The Sabancı University Center of Excellence in Finance (CEF) sponsored by Akbank hosted a lecture by London Business School faculty member Alex Edmans on “Relationship between Corporate Responsibility and Returns on Investment”.
The Sabancı University Center of Excellence in Finance (CEF) established with the founding sponsorship of Akbank to achieve excellence in finance hosted a lecture by London Business School faculty member Alex Edmans at the Sabancı Center on Friday, February 3, 2017.
In his lecture titled “Relationship between Corporate Responsibility and Returns on Investment", Edmans argued that corporate social responsibility had to be envisaged together with profit. Defining corporate social responsibility as consideration by companies of stakeholders other than the shareholders of the company, Alex Edmans said that corporate social responsibility was based on thinking beyond short-term material income. Explaining the recent change in the concept of corporate social responsibility, Edmans said, “Companies need to consider many factors at once and think about the cumulative impact of all their decisions on profitability."
Edmans stated that were corporate social responsibility to become part of a company, investments that were deemed unthinkable before would come within reach. Discussing the question whether corporate social responsibility leads to profitability or companies that are already profitable engaging in corporate social responsibility, Edmans emphasized the difficulty of measuring social responsibility.
Employee satisfaction was another subject for Alex Edmans, who said that satisfaction had good effects on company value. Edmans said, “When employees are satisfied, they perform better and are more loyal to the company." Alex Edmans also noted that although customer satisfaction was costly, it paid dividends in the stock exchange. Edmans said that investing in corporate social responsibiltiy was not simply an option, but a productive area of business. Alex Edmans concluded by saying that when companies focus on short-term material gains instead of treating their employees well, they would be unable to come up with new products in the long term.