to maximize value

Is it “unethical” or at least socially irresponsible for a company to make no charitable contributions whatsoever? My answer is yes. Although the mandate of the companies is to maximize value in terms of profits, obeying the laws and meeting contracts to achieve their ultimate objectives, it is socially irresponsible not to get the company contributing to charitable activities such as environmental care and safety, carrying out awareness of some factors, sponsorships and provision of social amenities to the locals. Companies should contribute to good causes in the society in the humility of the corporate behavior because the stake of the corporation is not the stake of the top management of the company. In refusal not to give back to the society, the company may suffer from diminished stakeholder value.

In competitive market environment, success of a company depends on how the company supports or stands with the local community without lowering there own earnings. Stakeholder value in chartable offers is not lowered and so the dividends thus there is no absolute cause for a company not to participate in socially responsible behaviors. Stockholders are willing to buy stocks of the company that invest its profits for environmental reasons even if it has got lower monetary value in the stock exchange just because the company is socially conscious. Therefore your company being socially irresponsible by not supporting charitable deeds will likely to suffer from low employees esteem with poor quality labor, low prices of stocks and dividends and poor performance at the stock exchange due to poor publicity.