Corporate Citizenship hints upon the ideals of Corporate Social Responsibility for businesses for fulfilling their obligations towards meeting legal, ethical and economic responsibilities entrusted on them by shareholders so that on one hand they may continue to bring in avenues of profitability for stakeholders along with contributing for developing the community in which they operate.
Corporate citizenship has an important role to play because with the increase in demand for socially responsible corporations today, investors, consumers and employees are more willing to exercise their power to punish companies which do not share their values. This might lead to a chain reaction in which investors of a company having negative corporate citizenship practices,may boycott its products or services, bad mouth the company and refrain from investing in its stock in future.
A lot of corporates have already begun to exploit the opportunity forwarded by Corporate Citizenship, for example, Tata Steel has committed itself to improve the quality of life of its people and they spend about 5-7% of their profits after tax on CSR initiatives related to healthcare, social sustainability and inclusive growth. On similar grounds, Microsoft, Oracle, Honda, Accenture, Honda, Boeing, KPMG, etc. have initiated Corporate Citizenship drives
Normally, Corporate Citizenship, Corporate Responsibility, Responsible Business, Corporate Social Opportunity and CSR are used interchangeably and they play a significant role in community development, both economically, socially and ecologically. Corporate citizenship is about the relationship developed by a corporation with its stakeholders, hence it becomes imperative for a corporation to engage, and seek commitment with stakeholders. The origin of Corporate Governance lies in the moral legitimacy derived by the society’s reaction to a corporation’s behavior.