Arvin Raňola BSENTOUMN 2-9

MANA3113 Feb. 16, 2019

1. Corporate Social Responsibility Policy

Operating in a responsible and sustainable manner is important to InvenSense. While
we run our business in line with the expectations of diverse global stakeholders, we also
see corporate responsibility as a discipline that helps us manage risks and maximize on
the opportunities available to us in a changing world. Our Corporate Governance
Policies are intended to provide a framework for the governance of Invensense and
adherence to our policies and related operating procedures is the responsibility of every
Invensense Director, Officer and Employee.

We are committed to understanding, monitoring and managing our social,

environmental and economic impact to enable us to contribute to society’s wider goal of
sustainable development. This commitment is deeply ingrained in our core values and
we aim to demonstrate these responsibilities through our actions and within our
corporate policies.

At InvenSense, we define Corporate Social Responsibility as follows:

• Conducting business in a socially responsible and ethical manner;

• Protecting the environment and the safety of people;
• Supporting human rights; and
• Engaging, learning from, respecting and supporting the communities and
cultures within which we work.

In alignment with our Statement on Business Conduct and Ethics, InvenSense will
ensure that all matters of Corporate Social Responsibility are considered and supported
in our operations and administrative matters and are consistent with InvenSense
stakeholders’ best interests. InvenSense is committed to being recognized as a leader in
the field of Corporate Social Responsibility and recognizes that in doing so, we will add
significant value for our shareholders.

This Policy applies to activities undertaken by or on behalf of InvenSense, Inc.

All InvenSense employees, suppliers and contractors are to adopt the Corporate Social
Responsibility considerations described in this policy into their day-to-day work
activities. InvenSense leaders are to act as role models by incorporating these
considerations into decision-making in all business activities. InvenSense leaders are to
ensure that appropriate organizational structures are in place to effectively identify,
monitor, and manage Corporate Social Responsibility issues and performance relevant
to our business.

This Policy is built on the following areas that reflect existing and emerging standards
of Corporate Social Responsibility:

Business Ethics and Transparency

 InvenSense is committed to maintaining the highest standards of integrity and
corporate governance practices in order to maintain excellence in its daily
operations, and to promote confidence in its governance systems.
 InvenSense will conduct its business in an open, honest, and ethical manner.
 InvenSense recognizes the importance of protecting all of our human, financial,
physical, informational, social, environmental, and reputational assets.
 InvenSense will advise its partners, contractors, and suppliers of its Corporate
Social Responsibility Policy, and will work with them to achieve consistency
with this policy.
 InvenSense is committed to measuring, auditing and tracking the performance of
its Corporate Social Responsibility programs.

Environment Health & Safety

InvenSense is committed to protecting the health and safety of all individuals affected
by our activities, including our employees, contractors and the public. InvenSense will
provide a safe and healthy working environment, and will not compromise the health
and safety of any individual. Our goal is to have no accidents and mitigate impacts on
the environment by working with our stakeholders, peers and others to promote
responsible environmental practices and continuous improvement.

InvenSense is committed to environmental protection and stewardship.

InvenSense recognizes that pollution prevention, biodiversity and resource
conservation are key to a sustainable environment, and will effectively integrate these
concepts into its business decision-making.

All employees and contractors are responsible and accountable for contributing to a safe
working environment, for fostering safe working attitudes, and for operating in an
environmentally responsible manner.
As a member of the Electronic Industry Code of Conduct (EICC), InvenSense has
integrated key requirements of Social Accountability (SA) in Electronic Industries and
has committed to:

1. Fully supporting the EICC and all applicable regulations, including the EU Directive
of Restriction of Hazardous Substance (RoHS), and promoting social and
environmental concerns with manufacturing partners within our supply chain.
2. Promising to conserve our environment by managing and mitigating the impact of
harmful substances, as defined by industry standards, in its material and
manufacturing processes.
3. Exercising due diligence within our supply chain to assure that all gold (Au),
tantalum (Ta), tin (Sn), and tungsten (W) metals used in our products are “DRC
Conflict-Free”, not derived from, or sourced from, mines in conflict areas of DRC or
adjoining countries, or illegally taxed on trade routes, either of which are controlled
by non-governmental military groups, or unlawful factions.
4. Being a socially and environmentally conscious company, operating in full
compliance with the local laws and regulations regarding the ethical, corporate
governance, labor, health and safety, and environmental compliance of the countries
within which we conduct business.

Stakeholder Relations
As a global supplier to customers worldwide, InvenSense operates across a diverse
range of cultures and international markets. We are proud of our commitment to apply
fair labor practices, while respecting the national and local laws of the countries and
communities where we operate and are committed to providing equal opportunity in
all aspects of employment. We do not engage in or tolerate unlawful workplace
conduct, including discrimination, intimidation, or harassment.

InvenSense works with our suppliers to help them treat their workers and employees
fairly and with dignity and respect, maintain safe working conditions, and conduct
manufacturing activities in an environmentally safe and responsible manner.
InvenSense does not tolerate human rights abuses, human trafficking and/or slavery,
and will not engage or be complicit in any activity that solicits or encourages human
rights abuse. As part of this endeavor, we actively manage a Supplier Management
Procedure.
Community Involvement
InvenSense strives to understand and respect the cultural values and laws wherever we
operate. We actively support initiatives in those communities where our employees live
and work. This commitment is visible in our contributions of financial, equipment and
volunteer support. We encourage our employees to contribute time and energy in
leadership and other roles in community organizations.

2. Different organizations have created different grounds for defining Corporate Social
Responsibility (CSR). However, they do share one common ground on the basis of
which CSR can be described as a voluntary activity that a corporation does for its
employees and society as a whole as well as the environment around it for its
operations and functions. It is what the corporation gives back to the community
after using its resources to make profits.

Advantages Corporate Social Responsibility

 Improvement in the image of the Corporation
The most obvious advantage that a corporation can obtain by implementing CSR
policies is that of an increased goodwill value. This serves a dual purpose –
- Firstly, people will want to buy the product that the corporation is selling
because of its good and clean image.
- Secondly, other enterprises will want to do business and be associated with
the corporation. This increases the corporation’s prestige to such a high level
that its name may become synonymous with reliability and goodness.
People always want to be associated with the best and the most popular, so in
that respect, the corporation rises in stature and becomes an important player in
its market.

 Increased Attraction and Retention of Employees

- Companies having solid CSR commitments find it easier to recruit and retain
employees.
- People want to work for companies that care about the well-being of their
employees and provide good working conditions.
- Compassionate attitude towards employees is highly desired by both new
recruits and old employees alike.
- Appraisals, financial assistance in times of need, and attention given to
personal achievements and special days (like birthdays) make employees
want to remain with the company.
 - This is a huge advantage when there is a tight labor market situation. This
will reduce the cost of training new recruits and free up incentives for
existing employees.
- Incentives induce efficient work out from employees. In short, if the
company’s workforce is happy, the company gets more profits due to
increased efficiency in production.

 Regulatory Authorities become less hostile

- A corporation with strong CSR programs will not be scrutinized by
regulatory authorities as much as companies without CSR programs.
- The authorities will be lenient in their regulation because they feel that the
company must be complying with all regulations as it is supported by firms
and people alike for its welfare work.
- A company with strong CSR programs will always work within regulations
to get benefits (other than profits) from these CSR programs.
- The authorities will give fast-track preference to this company. It may also
forego cumbersome paperwork that is required to set up projects if it thinks
that this project is going to help the community to improve.

 Attracts more Capital Inflow from Various Sources

- A company’s image plays a huge role in attracting investors. If the company
is engaged in CSR programs, its image gets a massive boost, and so, people
invest in its operations heavily. This company will attract capital even from
abroad in the form of FII, thus, helping the country to get valuable foreign
exchange. It will also attract investment from other firms and industries, and
it will become a name that can be trusted easily.
- Even the Government of the country may be willing to invest in the company,
leading to lesser regulation and red-tapes.

 Generation of Clean and Renewable Energy from Environmental CSR

- If the company has invested in an environmental CSR program, it will make
sure that its operations do not harm the environment in any way. Inventing
machines and techniques to reduce the harmful effects of its operational
activities will give the community a clean environment. It will also give the
company a chance to explore the usage of renewable energy for its
operations.
- This will reduce the cost of acquiring fossil fuels and can reduce the cost of
production by a one-time investment in renewable energy production.
 Positive Publicity
- A popular business principle is that any publicity is good publicity. You
should be known to the people to sell your product. A good CSR program
will always give good publicity and even act as an advertisement for the
company.
- It also sets the company apart from its competitors. They may be selling a
similar product at lower rates, but you are keeping the interests of your
environment and community intact, and so the people do not mind a little
extra charge for this thoughtfulness.

Disadvantages Corporate Social Responsibility

 Shift from the Profit-Making Objective

- The company forgets about its obligations towards its shareholders that they
have to make profits for them. Instead of focusing on making profits, they
engage in CSR programs and use up funds for community welfare.

- So basically, instead of an income, the company is effecting an outflow of cash

and not fulfilling its profit-making obligations.

 Company Reputation takes a hit

According to CSR policies, companies have to disclose shortcomings of even

their own products if they are found to violate the CSR program.

For example, car manufacturing companies calling back their vehicles in large
numbers when they find glitches in the model after having sold them wallops
their reputation.

This creates inconvenience to the customers, and they lose trust in the
manufacturer.

 Customer Conviction
Initially, customers like to see the companies that they trust are engaged in social
welfare programs. They like the fact that these programs are for a good cause.
 Later, they grow wary of it. If they don’t see instant results from these programs,
they think that these are nothing but PR stunts. So it becomes difficult to
convince customers that the results will take some time in coming and that they
should continue believing in the good intentions of the company.

These attempts of convincing become fruitless day by day because some

customers are impatient and have a constant desire to be appeased.

 Increase in Cost of Production

More often than not, CSR programs increase the expenditure of the company.
This increased expenditure is reflected in the increased prices of the product for
which, ultimately, the customers have to pay.

Large corporations can absorb this increased expenditure. They may not increase
their products’ prices, but small businesses have no other option but to increase
their products’ prices to meet their increased expenses.