Abstract

The ongoing discourse on Corporate Social Responsibility (CSR) recognises two positions canvassed extensively in literature. These positions have crystallised in the agency theory and the stakeholder theory. The agency theory holds the proposition to be true that the social responsibility of business is profit maximisationand that the duty of the business executive or manager is to produce result for his employer(s) namely, the board of directors and the shareholders. The stakeholder theory, on the other hand, avers that beyond the board of directors and the shareholders of a company there are a large number of stakeholders that are affected by the operations of a firm; and that these stakeholders deserve some gestures of goodwill and solidarity from business organisations, which in turn would impact positively on their operations. A third position often glossed over in this arena which I propose to canvass is what I choose to call the “obligatory theory” of corporate social responsibility which simply states that a business organisation is duty-bound or obligated to be socially responsible to the environment of operation.