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Coursework title: Individual Assignment

2. Subject Code: MBAPML204

3. Subject Name: MANAGING FOR SUSTAINABILITY

4. Academic Year: 2018 June Start

5. Student First Name: VINOD

6. Student Last Name: KUMAR JAKHAR

7. Student ID No.: 180755118265

8. Student’s personal Email ID: vinod4dubai@gmail.com

What do you mean by Corporate Social Responsibility? Explain types of CSR.?

CORPORATE SOCIAL RESPONSIBILITY

Definition: Corporate social responsibility (CSR) is a self-regulating business model that helps a
company be socially accountable—to itself, its stakeholders, and the public. By practicing corporate
social responsibility, also called corporate citizenship, companies can be conscious of the kind of impact
they are having on all aspects of society, including economic, social, and environmental.

Corporate social responsibility (CSR) is a company’s commitment to manage the social, environmental
and economic effects of its operations responsibly and in line with public expectations.

It is part of a company’s approach to corporate governance and often touches every part of the
business—operations, human resources, manufacturing, supply chain, health and safety, and more.

CSR activities may include:

 Company policies that insist on working with partners who follow ethical business practices

 Reinvesting profits in health and safety or environmental programs

 Supporting charitable organizations in the communities where a company operates

 Promoting equal opportunities for men and women at the executive level

Some aspects of CSR may be required by law. For example, banks and hospitals are legally required to
protect people’s private information. Others are voluntary.

The benefits of CSR are many. Companies establish good reputations, attract positive attention, save
money through operational efficiency, minimize environmental impacts, attract top talent and inspire
innovation. Public companies often report on their CSR performance in their annual reports.

DIFFERENT TYPES OF CSR:

Corporate Social Responsibility initiatives are based on four different categories:

1. Ethical Responsibility

Ethical responsibility is about looking after the welfare of the employees by ensuring fair labor
practices for the employees and also the employees of their suppliers. Ethical labor practices for
suppliers mean that the companies will ensure the use of products that have been certified as meeting
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fair trade standards. Ensuring fair labor practices for employees mean that there will be no gender,
race or religious discrimination among the employees and each employee will be given equal pay for
equal work and better living wage compensation.

Here, a good example can be Google. Google employees have high levels of job satisfaction because
they are well compensated and well paid at work. The work environment at Google is supportive and
the company looks after the well being of its employees. Google offers free meal at work which saves a
lot of money from their wages. Google gives its employees free access to campus cafes, micro kitchens
and other options for breakfast, lunch, and dinner.

2. Philanthropic Responsibility:

Philanthropic responsibility means to serve the humanity. This criterion pays attention to the well
being of the unprivileged or needy people who badly require our support to sustain on this planet.
Companies fulfill their philanthropic responsibility by donating their time, money or resources to
charities and organizations at national or international levels. These donations are mainly given to a
variety of worthy causes including human rights, national disaster relief, and clean water and
education programs in underdeveloped countries.

No other business tycoon has fulfilled the philanthropic responsibilities better than Bill Gates. Bill
Gates has donated billions of dollars to the Bill and Melinda Gates Foundation, which supports
numerous causes including education, the eradication of malaria and agricultural developments etc.

3. Environmental Responsibility:

Currently, we need to focus on two main areas of our environment: limiting pollution and reducing
greenhouse gases. Companies are bound to fulfill their economic responsibility because awareness of
environmental issues are growing largely among the consumers and today they want businesses to
take necessary steps to save our planet and preserve all the lives in it. Companies that are concerned
about reducing air, land and water pollution have increased their standing as good corporate citizens
while benefiting the society.

An example of environmental responsibility is Tesla Motors that design cars combining style,
acceleration and handling with advanced technologies in order to make it more environmental friendly
and reduce pollutions. Tesla cars do not need gasoline refueling and it can be charged at home.

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 4. Economic Responsibility:
Economic responsibility is an interconnected field which focuses to strike a balance between business,
environmental and philanthropic practices. Economic responsibility abides by, the set standards of
ethical and moral regulations. In this context, companies try to find out a solution which can facilitate
their business growth and generate profits by benefitting the community and our society.

Here economic decisions are made by considering their overall effects on society and businesses at the
same time. Hence, economic responsibility can improve business operations while engaging in
sustainable practices.

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Explain the key issues in Corporate Governance.?

Corporate governance has been defined in different ways by different writers and organisation’s. Some
define it in a narrow perspective to include in it only the shareholders, while others want it to address
the concerns of all stakeholders. Some talk about corporate governance being an important instrument
for a country to achieve sustainable economic development, while others consider it as a corporate
strategy to achieve a long tenure and a healthy imagine. But to all, corporate governance is a means to
an end, the end being long term shareholder, and more importantly, stakeholder value. Thus, all
authorities on the subject are one in recognizing the need for good governance practices to achieve
the end for which corporate are formed. Some governance issues are identified as being crucial and
critical to achieve these objectives.

These are:

1) Distinguishing the roles of board and management:

Constitutions of more and more company’s stress and underline that the business is to be managed
"by or under the direction of" the board. In such a practice, the responsibility for managing the
business is delegated by the board to the CEO, who in turn delegates the responsibility to other senior
executives. Thus, the board occupies the key position between the shareholders (owners) and the
company's management (day-to-day managers of the company).

2) Separation of the roles of the CEO and chairperson:

The composition of the board is a major issue in corporate governance as the board acts as a link
between the shareholders and the management and its decisions affect the performance of the
company. All committees that studied corporate governance practices all over the world, starting with
the Cadbury committee, have suggested various improvements in the composition of boards of
companies. It is now increasingly being realised that the practice of combining the role of the
chairperson with that of the CEO as is done in countries like the US and India leads to conflicts in

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decision making and too much concentration of power in one person resulting in unsavoury
consequences. Combining the role of both the CEO and chairperson removes an important check on
senior management's activities. This is the reason why many authorities on corporate governance
recommend strongly that the chairman of the Board should be an independent director in order to
"provide the appropriate counterbalance and check to the power of the CEO"

3) Directors and executive's remuneration:

This is one of the mixed and vexed issues of corporate governance that came into the limelight during
the massive corporate failures in the US between 2000 and 2002. Executive compensation has also in
recent time become the most viable and politically sensitive issue relating to corporate governance.
According to the Cadbury report: "The over- riding principle in respect of Board remuneration is that
shareholders are entitled to full and clear statement of directors present and future benefits, and how
they have been determined." Other committees on corporate governance have also laid emphasis on
other related issues such as " pay-for performance", heavy severance payments, pension for non-
executive directors, appointment of remuneration committee and so on.

4) Disclosure and audit:

The OECD lays down a number of provisions for the disclosure and communication of "key facts" about
the company to its shareholders. The Cadbury Report termed the annual audit as "one of the
cornerstones of corporate governance". Audit also provides a basis for reassurance for everyone who
has a financial stake in the company. There are several issues and questions relating to auditing which
have an impact on corporate governance. There are, for instance, questions such as: (i) How to ensure
independence of the auditor? (ii) Should individual directors have access to independent resource? Etc.

5) Composition of the board and related issues:

A board of directors is a "committee elected by the shareholders of a limited company to be
responsible for the policy of the company. Sometimes, full time functional directors are appointed,
each being responsible for some particular branch of the firm's work". The composition of board of
directors refers to the number of directors of different kinds that participate in the work of the board.
Over a period of time there has been a change as to the number and proportion of different types of

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directors in the board of a limited company. The SEBI appointed Kumar Mangalam Birla Committee's
Report defined the composition of the Board thus:
"The Board of directors of a company shall have an optimum combination of executive and non-
executive directors with not less than 50 percent of the board of directors to be non- executive
directors. The number of independent directors would depend upon whether the chairman is
executive or non- executive. In case of a non-executive chairman, at least one-third of the board should
comprise independent directors and in case of executive chairman, at least half of the board should be
independent directors.

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Reference’s:
 MANAGING FOR SUSTAINABILITYby DR N M VEC HLEKAR, Nirali Prakashan
 Managing Sustainable Business by Gilbert Lenssen E:2019
 Singhania University-MBA Text Book, E.2017, Managing for Sustainability
 http://www.legalserviceindia.com/

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