Doing the Right Thing When No One Is Looking: Corporate Government Mechanisms and Employee Focused CSR

There was a strong case to develop better understanding of how employees fit into the wider CSR agenda in the Central and Eastern Europe region and especially in Hungary. Employees’ growing importance to businesses is self-evident, and as a result corporate policies and actions regarding company responsibility towards employees have been placed under intense scrutiny in recent years. One of the areas of criticism for Hungarian companies within the issue of CSR is that their employeefocused CSR initiatives are weak, often ad hoc leading to the lack of strategic focus. There certainly is a wide array of possible reasons to support accusation however in current research we look at only one possible explanation. The lack of strategic CSR focus may partly result from corporate governance mechanisms which have their impacts on all areas of operation at all levels within the organisation. Company owners are more concerned with performance targets which results in decreasing CSR expenditures (Coffey & Fryxell, 1991).