Driving Corporate Social Responsibility (CSR) through the Companies Act: an Overview of the Role of the Social and Ethics Committee

Authors

DOI:

https://doi.org/10.17159/1727-3781/2013/v16i1a2307

Keywords:

Corporate Social Responsibility, social and ethics committee, Companies Regulations 2011

Abstract

The corporate social responsibility (CSR) movement can be described as a bundle of trends comprising regulatory frameworks aimed at improving corporate practices and leading to changes in these practices, the mobilisation of corporate role players to support the development of states, and a management trend the purpose of which is to enhance the legitimacy of a business. Government is regarded as one of the most important driving forces behind the CSR agenda and it has a particularly important role to play in the creation of an enabling CSR environment.

 

In general, advocates of legislative involvement in framing the CSR policy highlight the failure of existing voluntary systems as one of the main reasons why the state should play a more important role in the facilitation of CSR. Although governments realise the importance of encouraging socially responsible business, it should be noted that CSR should not replace regulation or legislation concerning social rights. Furthermore CSR should not be seen as shifting (or outsourcing) the state's responsibility for the provision of basic services (such as education or the provision of health services) to the private sector and thus "privatising" the state's responsibilities. However, the legacies of apartheid remain firmly entrenched in the social problems facing South Africa and it seems as if the Government is unable to deliver the social and physical infrastructure required to effect the desired transformation, thus necessitating the engagement of the private sector.

 

The role of Government in establishing a CSR policy framework and driving CSR has become increasingly important. The (perceived) failure of the welfare state has given further impetus to the move of governments toward tapping into the resources of the private sector (through their CSR) in order to address socio-economic challenges.

 

A purely voluntary approach to CSR without any legislative intervention will not succeed – a clear public policy requiring the implementation of socially responsible practices by the entire private sector is a necessity. Governments in general are increasingly beginning to view CSR as cost-effective means to enhance their sustainable development strategies, and as a part of their national competitiveness strategies to attract foreign direct investment. Given South Africa's history, legislation should be viewed as one of the main instruments enabling the Government to address the private sector's social, environmental and economic outreach activities.

Against this background, this contribution identifies the regulations released in terms of the Companies Act 71 of 2008 in which the issue of the social and ethics committee is dealt with, as an important measure taken by Government to create a possible CSR platform. This contribution argues that the requirements regarding the creation of a social and ethics committee have the potential to embed the CSR notion in the corporate conscience. The aim of the contribution is to provide an overview of the role of the social and ethics committee, as envisaged by the Companies Regulations, 2011, as a potential driver of CSR.

   ScienceOpen_Log0343271.png

Downloads

Download data is not yet available.

References

Bibliography

Auger et al 2003 Journal of Business Ethics

Auger P et al "What will consumers pay for social product features?" 2003 Journal of Business Ethics 281-304

Bekink 2008 SA Merc LJ

Bekink M "An historical overview of the director’s duty of care and skill: From the nineteenth century to the Companies Bill of 2007" 2008 SA Merc LJ 95-116

Boraine and Calitz 2010 TSAR

Boraine A and Calitz J "Some consequences of the National Credit Act 34 of 2005 on the proof of claims in insolvency law" 2010 TSAR 797-807

Boraine and Van Heerden 2010 PER

Boraine A and Van Heerden C "To sequestrate or not to sequestrate in view of the National Credit Act 34 of 2005: a tale of two judgements" 2010 PER 83-124

Bouwman 2009 SA Merc LJ

Bouwman N "An appraisal of the modification of the director’s duty of care and skill" 2009 SA Merc LJ 509-534

Buhmann 2006 Corporate Governance

Buhmann K "Corporate Social Responsibility: What role for law? Some aspects of law and CSR" 2006 Corporate Governance 186-202

Cassim Contemporary Company Law

Cassim F (ed) Contemporary Company Law (Juta Cape Town 2011)

Cassim Practitioner’s Guide

Cassim F The Practitioner’s Guide to the Companies Act 71 of 2008 (Juta Cape Town 2011)

Castka et al 2004 TQM Magazine

Castka P et al "Integrating corporate social responsibility (CSR) into ISO management systems – in search of a feasible CSR management system framework" 2004 TQM Magazine 216-224

Crane et al Oxford Handbook

Crane A et al (eds) The Oxford Handbook of Corporate Social Responsibility (Oxford University Press Oxford 2008)

De Villiers 2010 PER

De Villiers D "National Credit Regulator versus Nedbank Ltd and the practice of debt counselling in South Africa" 2010 PER 128-204

DiMaggio and Powel 1983 American Sociological Review

DiMaggio P and Powel W "The iron cage revisited: Institutional isomorphism and collective rationality in organization fields" 1983 American Sociological Review 147-160

Fritsch 2008 Global Society

Fritsch S "The UN Global Compact and the global governance of Corporate Social Responsibility: Complex multilateralism for a more human globalisation?" 2008 (22) Global Society 1-26

Galbreath 2009 European Business Review

Galbreath J "Building corporate social responsibility into strategy" 2009 European Business Review 109-127

Gouws 2010 SA Merc LJ

Gouws M "A consumer’s right to disclosure and information: comments on the plain language provisions of the Consumer Protection Act" 2010 SA Merc LJ 79-94

Gqubule "True Meaning of BEE"

Gqubule D "The True Meaning of BEE" in Gqubule D (ed) Making Mistakes, Righting Wrongs – Insights into Black Economic Empowerment (Jonathan Ball Cape Town 2006) 1-39

GRI Indicator Protocols

Global Reporting Initiative Indicator Protocols Set Labour Practices: LA (GRI Amsterdam 2006)

GRI Sustainability Reporting Guidelines

Global Reporting Initiative Sustainability Reporting Guidelines Version 3.0 (GRI Amsterdam 2006)

Hamann, Khagram and Rohan 2008 Journal of Southern African Studies

Hamann R, Khagram S and Rohan S "South Africa’s charter approach to post-apartheid economic transformation: Collaborative governance or hardball bargaining?" 2008 Journal of Southern African Studies 21-37

Institute of Directors King Report II

Institute of Directors in Southern Africa King Report on Governance for South Africa – 2002 (IoD Parklands 2002)

Institute of Directors King Report III

Institute of Directors in Southern Africa King Report on Governance for South Africa – 2009 (IoD Parklands 2009)

Isakson and Steimle 2009 TQM Journal

Isakson R and Steimle U "What does GRI-reporting tell us about corporate sustainability?" 2009 TQM Journal 168-181

ISO Guidance on Social Responsibility

International Standards Organisation Guidance on Social Responsibility (ISO Geneva 2010)

Jack Broad-Based BEE

Jack V Broad-Based BEE – The Complete Guide (Frontrunner Northcliff 2007)

Jacobs, Stoop and Van Niekerk 2010 PER

Jacobs W, Stoop P and Van Niekerk R "Fundamental consumer rights under the Consumer Protection Act 68 of 2008: a critical overview and analysis" 2010 PER 301-406

Janse van Rensburg Constitutional Framework

Janse van Rensburg A The Constitutional Framework for Broad-based Black Economic Empowerment (LLD-thesis UFS 2010)

Juta’s Statutes Editors National Credit Act

Juta’s Statutes Editors The National Credit Act 34 of 2005 and Regulations (Juta Cape Town 2008)

Klein and Dawar 2004 Journal of Research in Marketing

Klein J and Dawar N "Corporate Social Responsibility and consumers’ attributions and brand evaluations in a product-harm crisis" 2004 Journal of Research in Marketing 203-217

Kloppers 2006 TSAR

Kloppers H "Enkele lesse vir trustees uit die Parker-beslissing" 2006 TSAR 414-423

Kloppers Improving Land Reform

Kloppers HJ Improving Land Reform through CSR: A Legal Framework Analysis (LLD-thesis NWU 2012)

Loubser (Part 1) 2010 TSAR

Loubser A "The business rescue proceedings in the Companies Act of 2008: concerns and questions (Part 1)" 2010 TSAR 501-514

Loubser (Part 2) 2010 TSAR

Loubser A "The business rescue proceedings in the Companies Act of 2008: concerns and questions (Part 2)" 2010 TSAR 689-701

Marx and Van der Watt 2011 Journal for New Generation Science

Marx B and Van der Watt A "Sustainability and integrated reporting: an analysis of the audit committee’s oversight role" 2011 Journal for New Generation Science 56-71

Meiring 2010 Without Prejudice

Meiring I "Consequences of non-compliance with the Consumer Protection Act 68 of 2008: consumer law" 2010 (10) Without Prejudice 28-29

Melville Consumer Protection Act

Melville N The Consumer Protection Act Made Easy (Book of Life Pretoria 2010)

Melville Know Your Consumer Rights

Melville N Know Your Consumer Rights: Pocket Guide to the Consumer Protection Act (Book of Life Pretoria 2010)

Naude 2009 SALJ

Naude T "The consumer’s ‘right to fair, reasonable and just terms’ under the new Consumer Protection Act in comparative perspective" 2009 SALJ 505-536

Naude 2010 SALJ

Naude T "Enforcement procedures in respect of the consumer’s right to fair, reasonable and just contract terms under the Consumer Protection Act in comparative perspective" 2010 SALJ 515-547

Nielsen and Thomsen 2007 Corporate Communications

Nielsen A and Thomsen M "Reporting CSR – What and how to say it?" 2007 (12) Corporate Communications: An International Journal 25-40

Otto National Credit Act Explained

Otto J National Credit Act Explained (LexisNexis Durban 2010)

Painter-Morland 2006 Business Ethics

Painter-Morland M "Triple bottom-line reporting as social grammar: integrating corporate social responsibility and corporate codes of conduct" 2006 Business Ethics: A European Review 352-364

Pitts Corporate Social Responsibility

Pitts C (ed) Corporate Social Responsibility – A Legal Analysis (LexisNexis Markham, Ont 2009)

Roestof 2009 Obiter

Roestof M "Enforcement of a credit agreement where the consumer has applied for debt review in terms of the National Credit Act 34 of 2005" 2009 Obiter 430-437

Roestof 2010 Obiter

Roestof M "Termination of debt review in terms of section 86(10) of the National Credit Act and the right of a credit provider to enforce its claim" 2010 Obiter 782-792

Roestof et al 2009 PER

Roestof M et al "The debt counselling process – closing the loopholes in the National Credit act 34 of 2005" 2009 (12) PER 246-306

Rossouw 2005 Business & Society

Rossouw GJ "Business ethics and corporate governance in Africa" 2005 Business & Society 94-106

Runhaar and Lafferty 2009 Journal of Business Ethics

Runhaar H and Lafferty L "Governing Corporate Social Responsibility: An assessment of the contribution of the UN Global Compact to CSR strategies in the telecommunications industry" 2009 Journal of Business Ethics 479-495

Rushworth 2010 Acta Juridica

Rushworth J "A critical analyses of the business rescue regime in the Companies Act 71 of 2008" 2010 Acta Juridica 375-408

Tait and Tait 2010 Obiter

Tait M and Tait M "Equality, the Consumer Protection Act and customer-segment pricing strategies: Is there relief for the poor rich tourist?" 2010 Obiter 434-445

Utting 2003 Global Future

Utting P "Promoting development through Corporate Social Responsibility – Does it work?" 2003 (Third Quarter) Global Future 11-13

Van der Linde 2009 TSAR

Van der Linde K "The solvency and liquidity approach in the Companies Act 2008" 2009 TSAR 224-240

Van Eeden Guide to the Consumer Protection Act

Van Eeden E A Guide to the Consumer Protection Act (LexisNexis Durban 2009)

Van Heerden and Boraine 2009 PER

Van Heerden C and Boraine A "The interaction between the debt relief measures in the National Credit Act 34 of 2005 and aspects of insolvency law" 2009 PER 22-161

Weaver, Trevino and Cochran 1999 Academy of Management Journal

Weaver G, Trevino L and Cochran P "Integrated and decoupled corporate social performance: Management commitments, external pressures, and corporate ethics practices" 1999 Academy of Management Journal 539-552

White 2006 BSR Occasional Papers

White A "The stakeholder fiduciary: CSR, governance and the future of boards" 2006 BSR Occasional Papers 4

Wood 1991 Academy of Management Review

Wood D "Corporate social performance revisited" 1991 Academy of Management Review 691-718

Register of case law

Land and Agricultural Bank of South Africa v Parker 2005 2 SA 77 (SCA)

Minister of Water Affairs and Forestry v Stilfontein Gold Mining Company 2006 5 SA 333 (W)

Register of legislation

Broad-Based Black Economic Empowerment Act 53 of 2003

Companies Act 61 of 1973

Companies Act 71 of 2008

Consumer Protection Act 68 of 2008

Employment Equity Act 55 of 1998

National Credit Act 34 of 2005

National Environmental Management Act 107 of 1998

National Environmental Management: Air Quality Management Act 39 of 2004

National Environmental Management: Biodiversity Act 10 of 2004

National Environmental Management: Protected Areas Act 57 of 2003

National Environmental Management: Waste Act 59 of 2008

National Water Act 36 of 1998

Occupational Health and Safety Act 85 of 1993

Skills Development Act 97 of 1998

Register of government publications

GN R351 in GG 34239 of 26 April 2011 (Companies Regulations, 2011)

Register of internet sources

ILO Date unknown http://bit.ly/13TyoQD

International Labour Organisation Date unknown Decent Work Agenda http://bit.ly/13TyoQD [date of use 6 Jun 2011]

India 2011 http://bit.ly/10SVRRh

India 2011 Companies Bill, 2011 http://bit.ly/10SVRRh [date of use 6 Jun 2011]

Institute of Directors 2010 http://bit.ly/16v9xCx

Institute of Directors of Southern Africa 2010 Practice Note on Broad-Based Black Economic Empowerment and King III http://bit.ly/16v9xCx [date of use 6 Jun 2011]

OECD 2009 http://bit.ly/10SZrLh

OECD 2009 Recommendation for Further Combating Bribery of Foreign Public Officials in International Business Transactions http://bit.ly/10SZrLh [date of use 6 Jun 2011]

OECD 2011 http://bit.ly/YbXVAI

OECD 2011 Convention on Combating Bribery of Foreign Public Officials in International Business Transactions http://bit.ly/YbXVAI [date of use 6 Jun 2011]

OECD Date unknown http://bit.ly/ZrccIg

OECD Date unknown Guidelines for Multi-National Enterprises http://bit.ly/ZrccIg [date of use 6 Jun 2011]

UN 2004 http://bit.ly/13YAEpX

United Nations 2004 Convention against Corruption http://bit.ly/13YAEpX [date of use 6 Jun 2011]

Published

26-04-2017

Issue

Section

Articles

How to Cite

Kloppers, H. J. (2017). Driving Corporate Social Responsibility (CSR) through the Companies Act: an Overview of the Role of the Social and Ethics Committee. Potchefstroom Electronic Law Journal, 16(1), 165-199. https://doi.org/10.17159/1727-3781/2013/v16i1a2307

Similar Articles

1-10 of 1065

You may also start an advanced similarity search for this article.