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An integrated approach to corporate governance and corporate social responsibility: The case of New Zealand : A thesis submitted in partial fulfilment of the requirements for the degree of Doctor of Philosophy at Lincoln University

Zaman, Rashid
Fields of Research
ANZSRC::150106 Sustainability Accounting and Reporting , ANZSRC::150303 Corporate Governance and Stakeholder Engagement
Since, Corporate Social Responsibility (CSR) is voluntary in most countries around the world, including New Zealand, therefore firms often engage in socially irresponsible practices. Punitive measures associated with irresponsible corporate behaviour e.g. WorldCom (2002), Air New Zealand (2007), British Petroleum (BP) (2010), Volkswagen (VW) (2015), and Wells Fargo (2016), coupled with global institutional pressure (UN peace compact), have driven CSR to a high enough profile that many (i.e. stakeholders) today now consider it a necessity for firms to define their roles in society and to adhere to social, ethical, legal and responsible standards. In terms of CSR adherence, firms use a variety of corporate governance (CG) arrangements, meaning that questions around CG-CSR interfaces are pertinent for further research. Despite the global importance and heightened awareness of CSR adaption, CG-CSR interfaces in the New Zealand context remained under researched. Therefore, exploring CG-CSR interfaces is of important, not only for advancing knowledge but also for policy development in New Zealand. More specifically, this research answers the following two questions (i) what is the relationship between CG and CSR? and (ii) How are CG and CSR integrated in an organisational context? To do, this research employs mixed (qualitative and quantitative) methods, comprised of two phases. In the first phase, face-to-face interviews were conducted with managers from CSR champion New Zealand Stock Exchange (NZX) listed firms. The interviews were designed to test the CG-CSR relationship in actual company settings and to develop a CG-CSR integrated framework. In the second stage, this research empirically tested the proposed CG-CSR integrated framework obtained in the first phase through a survey conducted with senior leadership of all NZX listed companies using the Multiple- Criteria Decision Analysis (MCDA) technique (i.e. Analytical Hierarchal Process). Although this research identifies three potential conjectures relating to the CG-CSR relationship in New Zealand; (i) CSR as a pillar of CG, (ii) CSR as a dimension of CG and (iii) CG-CSR co-existence, but it is noted that ‘CG as a pillar of CSR’ was highlighted by respondents as having particular significance. This implies that effective CG promote firms CSR practices, supporting the stakeholder theory. In response to the second research question, this research draws a six-stage CG-CSR integrated framework based on stakeholder theory, that identifies, (i) key stakeholders who actively seek management attention for CSR, (ii) main CG actors who plan and develop CSR strategies, (iii) appropriate CG channels to implement CSR, (iv) principal CSR activities (v) existing benchmarks for CSR performance evaluation, (vi) preferred communication channels to report firms’ commitment to CSR principals, and discusses the convergence between these stages. The research further empirically tests and validates the CG-CSR integrated framework using result from the quantitative survey collected from senior management from NZX listed firms. In addition, the Analytical Hierarchal Process (AHP) technique is used to prioritise the factors of each stage of the established CG-CSR integrated framework. As a pioneer research in the New Zealand context, the findings are valuable for academics, regulators, practitioners and other stakeholders (i.e. investors, shareholders, customers, and community groups) interested in understanding the CG-CSR nexus and promoting responsible business practices. More specifically, the findings offer researchers a framework to analyse the CG-CSR relationship. For regulators, identification and reporting of the lived experiences of corporate managers provide insight into their understanding of the CG-CSR relationship and integration, thereby assisting them to develop policies which promote responsible business practices. For practitioners, the proposed framework provides systematic guidance for firms seeking to adopt formal CSR programmes. The findings of this research are also beneficial for stakeholders who not only influence but also drive CSR practices.
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