Moving from growth to responsible development. The role of Corporate Governance and Corporate Social Responsibility

Is a market-based model of corporate governance feasible for developing countries? The answer to this question can be complex. First, developing countries lack most of the formal and informal institutions that make workable a market-based corporate governance system characterized by an effective corporate law. Quite often developing countries lack the advanced markets that are essential for a market-based governance system to work. Second, private ordering is not easy. Successful private ordering depends on a variety of important preconditions that, for the most part, do not exist in developing economies. Corporate social responsibility is a concept with a growing currency within the globe. CSR is a concept that frequently overlaps with similar approaches such as corporate sustainability, corporate sustainable development, corporate responsibility, and corporate citizenship. While CSR does not have a universal definition, many see it as the private sector’s way of integrating the economic, social, and environmental imperatives of their activities. CSR closely resembles the business pursuit of sustainable development. CSR frequently involves creating innovative and proactive solutions to social and environmental challenges, as well as collaborating with both internal and external stakeholders to improve firm performance. This paper analyses which role an integrated system of corporate governance and corporate social responsibility can play in helping some countries to pursue an effective development.