Question

does company as a business form preclude any activities aimed at social impact in New Zealand.
(charitable trusts and limited liability companies)

Answer 1

As a business corporation, one firm can only invest in programmes aimed at creating social change based on their corporate social responsibility commitments. As against this, public charitable trusts have greater flexibility in investing in social impact activities because the sole aim of their existence is to create positive social impact. Also, these trusts are largely dependent on philanthropic contributions from the various firms and donors to run their daily operations. While corporations primary aim is to create value for their shareholders and run the business in a profitable manner and hence their social impact or appetite to invest in social causes is limited to the extent allowed by its board or shareholders subject to meeting the CSR norms and not affecting their profitability in an adverse manner. Thus business corporations in New Zealand can impact social causes to a limited manner only against the larger impact possible through trusts.