Developing Corporate Governance with CSR

The complexity of corporate governance and the need to consider a set of various economic, social, legal, historical and cultural determinants lead to the development of different research perspectives. Despite the multi-theme approaches the concept of shareholder value, the fundamental assumption of principal-agent theory, appeared to become the paradigm for research of the efficiency of corporate governance mechanisms and evolution and gave rise to many regulations or best practice. In result, the proponents of corporate social responsibility and the broader role of the company in the economy seemed to loose in the conceptual debate. Yet, however the devastating impact of the crisis and the growing companies’ and stakeholders’ interests in CSR programs lead to the paradigm shift. Corporate governance inefficiencies identified with the outbreak of the financial crisis cast doubt not only on the effectiveness of the shareholder value approach, but also on many practices adopted in the areas of board work, executive compensation, performance evaluation and transparency. The development of the CSR concept contributed to the understanding of the company role in economy and society and exerted significant impact on theoretical framework and practice of corporate governance. The influence of CSR on corporate governance not only assured for the ‘back to the basics’ but also questioning some previously recognized assumption indicated areas of change. The proposed article focuses on the CSR impact on the theory and practice of corporate governance. Its aim is to identify several areas of corporate governance such as orientation for shareholder values maximization, board work, executive compensation, performance measure and transparency and to show how these area changed in result of the development of CSR.