CORPORATE SOCIAL

RESPONSIBILITY
NMIMS-20 NOV 2011

PART I
WHAT IS CSR?
WHY IS IT REQUIRED
IMPACT OF GLOBALIZATION
INTEGRATION OF FINANCIAL MARKETS
CHANGES IN GOVERNANCE STRUCTURES
IT REVOLUTION
MULTI COUNTRY PRODUCTION OF GOODS
EFFECT ON SMES
MIGRATION OF WORK FORCE
INJUDICIOUS USE OF RESOURCES
CLOUT DISPLAYED BY FINANCIAL INSTITUTIONS
IRRESPONSIBLE BEHAVIOUR BY MNCS
ROLE OF BUSINESS IN
SUSTAINABLE DEVELOPMENT
COLLABORATION WITH SOCIETY AND
GOVT TO CREATE A QUALITATIVELY
BETTER WORLD TO LIVE IN
BUSINESS IS DEPENDENT ON
SOCIETY FOR GROWTH AND
PROSPERITY
STAKEHOLDER CONCEPT
SYSTEMS APPROACH
OWNERSHIP CONCEPT
STAKEHOLDER TYPES
LATENT-DORMANT, DISCRETIONARY
AND DEMANDING
EXPECTANT-DOMINANT,DANGEROUS
DEPENDENT.
DEFINITIVE
NON-STAKEHOLDERS
CHALLENGES IN STAKEHOLDER
ENGAGEMENT
ASSESSING KEY STAKEHOLDERS AND
THEIR CONCERNS
EFFECTIVE MANAGEMENT
PROGRAMMES,MEASUREMENT AND
COMMUNICATION OF PERFORMANCE
RESPONSE TO STAKEHOLDER VIEWS
COMMUNICATION OF VALUES
CONSISTENT AND ACCURATE
INFORMATION
COMMITMENT AND ACCOUNTABILITY
MILLENNIUM DEVELOPMENT
GOALS
ERADICATE EXTREME POVERTY AND
HUNGER
ACHIEVE UNIVERSAL PRIMARY EDUCATION
PROMOTE GENDER EQUALITY AND
EMPOWER WOMEN
REDUCE CHILD MORTALITY
IMPROVE MATERNAL HEALTH
COMBAT HIV/AIDS,MALARIA AND OTHER
DISEASES
ENSURE ENVIRONMENTAL SUSTAINABILITY
GLOBAL PARTNERSHIP FOR DEVELOPMENT
ENVIRONMENTAL
SOCIAL
ECONOMIC
THE TRIPLE BOTTOM LINE
WHAT IS CSR?
CORPORATE SOCIAL RESPONSIBILITY
ENCOMPASSES THE ECONOMIC,
LEGALETHICAL AND PHILANTHROPIC
EXPECTATIONS PLACED ON
ORGANIZATIONS BY SOCIETY AT A GIVEN
POINT OF TIME
CORPORATE SOCIAL RESPONSIVENESS
REFERS TO THE CAPACITY OF A
CORPORATION TO RESPOND TO SOCIAL
PRESSURES
WHAT IS CSR
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.
WORLD BUSINESS COUNCIL FOR SUSTAINED
DEVELOPMENT
SOME FACTS
WHILE 94% OF THE COMPANIES BELIEVE
THAT DEVELOPMENT OF CSR STRATEGIES
CAN DELIVER REAL BUSINESS BENEFITS
ONLY 11% MADE ANY SIGNIFICANT
PROGRESS IN IMPLEMENTING STRATEGY
IN THE ORGANIZATION
CEOS ARE FAILING TO RECOGNIZE THE
BENEFITS OF IMPLEMENTING CSR
STRATEGIES DESPITE INCREASING
PRESSURES TO DO SO
CSR PROGRAMMES INFLUENCE 70% OF
ALL CUSTOMER PURCHASING DECISIONS

EMERGING TRENDS
DRIVERS ARE PHILANTHROPY, IMAGE BUILDING,
EMPLOYEE MORALE AND ETHICS(IN THAT ORDER)
CSR AN EXTENSION OF PHILANTHROPY
FOUR MODELS CO-EXIST IN INDIA- THE ETHICAL
MODEL, THE STATIST MODEL,THE LIBERAL MODEL
AND THE STAKEHOLDER MODEL
BRAND QUALITY MORE IMPORTANT THAN CSR
BANKING TOPS IN THE LIST OF CSR ACTIVITIES
WHILE CONSTRUCTION IS AT THE BOTTOM
INCLUSIVE GROWTH

THEORIES OF CSR
FRIEDMAN
CONTRACT THEORY
SOCIAL JUSTICE THEORY
RIGHTS THEORY
DEONTOLOGICAL THEORY
STAKEHOLDER THEORY
TRUSTEESHIP THEORY
CASE FOR CSR
GOVERMENTAL FAILURE/DECREASE IN
GOVERNMENTAL INFLUENCE
INCREASING POWER AND INFLUENCE
OF CORPORATIONS
NEED FOR CORPORATE
ACCOUNTABILITY
NEED FOR TRANSPARENCY
CORPORATE CITIZENSHIP

THE STAKEHOLDER
CONCEPT
LEGALLY BINDING CONTRACTS
RIGHTS AND CLAIMS TO
CORPORATIONS
PROTECTION OF EMPLOYEE
RIGHTS
SPECULATIVE INTERESTS OF
SHAREHOLDERS
STAKEHOLDER S ABILITY TO
INFLUENCE CORPORATE
DECISIONS
CORPORATE GOVERNANCE

philanthropic
ethical
legal
economic
Desired by society
Expected by society
Required by society
Required by society
CARROLLS 4 PART MODEL
NOVARTIS
CORPORATE CITIZENSHIP AT NOVARTIS
BEGINS WITH THE SUCCESS OF OUR CORE
BUSINESS.THE MORE WE ARE SUCCESSFUL
IN THE DISCOVERY,DEVELOPING,
MANUFACTURING AND MARKETING OF NEW
MEDICINES,THE GREATER THE BENEFITS WE
CAN OFFER TO ASSOCIATES AND
SHAREHOLDERS, PATIENTS, HEALTH CARE
PROFESSIONALS AND OTHER KEY
STAKEHOLDERS.
ARGUMENTS FOR AND AGAINST
CSR
FOR
CREATING SHAREHOLDER VALUE
REPUTATION
STRATEGIC BRANDING
OP EFFICIENCY
PRODUCTIVITY AND QUALITY
ACCESS TO NEW MARKETS
HUMAN AND INTELLECTUAL CAPITAL
CONTD---
AGAINST
MONEY RIGHTFULLY BELONGS TO
SHAREHOLDERS
POLITICIANS MUST DEAL WITH
SOCIAL ISSUES
INVESTMENT ON CORE BUSINESS
MORE A PUBLICITY STUNT
POWER AND RESPONSIBILITY DO NOT
NECESSARILY GO HAND IN HAND
THIS IS HALLMARK
WE BELIEVE
THAT OUR PRODUCTS AND SERVICES MUST ENRICH
PEOPLES LIVES AND ENHANCE THEIR RELATIONSHIPS
THAT CREATIVITY AND QUALITY IS ESSENTIAL TO
SUCCESS
THAT THE PEOPLE OF HALLMARK ARE OUR
COMPANYS MOST VALUABLE RESOURCE
THAT DISTINGUISHED FINANCIAL PERFORMANCE IS A
MUST
THAT OUR PRIVATE OWNERSHIP SHOULD BE
PRESERVED
THE VALUES THAT GUIDE US ARE---
EXCELLENCE IN ALL WE DO
ETHICAL AND MORAL CONDUCT AT ALL
TIMES
INNOVATION IN ALL AREAS OF
BUSINESS AS A MEANS OF ATTAINING
AND SUSTAINING LEADERSHIP
CSR TO EACH COMMUNITY IN WHICH
WE OPERATE
PART II
DEVELOPING A CSR
STRATEGY
CSR ASSESSMENT
ORGANIZATIONS VALUES AND ETHICS
EXTERNAL AND INTERNAL DRIVERS
KEY CSR ISSUES THAT COULD AFFECT THE
ORGANIZATION
KEY STAKEHOLDERS
CURRENT CORPORATE DECISION MAKING
STRUCTURE
HUMAN RESOURCES AND BUDGETARY
IMPLICATIONS
EXISTING CSR INITIATIVES
ASSESS BY---
ASSEMBLING A CSR TEAM
DEVELOP A WORKING DEFINITION OF
CSR
REVIEW CORPORATE DOCUMENTS,
PROCESSES AND ACTIVITIES
IDENTIFY AND ENGAGE KEY
STAKEHOLDERS

DEVELOP STRATEGY BY---
BUILD SUPPORT WITH SENIOR
MANAGEMENT AND EMPLOYEES
RESEARCH WHAT BUSINESS IS DOING
PREPARE A MATRIX OF PROPOSED
CSR ACTIONS
DEVELOP ACTIONS AND THE
BUSINESS CASE FOR THEM
DECIDE ON DIRECTION,APPROACH
AND FOCUS AREAS.
POSSIBLE BUSINESS CASE
LEVERAGING CSR
COMPETITIVE ADVANTAGE
STAKEHOLDER INFLUENCE
SHORT AND LONG TERM GOALS
COSTS VS BENEFITS
CHANGES ORG MAY BE REQD TO
MAKE
RISKS/THREATS


IMPLEMENTING CSR STRATEGY
DEVELOP AN INTEGRATED CSR DECISION MAKING
STRUCTURE
PREPAREAND IMPLEMENT CSR BUSINESS PLAN
SET MEASURABLE TARGETS AND IDENTIFY
PERFORMANCE MEASURES
ENGAGE THOSE TO WHOM CSR COMMITMENTS
APPLY
DESIGN AND CONDUCT CSR TRAINING
ESTABLISH MECHANISMS FOR ADDRESSING
PROBLEMATIC BEHAVIOUR
CREATE INTERNAL AND EXTERNAL
COMMUNICATION PLAN
AREAS OF CSR IMPLEMENTATION
ACCOUNTABILITY
ECO DEVP
ENVIRONMENT
LABOUR/HUMAN
RTS
HR
CG
ETHICS
CSR
CSR AT WORKPLACE
REMUNERATION
ETHICAL HR PRACTICES
HEALTH/SAFETY
WORK LIFE BALANCE
AGE OF EMPLOYEES
DOWNSIZING
DIVERSITY IN WORK CULTURE
PRIVACYCONCERNS FOR FREEDOM
CONSISTENCY ACROSS DIFFERENT WORK
ENVIRONMENTS
TELECOMMUTING/WORKING FROM HOME
WOMEN AT THE WORKPLACE
CSR AND THE ENVIRONMENT
AIR POLLUTION
WATER POLLUTION
SOIL POLLUTION
DEGRADATION OF THE ENVIRONMENT
DESTRUCTION OF LIVELIHOOD
INDUSTRIAL ACCIDENTS/WASTE
DISPOSAL
E WASTE
CSR INTERVENTIONS
EMPLOYEE VOLUNTEERING
INFRASTRUCTURAL SUPPORT
FINANCIAL SUPPORT
PRODUCT/SERVICE SUPPORT
IMPORTANCE OF NGO PARTNERSHIPS
INVOLVE GOVT AND NGOS
CHOOSE NGOS DISPLAYING COMPETENCE
AND GOOD RESULTS OVER TIME
CAPABILITY TO ADVANCE PROJECTS ON A
LARGE SCALE
REPUTATION/RELIABILITY
PROFESSIONALLY MANAGED
PREDOMINANT POSITION IN SECTOR
INDEPENDENCE FROM COMPANY AND
AUTHORITIES
PART III
CSR MONITORING,
MEASUREMENT AND
REPORTING
MONITORING AND
MEASUREMENT
MONITORING THROUGH NGOS
EMPLOYEE LOYALTY
CSR COMMITTEE
PERFORMANCE
PERFORMANCE INDICATORS
GLOBAL REPORTING INITIATIVES
KPIS
ACCOUNTABILITY 1000 SERIES
TBL
REPORTING
CORPORATE SUSTAINABILITY REPORT
INTERNAL AND EXTERNAL STAKEHOLDERS
INFORMATION ABOUT CHALLENGES
AND ACHIEVEMENTS
COMMITMENT TO ENVIRONMENTAL AND
SOCIAL RESPONSIBILITY
PERFORMANCE-CODE OF CONDUCT,
CG,MITIGATION OF RISKS
ENVIRONMENT MGT
MEASUREMENT AND
MONITORING TOOLS
EMPLOYEE AND CUSTOMER SURVEYS
PUBLIC ATTITUDE AND TRUST SVYS
EMPLOYEE SAFETY
WASTE MGT
POSITIVE AND NEGATIVE MEDIA
COVERAGE
PEER AND EXPERT EVALUATION
IMAGE AMONG FINANCIAL ANALYSTS AND
REGULATORS
PERCEPTION AMONGST STAKEHOLDERS
CSR PROGRAMMES
EDUCATION
HEALTH
LIVELIHOOD CREATION
SKILL DEVELOPMENT
EMPOWERMENT OF WEAKER
SECTIONS
ENVIRONMENT

COMPANIES TAKING CSR
INITIATIVES
TATA GROUP
INFOSYS
BHARTI ENTERPRISES
HCL
ITC WELCOME GROUP
ONGC
SAIL
ORCHID CHEMICALS AND PHARMA
NDTV
AIRCEL
SOME INITIATIVES
IBM- UPLIFTMENT OF TRIBALS IN SASAN
INDIAN PAINT INDUSTRY MAKING PAINTS MORE
ENVIRONMENT FRIENDLY
FINANCIAL SERVICES-NEASING OF CARBON FOOTPRINTS-
RENEWABLE ENERGY ETC- HSBC, MAX NEWYORK LIFE, SCB
E CHAUPAL
ADOBE, KPMG, PROMOTING ENTREPRENEURSHIP
RELIANCE- PROJECT DRISHTI
NDTV-GREENATHON
AIRCEL-SAVE THE TIGER
COPENHAGEN- ENVIRONMENT ISSUES
E WASTE MANAGEMENT

PART IV
CORPORATE
GOVERNANCE
CORPORATION
A CORPORATION IS AN ARTIFICIAL BEING, INVISIBLE,
INTANGIBLE,EXISTING ONLY IN THE CONTEMPLATION OF THE
LAW. BEING THE MERE CREATURE OF THE LAW,IT POSSESSES
ONLY THREE QUALITIES WHICH THE CHARTER OF ITS
CREATION CONFERS UPON IT, EITHER EXPRESSLY OR AS
INCIDENTAL AS ITS VERY EXISTENCE----(THE MOST)IMPORTANT
ARE IMMORALITY AND, IF THE EXPRESSION MAY BE
ALLOWED,INDIVIDUALITY:PROPERTIES BY WHICH A PERPETUAL
SUCCESSION OF MANY PERSONS ARE CONSIDERED AS THE
SAME, AND MAY ACT AS A SINGLE INDIVIDUAL.
ROLE OF CORPORATE
GOVERNANCE`
o STRONG VS WEAK PERFORMANCE
o PUBLICLY OWNED BUSINESS VS PRIVATELY OWNED BUSINESS
o PROSPECT OF ATTRACTING LONG TERM, STABLE CAPITAL
o INCLUDES QUESTIONS OF STRATEGY,VISION OF TOP
MANAGEMENT,TRANSPARENCY,CODE OF CONDUCT, STDS OF
PERFORMANCE, ACCOUNTABILITY ETC
o DIRECTION OF BUSINESS PERFORMANCE
o MEETING STAKEHOLDER INTEREST
o RECONCILIATION OF CONFLICTING INTERESTS
o SYSTEMS FOR ACCOUNTING, AUDITING AND FISCL DISCIPLINE
o MANAGER DISCIPLINE
Concept of Corporate
Governance
CG aims at enhancement of shareholder value,
keeping in view the interests of other
stakeholders.
CG may be defined as a set of systems,
processes and principles which ensure that a
Company is governed in the best interests of all
the stakeholders.
Objectives of Corporate
Governance
Define clearly the rights, roles,
responsibilities and accountability of all
stakeholders.
Continuous disclosure of material
information - financial & non-financial.
High quality accounting practices.
Protect investors interest.
Objectives of Corporate
Governance (Contd)
High level of transparency.
Make Corporate boards an active body for CG.
Bring about high level of public confidence in
business and industry.
GOVERNANCE AND MANAGEMENT
BOARD NOT PART OF THE MANAGEMENT
STRUCTURE
LINE AND STAFF MANAGERS REPORT TO THE
CEO WHO HAS OVERALL RESPONSIBILITY
BOARD HAS BOTH EXECUTIVE AND NON
EXECUTIVE /OUTSIDE DIRECTORS
EXECUTIVE DIRECTORS HOLD A
MANAGERIAL ROLE
INDEPENDENT DIRECTORS HAVE NO
RELATION WITH THE COMPANY
ADDING TEETH TO
CORPORATE GOVERNANCE
STRIVING TO ENSURE THAT CODE OF CONDUCT IS
UNDERSTOOD AND ADHERED TO BY ALL MEMBERS
OF THE ORGANIZATION
PERFORMANCE MANAGEMENT SYSTEM SHOULD
RECOGNIZE AND REWARD ETHICAL BEHAVIOUR
EXCLUSIVE BACKGROUND CHECKS ON SENIOR
MANAGEMENT OF THE ORGANIZATION
SCREENING OF THIRD PARTIES WITH WHOM
COMPANY DOES BUSINESS
SCOPE OF WHISTLEBLOWER POLICIES EXTENDED
TO WIDER STAKEHOLDER GROUPS
INVESTORS, LENDERS ANALYSTS SHOULD
PROACTIVELY CHALLENGE CG PRACTICES
CONTD
CHAIRMEN OF BOARDS SHOULD ACTIVELY MONITOR
HOW INDIVIDUAL DIRECTORS PROACTIVELY
IDENTIFYING AND FULFILLING THEIR KNOWLEDGE
AND COMPETENCY LEVELS
COMPULSORY ATTENDANCE ON BOARD MEETINGS
MANDATORY BOARD AND AUDIT COMMITTEE
EVALUATIONS
HEFTY MONETARY PENALTIES ON INDEPENDENT
DIRECTORS AND AUDITORS WHO DO NOT CARRY
OUT THEIR JOBS


SOX ACT 2002
PENALTY FOR CORPORATE FRAUD- UPTO 20 YRS
IMPRISONMENT FOR ALTERING/DESTROYING
DOCUMENTS
CEOs LIABLE FOR UPTO 20 YRS IMPRISONMENT
WITH FINES UPTO USD 5 MN FOR CERTIFYING
FALSE ACCOUNTS
TIME PD FOR ENGAGING IN LAW SUITS BY
DEFRAUDED INVESTORS ENHANCED
ACCTG FIRMS AND CONSULTACY/NON AUDIT
SERVICES
ACCTG PROFESSION TO BE UNDER STRICT
SCRUTINY BY 5 MEMBER PVT SECTOR BOARD
WHICH WILL HAVE DISCIPLINARY AS WELL AS
COURT/SUBPOENA POWERS
CADBURY REPORT
PUBLISHED 1992-COMMITTEE CHAIRED BY SIR ADRIAN CADBURY
REPORT RECOMMENDATIONS ADOPTED BY EU,THE US AND THE
WORLD BANK
BACKGROUND- MAXWELL GROUP OF COMPANIES
PUBLICALLY TRADED CORPORATIONS SHOULD HAVE THREE
OUTSIDE DIRECTORS
POSITIONS OF CEO/CHAIRMAN BY DIFFERENT PEOPLE
SUPREMACY OF THE BOARD, ITS INTEGRITY AND ACCOUNTABILITY.
LISTED COMPANIES TO ANNUALLY REPORT TO THE SHARE
HOLDERS AS RGARDS ASSESSMENT OF RISKS AND THE
PROCESSOF DECISION MAKING
INDEPENDENT DIRECTOR SHOULD NOT SERVE FOR MORE THAN
TWO TERMS
FINES AND JAIL TERMS FOR FRAUD
CADBURY COMMITTEE
REPORT
May 1991- Code Of best practices
Bd Should meet regularly, retain full and
effective control over the company ,
monitor the executive management
Clearly accepted division of
responsibilities
Non Executive Directors of sufficient
calibre and number


contd
Agreed procedure for furtherance of duties
of the Directors
All Directors should have access to the
advice and services of the Company
Secretary
Non Independent directors should have
independent judgement on issue regarding
strategy, performance,resources , key
appts etc
LEGAL OBLIGATIONS OF
DIRECTORS
REPRESENTING THE INTEREST OF
OWNERS
SCRUTINY OF STAKEHOLDERS
THE FIDUCIARY DUTIES
THE DUTY OF LOYALTY AND FAIR DEALING
DUTY OF CARE
DUTY NOT TO ENTRENCH
DUTY OF SUPERVISION
DEALING WITH HOSTILE TAKEOVER
OFFERS