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INFLUENCE OF CORPORATE SOCIAL RESPONSIBILITY DISCLOSURE
ON CORPORATE GOVERNANCE AND COMPANY PERFORMANCE

BY
LE ANH CONG
Graduation Project Submitted to the Department of Business Studies, HELP
University College, in Partial Fulfillment of the Requirements for the Degree of
Bachelor of Business (Accounting) Hons ii
OCTOBER 2010
Declaration of Originality and Word Count


would like to express my thank to Ms. Sumathi and Ms. Shenba at Help University
College, who initiated the project and give so much instruction and support.
LE ANH CONG

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Abstract

INFLUENCE CORPORATE SOCIAL RESPONSIBILITY DISCLOSURE ON
CORPORATE GOVERNANCE AND COMPANY PERFORMANCE
BY
LE ANH CONG
October 2010
Supervisor: Nguyen Thi Phuong Hoa
Corporate social responsibility (CSR - Corporate Social Responsibility) is a growing
trend in the world but is still very new in Vietnam, only focused on footwear and apparel
industries due to the needs of the customer orders overseas. Vietnam is clearly hard
goods that can compete on price or quantity with China, that way I can help local
businesses get the advantage in a difficult war in this market? CSR may be the answer if
your business really understand the meaning and turn into a CSR culture, thinking and
working methods. The objective of the research is to assess the understanding of
Vietnamese individual businessmen on the topics of CSR. Besides, the research also
businessmen wants to define which major factors contributing to the CSR importance by
asking respondents‟ understanding and opinion on CSR . Besides that, the business in
Viet Nam find hard to use CSR as a tool to value firm and it is also difficult for them to
make investment decision when CSR issues are mentioned.

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2.8 CSR’s impacts on accounting 15
CHAPTER 3: RESEARCH METHODOLOGY 16
3.1 Research Objectives 17
3.2 Theoretical framework and measurement 17
3.2.1 Corporate governane 17
3.2.2 Links between CG and CSR 18
3.2.3 Global Reporting Initiative (GRI) 18
3.3 Research methodology 19
3.4 Data sources 19
3.4.1 Primary data 19
3.4.2 Secondary data 20
3.5 Research method 20
3.6 Research tool 20
3.7 Limitations 21
CHAPTER 4 : ANALYSIS 22
4.1 Description of Result 23
4.1.1 Age 23
Table 1 : Age 23
4.1.2 Gender 23
Table 2 : Gender 23
4.1.3 Corporate governance 24

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4.1.4 Links between Corporate governance and Corporate social responsibility
28
4.1.5 Global Reporting Initiative 31
4.2 Result Analysis 33
4.2.1 Assessment of CSR/ CSR practices 33
4.2.2 Assessment of the CG – CSR Link 35
4.2.3 Global Reporting Initiative 35

CG Corporate governance
CSR Corporate Social Responsibility
GRI Global Reporting Initiative
SI Sustainability investing
SRI Socially responsible investing
TBL Triple Bottom Line
VCCI Chamber of Commerce and Technology of Vietnam
WBCSD World Business Council for Sustainable Development
WTO
World Trade Organization 1
CHAPTER 1 : INTRODUCTION
1.1 Research background
1.2 CSR in Viet Nam
1.3 Problem Statement
1.4 Objectives of Research
1.5 Research Methods
process applications that aim to meet or exceed to meet the requirements and
expectations of stakeholders about the economic benefits, environmental performance
and social impact. There are three important concepts should be considered in order to
achieve sustainable development: economic growth, ecological balance and the

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evolution of society. With the process of social responsibility, business can contribute to
the objectives of sustainable development through the local association of their activities
with the community to achieve positive results for all parties. Aligning CSR concepts
into daily operations bring many benefits to the enterprise. For small and medium
enterprises in Vietnam, the application of the concept of CSR can bring significant
benefits in the market, signing or extending contracts with customers, including
international organisations and customers. Productivity of the enterprises can be
enhanced through the improvement of working conditions of workers. Benefits of
adopting CSR for businesses are substantial. First, the responsibility of investors
indicated correspond to the performance and social environment of a business. The
positive response of investors, in the developed countries and developing countries, is
seen as the environmental performance of organizations as well. Similarly, the
organization is a multinational operation focused performance and the social
environment of potential partners before choosing investments. The underlying trend of
investment in the future will require the Vietnamese enterprises to look at the
application of CSR.
1.2 CSR in Viet Nam
Becoming a member of WTO is synonymous with joining in an international playing
field with many new, harsh rules to comply with. Besides, globalization has made the
fact that the company‟s targets are not only profit but also contribution to the society.
From this point of view, in the respect of strategy, CSR has a compulsory meaning in
making reliable social standards for decision- making process of companies. However,
the concept of CSR is still relatively new in Vietnam, so the application remains limited.
According to research by the World Bank in Vietnam, barriers and challenges to the

Lady resonate and are consumer support . HUB Cafe is one of the enterprises are small
and medium-scale implementation of CSR by creating a community library with more
than 10,000 volumes of customer service. HUB is being built as a place to share
knowledge and materials to help students and conduct research, organize events, and the
assembly agreed on issues of education, work experience and career. Therefore, the most
difficult of Vietnam enterprises at present is the information leads to confusion not know
where to start before the jobs related to CSR. To promote the implementation of social
responsibility of enterprises, it is best to have an association or organization to monitor
and advise businesses.
1.4 Objectives of Research
According to Nguyen Hong Ha Deputy director of the Chamber of Commerce and
Technology of Vietnam (VCCI) in Ho Chi Minh, CSR must be placed on the business
strategies of each business. CSR has been and will be an essential part to the success of
some business enterprises. The application of CSR has created a more stable and
productive business . Moreover, the enterprises received support from consumers and
society in the common interests that bring businesses to the community. To succeed in
the application of CSR in Vietnam, the first business owners to deploy, implement CSR
exploited for their labor as the observance of laws on wages policy, social insurance,
employment contract to build a relationship based on trust and goodwill with business
workers.
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1.5 Research Methods
The first aim of this study is to provide a theoretical framework for understanding the
completed concept of CSR and other relevant components under this area. In general,
the CSR is a concept that offers to companies their opportunity to treat environmental
and social problems as a part of their business operations. The second aim of this study
is to evaluate the impact of corporate social responsibilities in Viet Nam. Four questions
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2.1 Definition of CSR
In the current economic integration, social responsibility (CSR - Corporate Social
Responsibility) is becoming a concept many people are interested and have strategic
importance for business. It refers to CSR is not only the right thing to do "but also" wise
to do ". So to understand exactly what is CSR? There have been numerous definitions
given as "Social responsibility implies improving the behavior of the business to a level
consistent with the norms, values and social expectations are common" (Prakash, Sethi,
1975). Or "social responsibility of enterprises, including the expectations of society on
economic, legal, ethics and philanthropy for organizations in a given time" (Archie.B
Carroll, 1979) . Maignan and Ferrell also introduced the concept of their own concise
about CSR: "A business with social responsibility in deciding and its operators to create
and balance the different interests of individuals and groups related bodies. "
There are many different definitions to explain CSR, but one of the definitions are used
most commonly defined by the World Business Council for Sustainable Development
(WBCSD) launched "CSR is the commitment of business to contribute to sustainable
economic development, through the compliance standards of environmental protection,
gender equality, labor safety, labor rights, fair pay, training and staff development,
community development in ways that benefit both businesses as well as the overall

(advertising), distribution, sales and competition. Economic aspects of social
responsibility of a business is the basis for the operation of the business. Most of the
economic obligations in business are institutionalized into the legal obligations. The
second part, legal aspects. Legal aspects of the social responsibility of a business
enterprise is to fully implement the provisions on the formal legal for the parties
concerned. Things like this law will regulate competition, consumer protection,
environmental protection, promote fairness and safety initiatives and provides protection
against misconduct. The legal obligation is expressed in civil and criminal law.
Basically, legal obligations, including five aspects: (1) Regulatory competition, (2)
Consumer Protection, (3) Environmental Protection,(4) Safety and Equality, (5)
Encourage detect and prevent misconduct. Through legal liability and social force
members must implement the behavior is acceptable. Organizations can not survive long
if they do not perform their legal responsibilities. Ethical dimensions of social
responsibility of a business are the acts and activities that society wants to exist in the
business but not defined in the legal system, not been institutionalized into law. This
aspect is related to what the company decides to be true, fair, beyond the legal
requirements are tight, it just acts and activities that members of organizations,
communities and society expect from the business even though they were not written
into law. Ethical dimensions of a business is often expressed through the principles and
moral values are presented in this respect the mission and strategy of the company.
Through this publication, principles and moral values become the lodestar for the
concerted action of each member of the company and with our stakeholders. The final

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category, discretionary aspect: Responsibility is the charitable acts of the business
beyond the expectations of social support such as donations to the poor people, funding
scholarships, contributions to community projects. The difference between charity and
responsible business ethics is entirely voluntary.
2.3 The concepts related to CSR
2.3.1 Business Ethics

2.4 Stakeholder theory
Stakeholder Theory focuses on how an organisations interact with particular stakeholder
groups. There are two categories of Stakeholder Theory: the ethical ( or normative)
branch and the managerial branch. Under the ethical branch of Stakeholder Theory,
there is a view that disclosures are responsibility driven and that all stakeholders that are
impacted by the operations of the entity have a right to information about its operations.
Therefore, under this perspective, social responsibility disclosures are made in response
to an ethical responsibility, rather than in response to any desire to maximise wealth or
to appease particular, powerful parties. By contrast, under the managerial branch,
disclosures are used as one strategy to control the actions of powerful stakeholders.
Powerful stakeholder are often considered as those parties who have resources which are
important to the ongoing survival of the organisation. Under this perspective , it is the

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needs of the powerful stakeholders that are attended to over and above the needs of other
parties affected by the entity‟s operations. If the powerful stakeholders expect social
responsibility disclosures then the firm is predicted to make them.
2.5 Legitimacy Theory
Legitimacy Theory relies on the notion of a social contract, which is an implied contract
respresenting the norms and expectations of the community in which an organisation
operates. An organisation is deemed to be legitimate to the extent that it complies with
the terms of social contract. Hence, various responsibility disclosures will be made in an
effort to make legitimate the ongoing existence of the organisation. Legitimacy theory
could also explain the effect of culture on CSR reporting. This theory explains the
association between accounting and society from a company‟s perspective. A company
would voluntarily report on activities if management perceived that the particular
information is demanded by the societies which it operates (De Villiers and Van Staden,
2006).
2.6 Institutional Theory
Institutional Theory provides a number of reasons why corporations might make

should look at CSR as one of two aspects for business solutions such as reducing risk
and create competitive advantage. CSR has just such an exception in social ethics and an
exception to exist and compete in business. 15
2.8 CSR’s impacts on accounting
Social responsibility of business is an inevitable issue associated with business. It may
gives companies significant advantages such as: brand confirmed in customer's business
and increased corporate profits. Social responsibility of enterprises plays the role of
tectonic customer loyalty with great moral values "style", and it will polish the names of
enterprises, and assert that the brand is good cause felt in the heart of people, they will
sell many times more. Confirmed brand : In times of strong brands that are seen as a tool
to create unique competitive advantage for businesses, then "faith becomes necessary.
Business ethics and social responsibility became the foundation for the really build a
strong brand. Increased corporate profits: Respect social morality and implement ethical
business behavior is investing in increased profitability and sustainable development of
enterprises. Keep its reputation with clients, customers, employees, communities and
government may create more business opportunities for enterprises and business
connections to keep customers, employees and this creates opportunities for businesses
can generate much more profit.