This paper illustrates that the US institutional environment requires organizations to have a robust corporate governance framework in order to ensure that business operations are conducted with lucidity. The regulatory and governing authorities have clearly specified that organizational managers will have put the interest of the stakeholders ahead of their own interest. Organizations have been stipulated to conduct strict supervision of their business operations and to report any suspicious activity that is identified. The institutional environment in the US has assumed the responsibility of evaluating the corporate governance frameworks of the US-based as well as the foreign companies as well as to assess the extent to which these companies engage in CSR activities. In order to operate in this environment, companies need to review their corporate governance frameworks and CSR practices periodically with the underlying aim of identifying the loopholes within the frameworks and areas of improvement within the CSR practices. The regulatory authorities require organizations to communicate their corporate governance codes as well as their CSR scope and objectives to their employees so as to make sure each and every employee with an obligation to comply with the US institutional environment has a clear understanding of his/her responsibility in terms of upholding the corporate governance and CSR codes of their respective organization. The US institutional environment has increased their benchmark for corporate governance and CSR practices for companies. They have clearly specified the importance for companies to work in close coordination with the community. Regulations have been enacted that obligates companies to understand and the response to the interest of the community in which the business operates alongside pursuing their profit making objective. Organizations that fall within the scope of the US institutional environment have to provide succinct reports regarding their corporate governance frameworks. In these reports, the companies highlight the integrity with which the companies conduct their business operations. This reporting is done publicly in order for the stakeholders of the company and other interested third parties to adjudge the efficacy of the company in terms of conduct transparent business. Companies are obligated to report the accounting procedures that they follow in order for the readers to understand the extent to which the managers have complied with the regulations stipulated by the regulatory authorities.
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