TITLE:
An Exploration of the Influence of Corporate Social Responsibility Performances on Shareholders’ Return
AUTHORS:
Rachael Okwudili Iliemena, Sunday Jones Aniefor, Rosemary Uagbale-Ekatah, Happiness Chibuzor Goodluck
KEYWORDS:
Labour Practices, Human Rights Practices, Customer Health and Safety Practices, Shareholders’ Return on Investment
JOURNAL NAME:
Journal of Financial Risk Management,
Vol.12 No.2,
June
13,
2023
ABSTRACT: At a time when there is general increase in price level and decrease in
the purchasing power of currencies, many companies channel more energy towards
their economic survival. One of the conflicting questions that confront the
management of companies at such critical time is, “Do we focus on stakeholders’
concern or shareholders’ concern”. Emanating from this, this study examined the
influence of corporate social responsibility performance on returns to
shareholders. It thus, focused on three aspects of corporate social
responsibility (labour practices, human rights practices and customer health
and safety practices) on shareholders’ return on investment. Secondary data
were sourced from annual financial and sustainability reports of 46 sampled
companies from the period 2012 to 2021. Results from the regression analyses
reveals that labour practices have negative influence on shareholders’ return on
investment while human rights practices and customer health and safety
practices both have positive influence on shareholders’ return on investment.
However, all effects were found not to be statistically significant. Owing to
this, it is concluded that corporate social responsibility performances have no
significant influence on shareholders’ return. This could be due to poor
performance scores in some areas of corporate social responsibility practices
and the weak monitoring infrastructure in the Nigerian scenario, it is
therefore recommended that the Nigerian Securities and Exchange Commission
(SEC) builds minimum reporting benchmarks for each expected performance
component of social responsibility practices with annual awards to encourage
better social responsibility performance among Nigerian listed firms generally
and specifically, the Nigerian manufacturing sector which is currently a major
contributor to the Nigerian economic development.