Too Big to Fail, Too Big Not to Know: Financial Firms and Corporate Social Responsibility
St. John's Journal of Civil Rights & Economic Development, Vol. 25, No. 3, p. 449, 2011
34 Pages Posted: 10 Nov 2011
Date Written: January 1, 2010
This article reconsiders the debate over the role of corporate social responsibility as a governance tool to monitor the behavior of management in financial firms that have been identified by the federal government as “too big to fail.” Financial institutions deemed critical to the economy must have corporate governance processes in which board and management decision-making is not only reliable and transparent, but is also engaged in the utmost rigor in assessing profitability and economic viability in financial markets and the communities in which they complete. Part one of this article explores the link between products sold by Wall Street financial firms and broader societal harm, particularly to local communities. Part two explores the efficacy debate over corporate social responsibility’s role in corporate governance. Part three calls for a concise definition of corporate social responsibility for financial firms deemed critical to the U.S. economy. The article concludes by recommending a corporate social responsibility definition for “too big to fail” financial firms and by suggesting mandatory compliance via disclosure. It argues for improved disclosure of corporate social responsibility accounting.
Keywords: Banking, finances, federal government, economy, stress test, too big to fail, CSR, SEC, regulations, financial market, Wall Street, corporate social responsibility
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