Recently, the business entity is primarily demanded to abide norms of social responsibility in their pursuit of profit. This emphasis on the character of transnational business conduct is a departure from the entrenched metaphor that sees corporations as a moral profit machines, utterly devoid of moral character or probity.
Some say it is futile to attempt an operational definition of CSR because there are too many conceivable applications of CSR. But, broadly stated, CSR merely implies that businesses share responsibility
for societal conditions. A firm has an economic responsibility to provide goods and services, offer employment at a living wage, and generate profits to survive. Through these obligations, firms enhance societal well-being.
In addition, CSR signifies conformity to society's expectations of appropriate business behavior such as honoring unwritten ethical standards.
The emergence of CSR poses a challenge to a corporate governance framework centered on shareholder value creation. The rise of CSR has engendered a debate about the ultimate purpose and essential nature of a business corporation. The competing visions expose conflicting political and moral preferences regarding the corporation's nature.
In this aspect, This responsibility can assume many forms and may extend to consumers, employees, stockholders, suppliers, and other stakeholders.
The crisis of the financial system around the world provides an opportunity to rethink the basic structures under which our economic system has long functioned. The greed and dysfunction revealed by recent events shows that current models are far from perfect. While not advocating a radical overthrow of the existing system, perhaps we can take this opportunity to expand our universe and allow for the explicit recognition and creation of businesses that aim to address social problems. Broadening our understanding of the role corporations can play and the goals to which they should aspire will allow us to return the social aspect and to harness the power of capitalism to actively advance social good.
With this view, this paper examines how CSR can be defined first. With examining this, it finds there is no unique definition can explain CSR efficiently.
This paper mainly discuss how CSR would be accepted as a legal regime and combined social welfare and corporation's profit. In this respect, this thesis insists to reinforce the disclosure system of the Financial Investment Services and Capital Markets Act and internal compliance system for protecting the investors and the consumers.
It also argues that social responsible investment regime and the role of the institutional investor should be pervasive. These are available to make the director run it's business more socially.
This thesis suggests that the liabilities of director under the Korean Commercial Code are too strict to manage the business socially and should introduce the business judgment rule and try to amend the Commercial Code to director's monetary liability.
The truth is that boards are now enabled to embrace a new era which realizes CSR has been created to Quantify the financial impact of social business decisions, thus proving that social and financial returns can coexist. Furthermore, where social impact can be Quantified with respect to shareholder profit.