29128808 Corporate Governance CSR

8/8/2019 29128808 Corporate Governance CSR

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Corporate GovernanceCorporate Governance

andandCorporate Social ResponsibilityCorporate Social Responsibility

--Trivikram. ChTrivikram. Ch


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IndexIndex

Corporate GovernanceCorporate Governance

Definition of Corporate Governance.Definition of Corporate Governance.

Introduction to Corporate Governance.Introduction to Corporate Governance.

Fundamental functions of CorporateFundamental functions of Corporate

Governance.Governance.

Importance of Corporate GovernanceImportance of Corporate Governance..


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Corporate Social ResponsibilityCorporate Social Responsibility

Definition of CSR.Definition of CSR.

Introduction to CSR.Introduction to CSR.

CSR in Indian context.CSR in Indian context.

Examples of CSR.Examples of CSR.

Arguments for and against CSR.Arguments for and against CSR.

Conclusion.Conclusion.


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Introduction to CGIntroduction to CG

Corporate governance is the ability toCorporate governance is the ability to

function profitably while obeying laws,function profitably while obeying laws,

rules and regulations.rules and regulations.

Good corporate governance is the glueGood corporate governance is the glue

that holds together responsible businessthat holds together responsible business

practices which ensures positive workplacepractices which ensures positive workplacemanagement and sustained financialmanagement and sustained financial

performance.performance.


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Fundamental functions of CorporateFundamental functions of Corporate

GovernanceGovernance Corporate governance links directly toCorporate governance links directly to

three fundamental functions of boards andthree fundamental functions of boards and

the directord s of the companies andthe directord s of the companies andshareowners they serve. They are:shareowners they serve. They are:--

Protecting stakeholder rights.Protecting stakeholder rights.

Managing riskManaging risk Creating longCreating long--term business valueterm business value


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Protecting stakeholder rights andProtecting stakeholder rights and

interestsinterestsOrganization for Economic CoOrganization for Economic Co--operationoperation

and Development (OECD) advisesand Development (OECD) advises

businesses to recognize and safeguardbusinesses to recognize and safeguardstakeholders rights.stakeholders rights.

These Principles call on boards to be trulyThese Principles call on boards to be trulyaccountable to shareowners and to takeaccountable to shareowners and to take

ultimate responsibility for their firmd sultimate responsibility for their firmd sadherence to a high standard of corporateadherence to a high standard of corporatebehavior and ethics.behavior and ethics.


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If stakeholders are adversely affected by aIf stakeholders are adversely affected by acompanyd s actions, shareowner value willcompanyd s actions, shareowner value will

suffer.suffer.


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Managing riskManaging risk

By addressing and managing risksBy addressing and managing riskseffectively, boards can position theireffectively, boards can position theirbusinesses to perform well financially andbusinesses to perform well financially andsecure a longsecure a long--term license to operate. Byterm license to operate. Byfailing to do so, boards can underminefailing to do so, boards can underminetheir companyd s reputation.their companyd s reputation.

Proactively i entifying possible humanProactively i entifying possible humanrights concerns allows a business to morerights concerns allows a business to moreeffectively a ress potential risks.effectively a ress potential risks.


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The proper management of risk ensuresThe proper management of risk ensurescustomer satisfaction and reputation.customer satisfaction and reputation.


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Creating business valueCreating business value

The role of any board is guidingThe role of any board is guidingcorporate strategy and creating wealth forcorporate strategy and creating wealth for

shareholders.shareholders.The most effective corporateThe most effective corporate

citizenship and sustainability strategies arecitizenship and sustainability strategies areled from the top, incorporate a wide rangeled from the top, incorporate a wide range

of stakeholder views and are aligned withof stakeholder views and are aligned withthe companyd s business priorities.the companyd s business priorities.


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Better working conditions improve the efficiencyBetter working conditions improve the efficiencyof the supply chain.of the supply chain.

Human rights strategies, such as preventingHuman rights strategies, such as preventingdiscrimination in the workplace and promotingdiscrimination in the workplace and promotinggender and ethnic equality in business processes,gender and ethnic equality in business processes,have been shown to increase innovation inhave been shown to increase innovation in

products and services.products and services. Good management of environmental, social andGood management of environmental, social andgovernance has shown to strengthen reputationgovernance has shown to strengthen reputationand brand value.and brand value.


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Importance of CorporateImportance of Corporate

GovernanceGovernanceResearch shows that responsible managementResearch shows that responsible management

of environmental, social and governance issuesof environmental, social and governance issues

creates a business ethos and environment thatcreates a business ethos and environment thatbuilds both a companyd s integrity within societybuilds both a companyd s integrity within society

and the trust of its shareowners. It helps toan the trust of its shareowners. It helps to

Increase efficiency of all activities of theIncrease efficiency of all activities of the

organization besi es minimizing its risks.organization besi es minimizing its risks.


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Corporate Social ResponsibilityCorporate Social Responsibility

(CSR)(CSR)

Definition of CSRDefinition of CSR:: --

Corporate social responsibility isCorporate social responsibility is

all about how companies manage theall about how companies manage the

business processes to produce an overallbusiness processes to produce an overallpositive impact on society.positive impact on society.


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Introduction to CSRIntroduction to CSR

Corporate Social Responsibility is theCorporate Social Responsibility is the

continuing commitment by business tocontinuing commitment by business to

behave ethically and contribute tobehave ethically and contribute toeconomic development while improving theeconomic development while improving the

quality of life of the workforce and theirquality of life of the workforce and their

families as well as of the local communityfamilies as well as of the local communityand society at large.and society at large.


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CSR in IndiaCSR in India

A survey carried out by The Times foundationA survey carried out by The Times foundationin 2008, revealed that over 90% of Indianin 2008, revealed that over 90% of Indianorganizations were involved in CSR initiatives inorganizations were involved in CSR initiatives inareas like:areas like: --

EducationEducation

HealthHealth

Livelihood creationLivelihood creation Skill development andSkill development and

Empowerment of the women.Empowerment of the women.


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Notable efforts have come from Tata Group,Notable efforts have come from Tata Group,

Infosys, Satyam, Bharti Enterprises, Coco ColaInfosys, Satyam, Bharti Enterprises, Coco Cola

India, Pepsi co and ITC Welcome Group amongIndia, Pepsi co and ITC Welcome Group amongothers.others.

Corporate India has spread its CSR activitiesCorporate India has spread its CSR activities

across 20 states with Maharashtra gaining theacross 20 states with Maharashtra gaining themost from them. About, 36% of the CSRmost from them. About, 36% of the CSR

activities are concentrated in it.activities are concentrated in it.


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In a study undertaken by automotive researchIn a study undertaken by automotive researchcompany TNS, India has been ranked secondcompany TNS, India has been ranked secondin global CSR, with Thailand being the first.in global CSR, with Thailand being the first.

Assochamd s cAssochamd s c Eco Pulse Stu yE o Pulse Stu y on CSRon CSRfor 2009for 2009--10 release in June 2009, foun10 release in June 2009, founthat over 300 orporate houses on anthat over 300 orporate houses on an

aggregate have i entifie 26 ifferent themesaggregate have i entifie 26 ifferent themesfor their CSR initiatives.for their CSR initiatives.


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ExamplesExamples

The Paint Industry is making its products moreThe Paint Industry is making its products more

environmental friendly by opting for water basedenvironmental friendly by opting for water based

paints that are Carcinogen free.paints that are Carcinogen free. The Heating, Ventilation, Air conditioning andThe Heating, Ventilation, Air conditioning and

Refrigeration (HVAC) industry is working to getRefrigeration (HVAC) industry is working to get

rid of its c global warmerd stigma throughrid of its c global warmerd stigma through

greater use of gases with zero ozone depletiongreater use of gases with zero ozone depletionpotential (Zero DPP).potential (Zero DPP).


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Sustainable Technologies and EnvironmentalSustainable Technologies and Environmental

Projects ltd (STEPS) is planning to start aProjects ltd (STEPS) is planning to start a

project to change plastic, organic and electronicproject to change plastic, organic and electronicwaste into petroleum without the usual harmfulwaste into petroleum without the usual harmful

residue.residue.

HDFC has started aHDFC has started a c village adoptiondc village adoptiond schemescheme

to improve the investment climate in In ianto improve the investment limate in In ian

Villages.Villages.


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Arguments against CSRArguments against CSR

Economic Institution:Economic Institution: -- Business is theBusiness is theeconomic institution of the society. Its purposeeconomic institution of the society. Its purposeis to make the best use of resources andis to make the best use of resources and

generate profits.generate profits. Lack of Knowledge:Lack of Knowledge: -- Social responsibility is aSocial responsibility is a

vague concept and very difficult to formulatevague concept and very difficult to formulatespecific and measurable goals.specific and measurable goals.

Accountability:Accountability: -- Managers are not accountableManagers are not accountableto society and hence there could be misuse ofto society and hence there could be misuse ofpower, authority and resources.power, authority and resources.


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Taxing the share holders:Taxing the share holders:-- In the name of CSR,In the name of CSR,managers may indirectly be responsible formanagers may indirectly be responsible for

taxing share holders by utilizing profits belongingtaxing share holders by utilizing profits belongingto them for the welfare of society.to them for the welfare of society.

Power:Power: -- The acceptance of responsibility wouldThe acceptance of responsibility wouldautomatically lead to the assumption of authorityautomatically lead to the assumption of authority

and there could be an expansion of the horizonsand there could be an expansion of the horizonsof corporate power in the name of CSR.of corporate power in the name of CSR.


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Arguments favoring CSRArguments favoring CSR

SubSub--System:System:-- Business organizations are subBusiness organizations are subsystems of society performing an essentialsystems of society performing an essentialfunction needed by society, namely the supplyfunction needed by society, namely the supplyof economic goods and services. It has toof economic goods and services. It has todischarge its functions with reference to socialdischarge its functions with reference to socialexpectations and demands. Hence, Businessesexpectations and demands. Hence, Businessesmust accept CSR.must accept CSR.


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Better Image:Better Image: -- A firm which accepts CSR canA firm which accepts CSR can

gain the approval and appreciation of all sectionsgain the approval and appreciation of all sectionsof society.of society.

Avoidance of problems:Avoidance of problems: -- A firm which reducesA firm which reduces

to act responsibly in dealing with society willto act responsibly in dealing with society will

face opposition from all sections of society.face opposition from all sections of society. Attraction and retention of good employees:Attraction and retention of good employees: --

Employees are the most valuable assets of aEmployees are the most valuable assets of a

company. A socially responsible company with itscompany. A socially responsible company with its

good image can attract and retain goodgood image can attract and retain goodemployees.employees.


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ConclusionConclusion

Corporate Governance and SocialCorporate Governance and Social

responsibility help an organization toresponsibility help an organization to

Increase its efficiency besides minimizingIncrease its efficiency besides minimizingits risks. They are the best ways to restoreits risks. They are the best ways to restore

public confidence in an organization andpublic confidence in an organization and

build a prosperous future.build a prosperous future.


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Any QueriesAny Queries


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29128808 Corporate Governance CSR

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