Corporate Social Responsibility in the Ghanaian Context

Globally, corporate social responsibility (CSR) is perceived as an important vehicle for building a brand or reputation. Given the link between profitability and reputation, it is expected that CSR will drive profitability up. It is within this context that firms operating in Ghana carry out their CSR initiatives. In Ghana, CSR initiatives are essentially viewed as the strategic decisions taken by organizations to voluntarily tackle the social conditions which have the potential of hampering the accomplishment of their corporate goals. Thus, CSR constitutes non-governmental interventions for addressing some of the developmental challenges that the country faces. Principally, most CSR initiatives, in terms of frequency and magnitude of social investments, are performed by the telecommunication companies, banking institutions, and companies in the extractive industries such as mining and oil and gas. Firms that engage in CSR initiatives in Ghana tend to be foreign-owned. Owing to the current developmental issues, CSR initiatives tend to focus on education, health, environment, social entrepreneurship, and sports development. Thus, visible CSR initiatives can be found in education, mining communities, sports, and coastal communities near the offshore oil and gas production facilities. However, there is paucity of empirical evidence on the relationship between CSR and corporate financial performance in the Ghanaian context.