Charitable Donations and Corporate Philanthropy: Examining the Trend in the Law Relating to Corporate Social Responsibility in the UK and Nigeria

Abstract

The concept of corporate social responsibility (CSR) finds roots in the stakeholder theory which is in conflict with the orthodox view of the purpose of a company, and by implication, the doctrine of shareholders primacy. What has emerged from the conflictual debate between shareholders primacy and the stakeholder theory is a recognition that in undertaking companies’ businesses and making profits for shareholders, directors should consider the interests of other stakeholders such as employees and customers, including the impact of the companies’ operations on the environment and local communities. Thus, as part of CSR companies make charitable donations and involve in philanthropies. However, CSR remains at the realm of voluntarism and moral suasion of companies rather than in the spheres of corporate legal obligations to stakeholders. Through the decades, much of the academic discourse has centred on the need for companies to undertake CSR but without examining the traditional view of the law limiting CSR. This article critically examines the concept of CSR from the perspective of company law, and determines its legal status in light of the trend in the provisions of the UK and Nigerian Companies Acts.

Keywords: Corporate social responsibility, Charitable donations, Corporate philanthropy, Shareholder primacy, Stakeholder theory, Companies Act 2006, Companies Act 2020

DOI: 10.7176/JPID/61-05

Publication date: June 30^th 2022