SHRM US Employment Laws and Regulations Practice Test 2026 - Free Employment Law Practice Questions and Study Guide

Corporate social responsibility (CSR) encompasses a range of practices and principles that organizations adopt to manage their business processes in a way that produces an overall positive impact on society. When considering employee rights and corporate governance, this answer highlights the ethical obligations companies have towards their employees and stakeholders.

CSR goes beyond simply making a profit; it involves ensuring that employees are treated fairly, receive appropriate rights and benefits, and work in a safe and supportive environment. Corporate governance is also a fundamental aspect, as it relates to the structures and processes for decision-making, accountability, and conduct within the organization. Good corporate governance ensures that companies operate ethically and transparently, which is essential for earning public trust and maintaining a positive reputation.

While other options touch on important aspects of business operations, they do not encompass the broader ethical and societal responsibilities that CSR represents. CSR is fundamentally about the company’s role and responsibilities in the larger community and environment, rather than just financial or operational metrics.