Study of the Effects of Corporate Governance on Corporate Social Responsibility in Non-ferrous Industry
|School||Inner Mongolia University of Science and Technology|
|Keywords||corporate governance corporate social responsibility non-ferrous metalindustry|
Global warming and a series of social problems were caused by the development ofcorporate. The problems of corporate social responsibility have drawn the attention of allcountries worldwide. Our country has also issued many decrees about it. Meanwhile, peopleadjust corporate governance mechanisms to improve corporate social responsibility.The effects of corporate governance on corporate social responsibility were discussedon a theoretical basis in earlier literature. The empirical research about the effects ofcorporate governance on social responsibility has not been conducted until recently. Thefocus of attention about the effects of corporate governance on corporate social responsibilityis mainly on different kinds of industries at present.This study aims at investigating the effects of corporate governance on corporate socialresponsibility in non-ferrous metal industry. There are several goals:(1) to identify theeffects of internal corporate governance mechanisms on corporate social responsibility,(2) toidentify the effects of external corporate governance mechanisms on corporate socialresponsibility, and (3) to contrast these effects with the effects of internal and externalcorporate governance on corporate social responsibility in Baogang Rare Earth Companyand then give some suggestions on how to improve its social responsibility.The research subject is the effects of corporate governance on corporate socialresponsibility in non-ferrous metal industry. Design three regression models: the first is theeffects of internal corporate governance independent variables on social responsibilitydependent variables, the second is the effects of external corporate governance independentvariables on social responsibility dependent variables, and the third is the effects of thecompletely corporate governance independent variables on social responsibility dependentvariables. Data about corporate social responsibility dependent variable and internalcorporate governance independent variables are generated from67selected listed companiesfrom the non-ferrous metal industry sector (2009-2011) while data about external corporate governance independent variables are generated from NERI INDEX of Marketization ofChina’s Provinces Report edited by Fan Gang and Wang Xiao Lu in the same period.Descriptive analysis, correlation analysis and regression analysis are employed to identifythe effects of internal, external and the completely corporate governance on corporate socialresponsibility.The findings indicate that most of internal corporate governance variables havenegative effects on corporate social responsibility except the salaries of senior officials andall the external governance variables have positive effects on corporate social responsibility.The complete effects of the corporate governance on corporate social responsibility reflectthe same characteristics. By contrasting these effects with the effects of internal and externalcorporate governance on corporate social responsibility in Baogang rare earth company, datasuggests that Baogang rare earth company has a better internal corporate governanceenvironment which will improve its taking on social responsibility and a worse externalcorporate governance environment which will impeding its taking on social responsibility.The suggestions for Baogang Rare Earth Company are as follows:(1) to take measures,such as controlling the numbers of directors on the board, giving full play to independentdirectors, to reduce the negative effects of some internal corporate governance mechanismson corporate social responsibility for the whole non-ferrous metal industry,(2) to strengthenthe positive effects of internal corporate governance mechanisms on corporate responsibilityin Baogang Rare Earth Company, and (3) to attempt to limit the negative effects of worseexternal corporate governance environment on corporate social responsibility in BaogangRare Earth Company.