The impact of corporate social responsibility on shareholder value: The case of AGRIBANK

Abstract

In the business world, where many new businesses are emerging before existing organisations know it, an issue of greening management decisions has become business practices of our time. These activities are classified as corporate social responsibility (CSR). CSR is the commitment of giving back to the community to mitigate the negative externalities of their legal regulations and being guided by the organisation’s vision and values. This study focused on the impacts of these CSR activities on the overall shareholder value with the following objectives; to determine the effect of economic responsibility on shareholder value, to assess whether legal responsibilities affect shareholder value, to determine the impact of ethical responsibilities on shareholder value and to assess if philanthropic responsibilities affect shareholder value. Generally, organisations aim at positively impacting the community whilst maximizing value of all stakeholders. Thus CSR has become a crucial component to the extent of incorporating policies and procedures which integrate consumer concerns into the core strategy in order to maintain a competitive edge. CSR, is the commitment of giving back to the community to mitigate the negative externalities of their legal regulations and being guided by the organisation’s vision and values. To achieve the objective set, the study analysed CSR based on the literature and taking a quantitative approach.