Can CSR, Market Efficiency, and Financial Rewards Interact Positively in Periods of Crisis?

Abstract

Muslim scholar Youssef El-Khalil, senior CFO Bank of Lebanon, Lebanon, and visiting professor at the LSE, focuses upon the importance of corporate social behavior: its changing nature, its recent greater efficacy, and the role it may play in the future. In this chapter, El-Khalil examines an idea of corporate social behavior (CSR) as integral to the market. This approach is a method of dealing with externalities in order to promote the social good without government intervention. The drive to realize the social good is found not only in economics but also in the desire for truth and charity and justice as understood by Catholic and Muslim believers, respectively, as well as philosophers who depict altruism as a means of realizing humanity. Thus, CSR should no longer be viewed as mere philanthropy; besides the contribution it makes on the human level, CSR aids businesses in avoiding reputation risks and encourages research and development in specific fields. As CSR becomes more effectively integrated into decision-making, it also takes on the character of alliances between different structures with different forms, such as corporations, NGOs, governments, and elected bodies. If CSR can avoid being treated as merely a trend, in the future it can become an essential component of business throughout the world.