MRL2601 Assignment 2
Semester 2 Memo
(COMPLETE ANSWERS)
Due September 2025
For assistance contact
Email:
, Question 1: Corporate Social Responsibility (CSR) and the Companies Act 71 of 2008
The principle of Corporate Social Responsibility (CSR) entails that companies are not solely
accountable to their shareholders for profit maximisation, but also have broader responsibilities
towards society and the environment. It recognises that businesses operate within a larger
societal context and should contribute positively to that context, beyond merely complying with
the law.
CSR encompasses a commitment by businesses to behave ethically and contribute to economic
development while improving the quality of life of the workforce and their families, as well as of
the local community and society at large. Key aspects of CSR include:
Ethical Conduct: Operating with integrity, fairness, and transparency.
Environmental Stewardship: Minimising negative environmental impact, promoting
sustainability, and conserving natural resources.
Community Engagement: Contributing to the well-being of local communities through
initiatives like job creation, education, healthcare, and infrastructure development.
Labour Practices: Ensuring fair labour practices, safe working conditions, employee
development, and respect for human rights.
Stakeholder Interests: Considering the interests of all stakeholders, including
employees, customers, suppliers, communities, and the environment, not just
shareholders.
Reflection in the Companies Act 71 of 2008:
The Companies Act 71 of 2008 (the Act) in South Africa explicitly incorporates principles of
corporate social responsibility, moving beyond the traditional shareholder primacy model. Here
are examples of how this principle is reflected:
1. Purpose of the Act (Section 7(b)(iii)): The Act's stated purpose includes promoting
"transparency and accountability in the conduct of companies." This broad objective
encourages companies to be open about their operations and accountable to a wider range
of stakeholders, which is a cornerstone of CSR.
2. Social and Ethics Committee (Section 72 and Regulation 43): The Act mandates that
certain public companies, state-owned companies, and large private companies establish
a Social and Ethics Committee. This committee is tasked with monitoring the company's
activities regarding:
o Social and economic development (including the company's standing in terms of
the Broad-Based Black Economic Empowerment Act).
o Good corporate citizenship (including the company's promotion of equality,
prevention of unfair discrimination, and responsible environmental practices).
o The environment, health, and public safety.
Semester 2 Memo
(COMPLETE ANSWERS)
Due September 2025
For assistance contact
Email:
, Question 1: Corporate Social Responsibility (CSR) and the Companies Act 71 of 2008
The principle of Corporate Social Responsibility (CSR) entails that companies are not solely
accountable to their shareholders for profit maximisation, but also have broader responsibilities
towards society and the environment. It recognises that businesses operate within a larger
societal context and should contribute positively to that context, beyond merely complying with
the law.
CSR encompasses a commitment by businesses to behave ethically and contribute to economic
development while improving the quality of life of the workforce and their families, as well as of
the local community and society at large. Key aspects of CSR include:
Ethical Conduct: Operating with integrity, fairness, and transparency.
Environmental Stewardship: Minimising negative environmental impact, promoting
sustainability, and conserving natural resources.
Community Engagement: Contributing to the well-being of local communities through
initiatives like job creation, education, healthcare, and infrastructure development.
Labour Practices: Ensuring fair labour practices, safe working conditions, employee
development, and respect for human rights.
Stakeholder Interests: Considering the interests of all stakeholders, including
employees, customers, suppliers, communities, and the environment, not just
shareholders.
Reflection in the Companies Act 71 of 2008:
The Companies Act 71 of 2008 (the Act) in South Africa explicitly incorporates principles of
corporate social responsibility, moving beyond the traditional shareholder primacy model. Here
are examples of how this principle is reflected:
1. Purpose of the Act (Section 7(b)(iii)): The Act's stated purpose includes promoting
"transparency and accountability in the conduct of companies." This broad objective
encourages companies to be open about their operations and accountable to a wider range
of stakeholders, which is a cornerstone of CSR.
2. Social and Ethics Committee (Section 72 and Regulation 43): The Act mandates that
certain public companies, state-owned companies, and large private companies establish
a Social and Ethics Committee. This committee is tasked with monitoring the company's
activities regarding:
o Social and economic development (including the company's standing in terms of
the Broad-Based Black Economic Empowerment Act).
o Good corporate citizenship (including the company's promotion of equality,
prevention of unfair discrimination, and responsible environmental practices).
o The environment, health, and public safety.
