Paying for CSR is Good Governance [Archive.org URL]

More and more firms today are including incentives for corporate social responsibility (CSR) in their executive compensation contracts. But is this a worthwhile practice? Who benefits from it? Recent research shows a link between CSR activities and better social performance and the bottom line. But is paying for CSR beneficial for shareholder interests? Accounting and stock-price performance incentives are already common in executive compensation contracts to maximize shareholder value, which makes CSR incentives for financial performance potentially redundant. Some critics even argue that incentives for CSR are detrimental to firm profitability and growth. So, is there a place for CSR in effective executive compensation?

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