Question

How corporate social performance may affect the financial decision making and valuation?

Answer 1

Corporate social responsibility means that management and executives have an additional responsibilities to be ethical, moral, and philanthropic responsibilities. It means that the corporate is expected to do more than just comply with the law and earning a fair return for shareholders.. The corporate social performance not only improves the it's reputation and social value but also enhances the profitability and performance. The return on assets is mainly determined by corporate governance, number of employees, products, customers, and board size. The corporate social performance allows employees, and business success go together. The business that improves their image through social and environmental performance create greater employee loyalty from employees. Also the social and environmental performance decisions enhances culture helps to attract and retain the clients.