Association of Chartered Certified Accountants (ACCA) Certification Practice Test

What does corporate social responsibility prioritize?

1. Maximizing shareholder profits

2. Compliance with tax laws

3. Interests of stakeholders beyond just shareholders

4. Reducing operational costs

The correct answer is: Interests of stakeholders beyond just shareholders

Corporate social responsibility (CSR) prioritizes the interests of stakeholders beyond just shareholders. This approach recognizes that a company's actions have broader implications for various groups, including employees, customers, suppliers, the community, and the environment. Unlike a singular focus on maximizing shareholder profits, CSR emphasizes the importance of sustainable and ethical practices that contribute positively to society and the environment. By taking into account the needs and concerns of a broader range of stakeholders, organizations can create long-term value and build trust, which can ultimately benefit their overall reputation and profitability. Choosing to focus on stakeholders reflects a more holistic view of business success, recognizing that companies operate within and are influenced by their relationships with various parties, not just investors. This perspective aligns with the growing expectation from consumers and society for businesses to act responsibly and contribute to societal goals.