Abstract
M.Com. (Financial Management)
The concept of social responsibility has been in existence for centuries, but the modern notion of corporate social investment (CSI) only emerged in the 1950s. Since then, the adoption of initiatives and integration of CSI by corporations has seen a steady growth, primarily driven by stakeholders. The rise of CSI can also be attributed to a better understanding of its associated business benefits. The relationship between CSI and company performance has been investigated since the mid-1970s and consensus about this relationship has still not been reached. In this study, secondary data from company reports is used to perform a panel regression analysis to determine the relationship between CSI and company financial performance for 30 South African companies listed on both the FTSE/JSE Socially Responsible Investment (SRI) Index and FTSE/JSE Top 40 Index for the period 2010 to 2013. The relationship between the financial performance measures, return on assets (ROA), earnings per share (EPS) and CSI was confirmed as positive while the relationship between CSI and return on equity (ROE) was confirmed as negative. Mixed or inconsistent results makes it impossible to support the notion of a positive or negative relationship for the study overall. The results of this study only prove a relationship between CSI and financial performance in South Africa for the relevant companies and cannot therefore be generalised.