Abstract

This paper seeks to provide a thorough understanding of Corporate Governance, Corporate Social Responsibility, and its relationship. Corporate governance simply refers to keeping an equilibrium between fiscal and social goals, as well as between personal and community goals. The framework of Corporate Governance is in place to push for parsimonious measures and to hold corporations to account for their actions, which is also one of the prime functions of Corporate Social Responsibility. Thus, the paper aims to provide a framework for understanding the association between Corporate Social Responsibility and good Corporate Governance. Initially, the theories and models of Corporate Governance for the working of businesses is explained. Furthermore, Corporate Governance examined with respect to how the Board of Directors, and the other managerial personnel of a company treats the shareholders and other parties of interest, or how well it fulfils or neglects to fulfil their expectations – that is its significance and drawbacks. Next, it elaborates on the theory of Corporate Social Responsibility. The understanding of Corporate Social Responsibility or CSR is represented as self-regulatory corporate strategy that encourages companies to fulfil their social responsibilities to their members, consumers, and the society at large. Companies can be aware of the economic, social, political, and environmental impacts they have on society when they engage in Corporate Social Responsibility, which is also known alternatively known as “Corporate Citizenship”. Considering this, the study also considers the concept’s principles, theories, advantages as well as disadvantages. Finally, the paper’s goal is to illustrate the connection between Corporate Governance and Corporate Social Responsibility, highlighting its significance, challenges, and future potential for development in this area.

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