| Abstract: | Corporate Social Responsibility (CSR) is a concept whereby companies regard
stakeholder interests in reaching corporate decisions on voluntary basis. Even
though social responsibility is not alien to Ethiopians who are known for their
philanthropic and charitable activities, there is no law that expressly requires
CSR standards and thresholds. Provisions of the 1960 Commercial Code and
other domestic laws show that Ethiopian companies have the option to comply
with CSR in their core business strategy and decision making. To that end,
companies, have either individually or at sector level, developed model codes
of conduct and guidelines including CSR projects and initiatives. However,
they are inadequate and do not guarantee effective CSR behavior among
companies. There is thus the need to adequately integrate CSR practices into
their core business decisions, and meet the interests and legitimate expectations
of their employees, creditors, customers, local communities, and the
environment. I argue that the alternatives to ensure effective CSR regulation in
Ethiopia are adopting the Enlightened Shareholder Value (ESV) which
recognizes a CSR framework tighter than the existing shareholder primacy
model, or the Responsible Stakeholder Model (RSM) which adopts more subtle
and lighter principles than stakeholder model to demand CSR compliance. |
