First of all, corporations must protect themselves and their stockholders. Companies cannot flourish economically without protecting themselves and their stockholders from employee conflicts of interest. If the codes of conduct of corporations stopped at this point they would be consistent with Milton Friedman's view that the only social responsibility of business is to increase profits. This would mean that a corporation's only responsibility would be ensuring that employees obey laws and act exclusively in the interest of the company and its stockholders. Although the rights and concerns of shareholders are important CSR cannot stop here, for shareholders are not the only reason why a corporations is where it is today.
Corporations also have a responsibility to conduct themselves in proper commercial conduct.
It is important for companies to enjoy an environment of trust and employee loyalty. Ethical business practices help protect the company's reputation and ensure fair competition by discouraging company employees from paying bribes to acquire business contracts. This is a critical component of a corporation's competitive edge. This level of CSR is necessary for two reasons. First of all, it is important for companies to recognize that they are the role models for many young entrepreneurs and businesses.