Corporate Social responsibility and corporate governance
The methods of practicing corporate social responsibility have often led to diverse opinions among different groups of people. The society changes in term of expectations (Jamali & Mirshak 2007, p. The transformations within the operating environments may be used to explain the reason why firms accompany their reports with an assurance message on the commitment they have towards corporate social responsibility. Publishing assurance messages are regarded as best practices, For instance, some of the areas identified where organizations have continuously changed their strategy to practice are the area of reporting emissions. Especially in the mining sector companies are getting concerned about land reclamation, employee safety and reducing pollution. Water resource management, health, and safety of the workers and community enhanced impact through investment in health.
Randgold Resources is a mining company that carries out exploration and mining of gold mainly within Africa. Randgold resources is domiciled in the United Kingdom but primarily carries out drilling and exploration in African countries. The company recognizes that the success within the industry is anchored on specific practices such as a secure workplace, optimizing the impact to be made on the stakeholders and the commitment to long-term partnerships regarding various activities. The report touches on numerous contributions that the company formed in the lives of the citizens around the environments (Kolk & Lenfant 2009). At the mining facility within DRC Randgold resources limited sensitized the surrounding communities on the fundamental human rights concepts that were necessary for reporting (Pegg,2006 p. Other areas of Corporate Social Responsibility widely identified within the report include the provision of clean drinking water to a population of over 3 million residents within Mali near Kunda village neighboring Senegal.
In a broad summary, the areas of corporate social responsibility include the contribution to the sectors of education, community improvement, rewarding labor, local business development, and sponsorships. The evaluation of the progress in every effect is mapped according to the central sites that the company operates. The mining sites listed include Kibali, Massawa, Tongon and Morila in Africa(Pegg, 2006 p. In most scenarios, the management of the company may have changed their position on corporate social responsibility, but the city may not be in a place to identify the differences in the mode of the operations of the company. Activities of a firm are considered to be in a social contract that is expected to provide guidance on the steps made.
For instance, a scenario where mining of minerals leads to pollution or deposit of waste within the environment the business entity that is the firm is tasked with the responsibility of organizing mechanisms to take care of the same procedures. Besides mining leads to the destruction of biodiversity that needs to be protected. As much as the effects may not touch the company directly, it may lead to denial of the services that ultimately supports the firms’ productivity (Deegan & Rankin, 1996 p. The stakeholders to a firm are several, and thus for the benefits of operation, the company may be forced to sacrifice the interest of other stakeholders to those of others. For instance, as much as shareholders expect as much return as possible from their proceeds the management can cut the profits and dividends of the shareholders and invest in some social responsibility activity (Freeman & Reed, 1983, p.
The other theory that links to the explanation for corporate social responsibility among firms are the institutional theory. The approach recognizes the fact that there may be more than one firm operating within the same industry. Whenever competition manifests, economic competition for resources therefore arises. The sustainability of the firm is still evaluated concerning being able to impact the lives of those operating within the same setting. The strategy of operations of the foreign corporation within the local contexts sets the stage for implementation of mechanisms to exist within the international markets. The role of accounting and accountancy firm in wealth were deepening, and income inequality is best evaluated in the context of multinationals operating within foreign countries. Corporate social responsibility is one area of concern touched by the fact that firms may continue to make tremendous benefits at the expense of stakeholders that include the communities around the environments where production occurs (Messner, 2009 p.
According to Sikka (2015 p. 2002 p. 330) Audit multinationals such as Deloitte and KPMG are accused of professionally devising tax evasion techniques that would allow the firms to minimize costs on taxes. The trends within the United Kingdom market indicate that the companies are relying on professional tax advisory designs due to the ability to reduce costs associated with paying tasks. Firms within any city in the United Kingdom is convinced that the best tax and advisory skills lie within the professional audit firm implicated in scandals of redefining their actions in management. The liberty enjoyed by the external audit firms lies on the idea that the Sarbanes Oxley laws had little control over the possibility of creating packages that would reportedly inhibit application of the reported packages.
In the financial year of 2000, the company said a taxable income of $3. 1billion however for tax purposes the company indicated a loss of $4. 6 billion US dollars. The schemes to evade tax were too comprehensive to understand. Price water house coopers senior tax partner admits that their firm was not exempted in the tax exemption schemes. Some of the commitment areas of corporate social responsibility include understanding stakeholder views and safety within the firms’ premises. The businesses financial statement is also elaborate with few cases of malpractices. The company maintains both an internal audit committee and relies on external auditing services (reports. randgoldresources. com/report/2016). Do Australian companies report environmental news objectively? An analysis of environmental disclosures by firms prosecuted successfully by the Environmental Protection Authority.
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