Evaluation of the Effectiveness of the Company and Preparing Recommendations for Improving the Financial Position

As long as the concept of corporate social responsibility (CSR) in recent years has been given a significant attention of the world elites, this study aims to explore how CSR reporting activities of Russian blue chips influence their financial effectiveness. The research objectives set for the study were to examine literature on the topic of CSR adoption by Russian companies and the impact of CSR adoption on financial effectiveness of the Russian publicly traded companies, to collect data on the financial and non-financial performance of Russian public companies, to build a relevant model for testing the main hypotheses, followed by the analysis of the results, conclusions and financial policy implications. Through the panel data analysis of the Russian blue chips for the period from 2008 to 2018 using a pooled regression model, the study tries to prove the hypothesis that CSR reporting activities of the companies (divided in 4 dimensions) improve their financial performance. The dependent variable reflecting financial effectiveness of the companies was return-on-assets ratio (ROA). The independent variables reflecting the CSR reporting activities of the companies were 4 indices (local community, employees, environment and governance). The control variables included in the model were the company`s age, financial leverage and working capital management. The results showed that there is a positive impact CSR reporting initiatives make for the financial well-being of the company only in the field of supporting local communities, whereas the dimensions of CSR activities within environmental dimension and treatment of employees and governance proved to be irrelevant. The results of the study are partially supported by economic and corporate governance theories such as the theory of imperfect markets and stakeholder model, respectively. The results of this thesis could be valuable for the large publicly traded enterprises and their clients, the governmental structures and local communities.