Corporate Social Responsibility in Modern Business Practices

The research delves into the importance of Corporate Social Responsibility (CSR) in modern businesses, highlighting its role in promoting sustainable development, enhancing corporate reputations, and ensuring long-term profitability. By analyzing various case studies, including the European Union's approach to CSR and specific company examples like Westland plc, it evaluates how CSR initiatives can be effectively implemented to align with business goals while addressing environmental, social, and governance challenges. The paper also reviews existing literature on CSR theories and frameworks, discussing their application in different industries. Furthermore, it considers the impact of regulatory requirements and public expectations on shaping CSR strategies. Finally, the research proposes actionable recommendations for businesses looking to strengthen their commitment to CSR, emphasizing the need for transparency, stakeholder engagement, and continuous improvement.

International Corporate Law & Governance

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
1. Stating the legal rights of the shareholders to take action against the organisation................1
2. Presenting the differences in the UK rules as compared to the other three countries like US,
Germany and Japan......................................................................................................................3
3. Stating the key features of CSR in the context of Westland and presenting the actions of
management for making its socially responsible.........................................................................8
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
International corporate governance deals with system of rules and practices followed in
the organisation at global level. In this report, international business law and corporate
governance of Westlands Group PLC will be discussed on the basis of issues faced by
organisation. The company known for the activities like manufacturing equipment, helicopters,
aerospace structure and system. The report will assist the business to identify the validity of legal
actions taken by its minority shareholders. In addition, the corporate governance of US, Germany
and Japan will be discussed as organisation is expanding its business globally. Roles and
responsibility of board of directors, requirement for independent auditing and rules for setting
executive remuneration will be evaluated in this context. The key features of social responsibility
(CSR) will be identified in order to avail the fund from European Union for the development of
organisation.
1. Stating the legal rights of the shareholders to take action against the organisation.
The Westlands Group PLC sold its chemical engineering business to the Chinese
company as the organisation was facing some issues. The minority shareholders in the
organisation felt that company is making a big mistake and suffering a loss as a result of it.
Those shareholders hold some 15% of issued share capital of the company claiming that board
react carelessly and threatening for legal action against the board. Minority shareholders also
seeking the proposal of no confidence in the board, in the next annual general meeting (AGM),
that may harm the image and goodwill of the organisation in the market(Koutsias, 2017). On the
basis of this aspect, minority shareholders and their various rights will be identifiedin order to
support the argument and validity of their legal action and whether the board can prevent no
confidence resolution in next meeting will be discussed.
The Chinese company purchase the chemical engineering unit of Westlands Engineering
PLC. It is a legal process and a part of organisational growth strategies where the company sells
its unit in order to increase its market share, capital, technological developments, etc. The selling

of business unit affects its shareholders and stakeholders as they are directly and indirectly
related with the organisation. It is the responsibility of the board to inform the shareholders
regarding selling of the business unit. If board does not fulfil the responsibility then shareholders
have right to take legal action against the board. Shareholders possess various rights to defend
their and company's interest.
Minority Shareholders- A shareholder who owns less than half of the organisation shares
are considered as minority shareholders. They are provided with some benefits and various rights
to defend their as well as organisation’s interests. The benefits in terms of dividends provided to
shareholders are volatile and depend upon the stock price of the organisation. Westlands Group
PLC has many shareholders and stakeholders which influence the business of the organisation.
Shareholders are not allowed in most decisions, but they possess some rights which shows the
corporation's charter and laws (Wang and Lahr, 2017). Minority shareholders can take legal
action against the board if their rights are treated in unfair and wrongful manner. Various rights
of minority shareholder are basic and common. They are provided below:
1. Voting Rights- The minority shareholder possess the voting right and can elect the board
of directors and can make proposal for basic changes affecting the organisation such as
acquisition and mergers. Activities in relation to election and voting takes place in annual
general meeting of the company.
2. Possessions in part of Organisation assets- In process of company's liquidation the
debenture holders and majority shareholders are first paid. But in case of acquisition,
minority shareholders own a part of business asset which pertains value. They can claim
on the part of that asset which is owned by organisation (Barker, 2016).As those
assetsenable them to earn profits, which they can reinvest in additional asset.
3. Transfer of Ownership- Minority shareholder possess the right to transfer of ownership in
case of liquidation of organisation. Though they show lack of interest in transferring
ownership but stock exchange provides liquidity which is very important to the
shareholders (Deakin and et.al., 2017). Liquidity is one of ace factors that differentiates
shares from an investment for example, transfer of shares invested in real state.
4. Right to claim dividends- With claim on organisational asset, minority shareholders
possess the right to claim on the profits of the company in the form of dividends (Pozen,
Nallareddy and Rajgopal, 2017). It is based on the both the board and shareholders

decision whether they want the profit or want to reinvest for the growth of the
organisation.
5. Right to Object- Right to object to a variation of the category rights of shares heldby a
shareholder owning 15% of the company's share. They can also pass and object on
special resolution if the 75% of shareholders vote in favour of it.
6. Right to check books and records- It is important for the organisation like Westlands to
provide the right to check financial books and figures, including annual report to minority
shareholders. Thus, if shareholder doesn't feel right about the financial or any other
segment, they can check the books and records of the organisation to clear theirdoubts.
In accordance with the above rights it can be seen that minority shareholders do possess the
right to sue or take legal action against Westlands group. If the majority of shareholders are in
favour and support with minority shareholders, they can take legal action to safeguard their as
well as organisation interest.
2. Presenting the differences in the UK rules as compared to the other three countries like US,
Germany and Japan
In accordance with the given case situation, for attaining benefits Westlands want to
expand business in the countries like Germany, US and Japan. In all such respective countries,
financial auditing requirements as well as roles and responsibilities of BOD are highly varied in
the following manner. Thus, Westlands need to keep in mind all such aspects while developing
policies to expand business internationally.
Roles and responsibilities of the Board of directors
US
Role: As per the US law, BOD’s team plays a vital role in governing the organizations to the set policies and
objectives. Along with this, role of BOD’s in the US companies are highly significant in relation to the approval of
budget, fixing salaries, compensation and benefits of senior management (Rao and Tilt, 2016).
Responsibilities
 In accordance with US corporate law, BOD has right to access the board information and thereby
undertakes suitable action that contributes in the firm’s success.
 BOD has right to appoint special committee for the purpose of legal advice which in turn helps them in
reducing the impact of danger (Thomson, 2017).
Germany

Roles and responsibilities:
 External liability: In Germany, BOD team has responsibility to protect the interest of external parties such
as Creditors, shareholders, contracting authorities etc. Further, directors also owed liabilities towards the
third parties. For instance: On the basis of German Tax code, MD of the business unit is personally liable
for relevant taxes.
 Duty of care: According to the duty of care, members of the board require to manage the best interest of
company. Thus, it can be stated that it is the accountability of BOD to keep in mind the interest of all
stakeholders such as creditors, employees, customers, society when taking decision (Corporate governance
and directors' duties in Germany: overview. 2017).
 Duty of loyalty: On the basis of such duty, BOD requires to safeguard the interest of company. In
Germany, activities like self-contracting and multiple representations are prohibited. Along with this, such
duty also lays high level of emphasis on maintaining confidentiality regarding business matters and secrets.
Japan
Roles and responsibilities: Companies Act of Japan entails that it is the responsibility of BOD to comply
with the duty of care and loyalty. Along with this, directors are also liable to distribute surplus dividend among the
shareholders when specific amount exceeded (Corporate governance and directors' duties in Japan: overview,
2017).
UK
Role: In business unit, main role of directors is to attend meeting and thereby takes suitable decision that
ensures fulfillment of all the company’s obligation.
Duties of responsibilities: As per the Companies Act, 2006 general duties of directors are enumerated below:
 It is the responsibility of BOD to act within the power offered or presented by the company’s constitution.
 Company’s success promotion and exercising independent judgment is another main duty of the BOD of
UK companies (Corporate governance and directors' duties in the UK: overview, 2017).
 Exercising reasonable care, skill and diligence as well as avoidance of interest conflicts is the responsibility
of BOD’s team.
Differences: From assessment, it has been identified that there is no significant difference in roles as well
as responsibilities of the BOD’s of country like UK, US, Japan and Germany. Laws of every country lay high level
of emphasis on fulfilling the obligations like duty of care and loyalty. The only difference is that Companies Act of
UK contains several responsibilities of BOD’s pertaining to independent judgment, skill, diligence etc. over others.
Requirements for independent auditing of the company’s financial position
UK US Japan Germany
Corporate
governance code of
UK is applicable on
all the companies
US laws entail that
every non-federal
entity whose
financial award is
Japanese companies
have to conduct two
separate statutory audit
on the basis of
German commercial
code clearly entails
that both large and
medium sized firms

including Westlands
whose shares are
listed on London
stock exchange.
Section C.3 of EU
regulations is highly
related to the
auditors and audit
committee.
equal to or greater
than $300000.
following laws:
 Financial
instruments
and exchange
Act
 Companies Act
are entitled to
conduct audit via an
independent auditor.
On the basis of law
auditor, registered
with the chamber of
public accountants in
Germany, needs to
analyze whether
financial statements
prepared by the firm
are in line with
GAAP or not
(Auditing
requirements for
Germany, 2012).
In the case of
independent
auditing, FTSE
companies namely
Westlands Plc are
required to present
the way of fulfilling
audit composition
requirements.
Amount considered
for the purpose of
audit may also be
the one that is
included by the
directors in the
subsection (a) (3) of
concerned fiscal
year.
It is highly required for
the companies to
conduct audit as per the
Companies act when
paid-up capital is 500
and liabilities account
for 20 million yen or
more (Statutory
requirements for
Japanese companies,
2017).
With the motive to
fulfill the information
needs of stakeholders
audit is conducted.
For the presentation
of fair view of
financial information
an independent
auditor is appointed
through shareholders
resolution.
Requirement for
audit is necessary
when:

 Sales revenue
(EURM):
>38.50
 Total assets
(EURM):
>19.25
 Staff
headcount:
>250
Differences in the rules for setting executive remunerations in the context of different countries are enumerated
below:
UK US Japan Germany
According to UK
law, Executive
remuneration
working group, an
independent panel
sets down
compensation
(Corporate
governance and
directors' duties in
the UK: overview,
2017).
In such country,
remuneration of
executives is
determined by the
board compensation
or corporate
governance
committee.
In order to determine
executives
remuneration there is
requirement to pass
ordinary resolution
through shareholders
meeting. Majority of
the aggregate
remuneration of the
directors are
determined through
such process
(Corporate
governance and
directors' duties in
Japan: overview,
2017).
Under such country,
supervisory board
determines the
remuneration of
executive’s team.

For the disclosure
purpose, UK
companies are
required to comply
with Director’s
Remuneration
Reporting
Regulations 2013.
Compensation of
executives may be in
the form of cash,
shares, options and
derivatives. Along
with this, when
companies plan to
give compensation in
the form of equity
then approval from
the shareholders. On
the other side, in the
case of cash
compensation there is
no requirement to
take permission.
Companies working
in Japan are required
disclosethe total
amounts of
remuneration and
breakdown of
payments in the form
of salary, bonus,
stock, options etc.
Shareholders’
approval is required
when stocks are
given to directors in
the form of
compensation.
In Germany,
remuneration granted
to the member of
BOD must be
disclosed in the
annual financial
reports.
It can be stated that requirements in relation to the auditing of company’s financial position are similar in the
all four countries considered for the study.
3. Stating the key features of CSR in the context of Westland and presenting the actions of
management for making its socially responsible
Corporate social responsibility (CSR) implies for the integration which takes place
between the socially beneficial program and model as well as culture of business unit. In the
recent times, CSR strategy is highly significant that helps in generating higher profit and creates
positive attention. By performing CSR, Westlands can build and maintain positive reputation in
the mind of stakeholders such as investors, suppliers, creditors etc. Along with this, through the
means of CSR, Westlands would be able to prevent financial ramifications and can enhance the
employee loyalty to a great extent. Thus, model of CSR can be presented as an extended version
of corporate governance which is based on fiduciary duties. CSR offers opportunity to the

business unit in relation to placing positive impact on society. Dimensions of CSR can be
distinguished into four parts namely ethical, legal, economic and discretionary.
On the basis of cited case situation, EU focuses on offering financial assistance to the
companies which have sound record of CSR. In other words, EU providesfunding to the
companies which are involved in the activities that contributes in welfare of others. Hence, main
features of CSR are enumerated below:
 Education: Business unit can perform CSR by offering financial assistance to the
educational units. Thus, by conducting several educational programs and placing
emphasis on infrastructural development Westlands can perform CSR.
 Health care: In the recent times, several chronic diseases like HIV etc came intoforce
appearance. In this regard, by making both financial and non-financial contribution in
hospitals, firm can perform CSR (Nizamidou and Vouzas, 2017).
 In addition to this, rural electrification and women empowerment are the main aspects of
CSR that can be undertaken by the companies to create distinct image.
 CSR lays high level of emphasis on reducing the emission of greenhouse gases and
environmental pollution. It is the main aspects of CSR because it provides people of
society with the pollution free environment. Along with this, activities of an engineering
company may be a major cause of waste generation which in turn places direct impact on
green environment. Hence, by making effectual arrangements regarding such aspect
Westlands can contribute in CSR.
 Employee’s satisfaction and motivation: Employees are the main stakeholders of an
organization. In this regard, it is the accountability of firm to resolve all the queries of
personnel and meet their expectation level (Smith and et.al., 2016). Thus, by fulfilling all
the obligations towards employees firm can do CSR and thereby would beable to build
distinct image in the mind of others.
As per the cited case, management team of Westland is required to take several initiatives
that reflect it as socially responsible are as follows:
 Compliance with the laws and legislation: Westlands management team is needed to ensure
all the laws such as labor, equal opportunity, discrimination Act etc. have been considered.
On the basis of such aspect, by offering equal opportunity to the personnel business unit can

build distinct image in the mind of employees. Moreover, employees prefer to stay in the
organization that do not discriminate their employees on the basis of age, race, gender etc.
Along with this, by complying with the health and safety laws firm can offer high protection
to the personnel. In this, by fulfilling responsibilities regarding such aspect firm can build
sound image and would become able to take benefits of EU funding.
 Organizing health campaigns: By organizing health campaigns regarding the chronic
diseases, Westlands can develop awareness among the people regarding safety aspects.
Along with this, by donating equipment to the health care institutions, firm can also make
contribution in the welfare of others.
 Employment of high –tech equipment: In the present times, concern towards the scarce
resources hasincreased significantly. Thus, by developing sound strategies and using high-
tech equipment Westlands can save energy and water. Besides this, by making sound
arrangements regarding the waste management firm can contribute in the sustainable
environment. Thus, by emphasizing on such aspect business organization can fulfill the
obligation towards the society.
 Training and development session for personnel: Business organization can develop high
level of satisfaction among the personnel through conducting training & development
session(Park and et.al., 2016). Moreover, now individuals have desire to learn things that aid
in their knowledge, growth and career aspect. Thus, by undertaking such measure firm can
meet its responsibility towards the personnel to a great extent.
 Contribution in educational institutions: Westlands can also exhibit the example of socially
responsible aspect by offering scholarships to the deserving candidates. This in turn helps
individual in making their career highly advanced.
Hence, by undertaking all the above depicted measures Westlands would be able to develop
an effectual record of CSR. Hence, by presenting such record business unit would get financial
support from EU. Moreover, EU prefers to give loan, at negligible rate, to the companies that
works for the welfare of society.
CONCLUSION
From the above report, it has been concluded that it is the accountability of the board of
Directors of Westlands to provide information to the shareholders about the selling of a part of

business unit. It can be seen in the report that minority shareholders possess right in relation to
taking legal actions for safeguarding the company’s as well as their own interest. Besides this, it
can be inferred that UK rules regarding to roles and responsibilities of board of directors are
highly in line with the other countries such as US, Germany and Japan. Further, it has been
articulated that in the Companies Act of UK detailed rules are mentioned, about the
accountability of board of directors. It can be summarized from the reports that in different
countries like UK, US, Germany and Japan varied authorities set the remuneration of executives.
It can be presented from the report that by taking initiatives for the welfare of others Westlands
can convince EU for the financial support.