DEFINITION…..

Corporate social responsibility is a hard-edged business decision.

Not because it is a nice thing to do or because people are forcing
us to do it... because it is good for our business" - by Niall Fitzerald,
Former CEO, Unilever

The World Business Council for Sustainable Development proposes

a definition for CSR as:

‘the ethical behavior of a company towards society. ….management acting

responsibly in its relationships with other stakeholders who have a
legitimate interest in the business.’
And
‘CSR is the continuing commitment by business to behave ethically and
contribute to economic development while improving the quality of life of
the workforce and their families as well as of the local community and
society at large.’
 MEANING…..
Corporate social responsibility (CSR),a form of corporate self-
regulation integrated into a business model.

Ideally, CSR policy would function as a built-in, self-regulating

mechanism whereby business would monitor and ensure its
adherence to law, ethical standards, and international norms.

Business would embrace responsibility for the impact of their activities

on the environment, consumers, employees, communities,
stakeholders and all other members of the public sphere.

Furthermore, business would proactively promote the public interest

by encouraging community growth and development, and voluntarily
eliminating practices that harm the public sphere, regardless of
legality.

Essentially, CSR is the deliberate inclusion of public interest into

corporate decision-making, and the honoring of a triple bottom line:
People, Planet, Profit.
MAIN SOCIAL RESPONSIBILITIES
OF A BUSINESS
ORGANISATION…..
• Environment
• Women
• Customers
• Employee Welfare
• Education
• Prospects
• Community
• Government
• Livelihood
 SOME KEYWORDS….

• SRI : Socially
Responsible Investment

• TBL : Triple Bottom Line

People
Planet
Profit
 SOCIAL RESPONSIBILITIES
MODEL……
• Four Part Model !

• Carroll’s Corporate Social

Performance Model !

• The Three Domain Model !

 • Corporate contributions.
DESIRED of • Programs supporting community/education.
Philanthropic • Community involvement/improvement;
business by society volunteerism

• Avoid questionable practices.

• Respond to “spirit” of laws.
EXPECTED of • Assume law is a floor behaviour; operate above
Ethical business by society minimum required by law.
• Assert ethical leadership.

• Obey all laws; adhere to regulations.

• Environmental laws.
• Consumer laws.
REQUIRED of • Laws affecting all employees.
Legal
business by society • Obey Foreign Corrupt Practices Act.
• Fulfil all contractual obligations.

• Be profitable.
REQUIRED of • Maximise sales revenue.
Economic business by society • Minimize costs (administrative, production,
marketing, distribution).
• Make wise strategic decisions.
• Be attentive to dividend policy
 Philosophy of Social
Responsiveness
Proaction
Accommodatio
n Defence
Reaction

Discretionary
Responsibiliti
es
Ethical
Responsibilities Shareholder
s
Legal Occupational
Responsibilities Safety
Product
Economic Safety
Discriminatio
Responsibilities n
Environment
Consumerism
 REASONS FOR A BUSINESS TO BE
SOCIALLY RESPONSIBLE….

• Competitive advantage
• Better staff attraction and retention
• Investment
• Morale and culture
• Reputation
• Legal and regulatory reasons
• Legacy
 WHAT IS CORPORATE
GOVERNANCE…???

Corporate governance means that

company manages its business in a
manner that is accountable and
responsible to the shareholders. It
basically includes company’s
accountability to shareholders such as
employees, suppliers, customers and
local community.
 IMPORTANT ISSUES OF CORPORATE
GOVERNANCE……

• Composition of board of directors

• Role of board of directors

• Audit committee

• Shareholder’s committee
1. Composition of board of directors….

• Must contain a certain percentage of non

executive directors as they can exercise
independent judgment in the evaluation of
corporate policies.
• Should be selected through a formal process and
the board should decide their nomination.
• Financial institution should nominate those
persons as directors who can work independently
in the interest of the company and its
stakeholders.
 2. Role Of Board Of Directors…..

• To guide the management and to oversee

the operations of the company to sub
serve the interest of company’s
stakeholders.
• To ensure that the management complies
with the legal and ethical standards.
• Responsible for installing information and
control systems which can report failure of
management in discharging its
responsibility towards various
stakeholders of the company.
 3. Audit Committee…..

• An audit committee can create a climate of

discipline and control and reduce the opportunity
for fraud.
• Provides communication link with external
auditors and take steps to strengthen the position
of internal audit in the company.
і. not less than three member committee preferably
from non-executive directors. 
ii. Committee to meet at least once every quarter.
iii. CFO to attend meetings of Audit committee.
 4. Shareholder’s Committee……

The shareholders of a company are usually

widely scattered and are not able to attend
shareholder’s meetings. But they may have some
grievances against the company. In order to
attend to the grievances of shareholder’s, a
shareholders committee should be constituted.
such a committee should function under the
chairmanship of a non executive director.
 GOOD CORPORATE
GOVERNANCE…..
Limit the size of the board so that each director can contribute and avoid
coalitions.

Develop guidelines for the use of committees to ensure that basic tasks
are fulfilled and complex topics are explored in sufficient depth.

Separate the roles of CEO and Chairman to avoid potential conflicts of

interest.

Rotate directors through the various committees to ensure a mix of

views.
Avoid inside directors on the committees so that executives do not audit,
evaluate and reward themselves.
Ensure a number of outside directors so that tough questions are asked.
Limit the number of other boards the director can serve on.
Insist on regular attendance at board meetings by all directors.
Develop effective recruitment and evaluation processes for the board.
 SOME EXAMPLES THAT HAVE MADE A
BIG DIFFERENCE IN OUR SOCIETY…..
Four years ago, Reliance Industries Ltd. launched a
countrywide initiative known as “Project Drishti”, to restore the
eye-sights of visually challenged Indians from the
economically weaker sections of the society. This project,
started by one of India’s corporate giants has brightened up
the lives of over 5000 people so far.
Organisations like Bharath Petroleum Corporation
Limited, Maruti Suzuki India Limited, and Hindustan
Unilever Limited, adopt villages where they focus on
holistic development. They provide better medical and
sanitation facilities, build schools and houses, and help
the villagers become self-reliant by teaching them
vocational and business skills.
 Many CSR initiatives are executed by corporates in partnership with Non-
governmental organizations (NGOs) who are well versed in working with the
local communities and are experts in tackling specific social problems.

For example, SAP India in partnership with Hope Foundation, an NGO that
works for the betterment of the poor and the needy throughout India, has
been working on short and long-term rebuilding initiatives for the tsunami
victims. Together, they also started The SAP Labs Center of HOPE in
Bangalore, a home for street children, where they provide food, clothing,
shelter, medical care and education.