How HR can contribute to CSR - Essay Example

Current paper aims to highlight the main aspects of the relationship between the human resources management and the corporate governance – especially regarding the role of HRM in the development of corporate social responsibility. Reference is made to Humphrey Group and specifically to the firm’s compensation ethics as used for evaluating the compensation of the firm’s top managers. The findings of relevant academic studies are presented and analysed aiming to show that HR can support the development of corporate social responsibility in Humphrey Group – as also in firms with different structural and operational characteristics. 2. Human Resources and Corporate Governance 2.

1 Influence of HR on Corporate governance – modes, consequences The role of HR in corporate governance cannot be doubted. In fact, this role has many different aspects. In all organizations, HR department cooperates with the CEO in order to identify potential breaches of the firm’s ethical rules. Beatty et al. . The survey, which was conducted among focus groups, aimed to highlight the level at which ethical standards can interact or opposed with professional practices and rules within modern organizations.

One of the most important findings of the above study has been the fact that, quite often, HR managers are asked to serve contradictory organizational needs, or else, to serve interests, which are opposed. These are the interests of stakeholders who are favoured by different organizational initiatives. On the other hand, it seems that HR professionals may not be always aware of their role. Instead, they are informed on the activities and decisions on which their power is justified, i.e. accepted by the Board of Directors (or the organization’s leader) but they are not aware of their actual capabilities regarding their role.

At the next level, the study of Beatty et al. (2003) refers to a quite important issue: ‘the financial measurement and the rewarding systems’ (Beatty et al. 2003, p.258) are often poor. In this case, executives need to identify a solution in order to ensure the fairness in their compensation. In most cases, the response of the firms to the claims for compensation, pension and so on, are expected to be negative – in case such claim is presented to the Board of Directors. In this context, the intervention of executives in the books of their organizations is often unavoidable, even if it is not legally justified.

The most important finding of the survey conducted in the context of the study of Beatty et al. (2003) is the following one: in most organizations, ethical standards are highly promoted. However, in practice the limitation of violation of