. It also discusses the ASX's role in promoting ethical policies, managing environmental, social, and governance risks, and ensuring transparency in corporate governance practices.

Running head: Corporate Governance & Ethics
Corporate Governance & Ethics

Corporate Governance & Ethics 1
Executive Summary
Corporate Social Responsibility (CSR) and Corporate Governance Practices are interconnected
terms which govern the administration of the corporates. While CSR is the accountability of the
company for its decisions and activities which have an impact on the society and environment,
Corporate Governance is the rules and regulations which administer the decision making of the
organization.
So, CSR and Corporate Governance should be assimilated in the constitution of the company and
followed in its dealings. In this report, the recommendations regarding the implementation of
CSR and Corporate Governance disclosure by the company listed on the Australia Stock
Exchange would be stated.

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Contents
Executive Summary.....................................................................................................................................1
Introduction.................................................................................................................................................3
Corporate Social Responsibility (CSR) Disclosures required by the Listed Companies in Australia..........3
Corporate Governance Practices Required to be complied by the Listed Companies in Australia..............4
Recommendations.......................................................................................................................................5
Conclusion...................................................................................................................................................6
References...................................................................................................................................................7

Corporate Governance & Ethics 3
Introduction
The CSR acts as the global governance mechanism. It assists in the sustainable development of
the society comprising of its health and welfare. Corporate Governance considers the outlook of
the stakeholders. CSR and Corporate Governance are two interdependent terms. While CSR is a
procedure through which the business ensures that it complies with the prescribed norms in letter
and spirit and the ethical standards. Corporate Governance monitors that the company is
complying with the applicable laws and regulations of the country and its operations are
consistent with the international norms of behavior.
In this report, the recommendations regarding the implementation of the CSR disclosure and
Corporate Governance practices by a company which is listed on the Australia Stock Exchange
shall be stated (ACCSR, no date).
Corporate Social Responsibility (CSR) Disclosures required by the Listed Companies in
Australia
According to ASX (2018) CSR is the approach which is dedicated to the sustainable
development by providing social, environmental and economic benefits for the stakeholders. The
Australian Stock Exchange Board (ASX Board ) governs the environmental, social and
governance risks (ESG) faced by the companies through its enterprise risk management
framework. Its strategy is to manage these risks and to affect the society through its contribution
in the financial market and its mechanisms to monitor the compliances followed by the
companies.
The ASX with the help of CSR promotes the awareness among its investors regarding the
potential rewards and the risks of investing. It assists in the easy access of the tools and
techniques to the investors which will safeguard their interests and protect them against frauds.
In this regard, the ASX Corporate Governance Council has been formulated to establish a
principle based framework for corporate governance policies.
According to Chai et al. (2015) the ASX listing rules, the listed entities are required to reveal the
extent to which they have complied with the corporate governance framework. They must

Corporate Governance & Ethics 4
explain through its ‘If not, Why not reporting’. These compliances bring transparency to the
governance practices of the listed companies which help the investors in making informed
decisions.
ASX participates in the Carbon Disclosure Project which is related to the emissions and waste of
the carbon gas. It has also participated in the FTSE4 Good Index Series which identifies the
corporates which meet the social and environmental criteria. It has participated in World
Federation of Exchange annual survey which describes the exchange’s role in maintains
sustainability (Adeneye & Ahmed, 2015).
Hence, ASX promote the policies related to ethics, code of conduct, anti-bribery and corruption,
fraud control and whistleblower protection to safeguard the interests of the investors and
promote the development of the corporates.
Corporate Governance Practices Required to be complied by the Listed Companies in
Australia
The Corporate Governance is the set of rules and regulations which govern the listed companies
in Australia. It is the mechanism by which the companies are accountable to their investors.
Good corporate governance practices boost investor confidence which will enhance the
capability of the organization to compete for investments (United Nations Industrial
Development Organization, 2018).
For this purpose, ASX Corporate Governance Council has been formulated .It laid down the
Principles and Recommendations for the listed companies on the ASX. They were established
with the intention to achieve the expectations of the shareholders and the investors. The Council
has laid down the “If not, Why not” approach regarding the listed entities on the ASX. If the
board of directors of the listed entity does not adopt any of its recommendations then they should
explain why they have not adopted the recommendation under particular situation.
This approach gives the overview to the investors regarding the information related to the
company’s policies of governance and administration. It facilitates the stakeholders and the
investors to have a meaningful dialogue with the board of directors regarding the matters of

Corporate Governance & Ethics 5
decision making. It will help them to decide whether to invest in a particular company or not.
Hence it safeguards the interest of the investors and enhances the goodwill of the company.
Hence, the corporate governance practices states the roles and accountabilities of the board
clearly and conveys them the methods how their performance would be monitored. They also
assist in the composition of the board of directors, their responsibilities as per their skills so that
they can perform their duties efficiently (ASX, 2014).
Recommendations
Corporate Governance and Corporate Social Responsibility are two interconnected terms which
help the listed entities to administer their management in an efficient manner. The goal of the
organization should be to formulate the most efficient framework which can enhance their
performance and at the same time it should be in confirmation with the various compliances to
be followed by the company.
The corporate social responsibility should be in agreement with the corporate governance
framework which describes the company’s accountability to formulate such methods and
procedures which do not impact the society and the environment adversely. Thus an ideal
corporate governance framework assists the company to appoint an effective board and the
strengthens the relationship of the organization with its stakeholders (Galant & Cadez, 2017).
Hence, the companies listed on ASX should assimilate the Corporate Governance practices and
Corporate Social Responsibility in its constitution to enhance its growth and boost up the
confidence of its investors.

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Conclusion
Hence, to conclude, the listed companies should adopt the principles laid down by the Corporate
Governance practices and Corporate Social Responsibility in order to comply with the norms
both in letter and spirit. The corporations not only boost up their long term profits by adopting
these principles but also they enhance their market value through the transparency and disclosure
norms. By following these principles the company can balance its economic, environmental and
social growth. It can address the anticipations of the shareholders as well.
The principles of Corporate Governance practices and Corporate Social Responsibility align the
objectives of the listed entities to the aim of sustainable global development. The principles if
properly implemented by the companies can bring various competitive advantage such as
improved productivity, enhanced reputation and goodwill, better decision making processes and
risk management frameworks (EY, 2013).

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References
ACCSR (no date) What is CSR? [online]. Available from: http://accsr.com.au/what-is-csr/
[Accessed 9th February, 2018].
Adeneye, Y. B. & Ahmed, M.(2015) Corporate Social Responsibility and Company
Performance. Journal of Business Studies Quarterly. 7(1).
ASX (2014) Corporate Governance Principles and Recommendations [online]. Available from:
https://www.asx.com.au/documents/asx-compliance/cgc-principles-and-recommendations-3rd-
edn.pdf [Accessed 9th February, 2018].
ASX (2018) Corporate social responsibility[online]. Available from:
https://www.asx.com.au/about/corporate-social-responsibility.htm [Accessed 9th February, 2018].
Chai, J., Chang, P. , Wang, Z. & Brew, Y. (2015) The Public Perception of Corporate Social
Responsibility and Its Effects on Customer Behavior in China. American Journal of Industrial
and Business Management.5,pp. 611-621.
EY (2013) Corporate Social Responsibility in India[online]. Available from:
http://www.ey.com/Publication/vwLUAssets/EY-Government-and-Public-Sector-Corporate-
Social-Responsibility-in-India/$File/EY-Corporate-Social-Responsibility-in-India.pdf [Accessed
9th February, 2018].
Galant , A. & Cadez ,S. (2017) Corporate social responsibility and financial performance
relationship: a review of measurement approaches. Economic Research. 30(1),pp. 676-693.
United Nations Industrial Development Organization (2018) What is CSR? [online]. Available
from: https://www.unido.org/our-focus/advancing-economic-competitiveness/competitive-trade-
capacities-and-corporate-responsibility/corporate-social-responsibility-market-integration/what-
csr[Accessed 9th February, 2018].