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Integrating Corporate Social Responsibility in Corporate Governance Codes in the EU


Dániel Gergely Szabó


Aarhus University - Department of Law, Business and Social Sciences

Karsten Engsig Sørensen


Aarhus University - Department of Law

June 2013

European Business Law Review, Vol. 24, No. 6, 2013
Nordic & European Company Law Working Paper No. 10-28

Abstract:     
While having different starting points, corporate social responsibility (CSR) and corporate governance have developed along similar paths and today they are linked in many different ways. As a consequence of this development, CSR is becoming an integral part of corporate governance codes in the EU, and the aim of this article is to analyze the extent of this integration. It is concluded that stakeholder-related issues in particular are now part of most codes in the EU, whereas corporate governance recommendations refer less frequently to specific CSR issues. However, specific CSR recommendations are still common, so it seems that in most codes it is recognized that there is a strong link between CSR and corporate governance. Even though this link may be widely recognized, it is also clear that the existing codes show a great variety of solutions to the integration of CSR and corporate governance codes. In this area corporate governance codes differ substantially and it is clear that some codes are much more ‘progressive’ than others when it comes to CSR recommendations. It is shown that for CSR the codes mostly contain specific recommendations related to transparency and that other recommendations are less specific. The vagueness of the recommendations on CSR issues seems to be common to all the codes examined. This general vagueness makes CSR recommendations ‘soft’ and frequently open to interpretation. It is also shown that the countries whose codes are most dominant in the field of corporate governance do not seem to be at the forefront of integration of CSR in their corporate governance codes. Furthermore, an analysis of two examples of the reporting of CSR recommendations under the comply-or-explain principle shows that the adoption of this principle for CSR disclosure may not work without measures to overcome some of the shortcomings seen hitherto in the application of the comply-or-explain principle.

Number of Pages in PDF File: 49

Keywords: CSR, corporate governance codes

JEL Classification: K22

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Date posted: June 11, 2012 ; Last revised: July 12, 2013

Suggested Citation

Szabó, Dániel Gergely and Sørensen, Karsten Engsig, Integrating Corporate Social Responsibility in Corporate Governance Codes in the EU (June 2013). European Business Law Review, Vol. 24, No. 6, 2013; Nordic & European Company Law Working Paper No. 10-28. Available at SSRN: http://ssrn.com/abstract=2081611

Contact Information

Dániel Gergely Szabó
Aarhus University - Department of Law, Business and Social Sciences ( email )
Bartholins Allé 16
Building 1328, Room 328
Aarhus C, DK-8000
Denmark
Karsten Engsig Sørensen (Contact Author)
Aarhus University - Department of Law ( email )
Bartholins Allé 16, Building 1410, Room 246
DK-8000 Aarhus C
Denmark
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