CORPORATE SOCIAL RESPONSIBILITYNMIMS-20 NOV 2011

PART IWHAT IS CSR?WHY IS IT REQUIRED

IMPACT OF GLOBALIZATIONINTEGRATION OF FINANCIAL MARKETSCHANGES IN GOVERNANCE STRUCTURESIT REVOLUTIONMULTI COUNTRY PRODUCTION OF GOODSEFFECT ON SMESMIGRATION OF WORK FORCEINJUDICIOUS USE OF RESOURCESCLOUT DISPLAYED BY FINANCIAL INSTITUTIONSIRRESPONSIBLE BEHAVIOUR BY MNCS

ROLE OF BUSINESS IN SUSTAINABLE DEVELOPMENTCOLLABORATION WITH SOCIETY AND GOVT TO CREATE A QUALITATIVELY BETTER WORLD TO LIVE INBUSINESS IS DEPENDENT ON SOCIETY FOR GROWTH AND PROSPERITYSTAKEHOLDER CONCEPTSYSTEMS APPROACHOWNERSHIP CONCEPT

STAKEHOLDER TYPESLATENT-DORMANT, DISCRETIONARY AND DEMANDINGEXPECTANT-DOMINANT,DANGEROUS

DEPENDENT.DEFINITIVENON-STAKEHOLDERS

CHALLENGES IN STAKEHOLDER ENGAGEMENTASSESSING KEY STAKEHOLDERS AND THEIR CONCERNSEFFECTIVE MANAGEMENT PROGRAMMES,MEASUREMENT AND COMMUNICATION OF PERFORMANCERESPONSE TO STAKEHOLDER VIEWSCOMMUNICATION OF VALUESCONSISTENT AND ACCURATE INFORMATIONCOMMITMENT AND ACCOUNTABILITY

MILLENNIUM DEVELOPMENT GOALSERADICATE EXTREME POVERTY AND HUNGERACHIEVE UNIVERSAL PRIMARY EDUCATIONPROMOTE GENDER EQUALITY AND EMPOWER WOMENREDUCE CHILD MORTALITYIMPROVE MATERNAL HEALTHCOMBAT HIV/AIDS,MALARIA AND OTHER DISEASESENSURE ENVIRONMENTAL SUSTAINABILITYGLOBAL PARTNERSHIP FOR DEVELOPMENT

ENVIRONMENTALSOCIALECONOMICTHE 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 TIMECORPORATE SOCIAL RESPONSIVENESS REFERS TO THE CAPACITY OF A CORPORATION TO RESPOND TO SOCIAL PRESSURES

WHAT IS CSRCSR 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 FACTSWHILE 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 ORGANIZATIONCEOS ARE FAILING TO RECOGNIZE THE BENEFITS OF IMPLEMENTING CSR STRATEGIES DESPITE INCREASING PRESSURES TO DO SOCSR PROGRAMMES INFLUENCE 70% OF ALL CUSTOMER PURCHASING DECISIONS

EMERGING TRENDSDRIVERS ARE PHILANTHROPY, IMAGE BUILDING, EMPLOYEE MORALE AND ETHICS(IN THAT ORDER)CSR AN EXTENSION OF PHILANTHROPYFOUR MODELS CO-EXIST IN INDIA- THE ETHICAL MODEL, THE STATIST MODEL,THE LIBERAL MODEL AND THE STAKEHOLDER MODELBRAND QUALITY MORE IMPORTANT THAN CSRBANKING TOPS IN THE LIST OF CSR ACTIVITIES WHILE CONSTRUCTION IS AT THE BOTTOMINCLUSIVE GROWTH

THEORIES OF CSRFRIEDMANCONTRACT THEORYSOCIAL JUSTICE THEORYRIGHTS THEORYDEONTOLOGICAL THEORYSTAKEHOLDER THEORYTRUSTEESHIP THEORY

CASE FOR CSRGOVERMENTAL FAILURE/DECREASE IN GOVERNMENTAL INFLUENCEINCREASING POWER AND INFLUENCE OF CORPORATIONSNEED FOR CORPORATE ACCOUNTABILITYNEED FOR TRANSPARENCYCORPORATE CITIZENSHIP

THE STAKEHOLDER CONCEPTLEGALLY BINDING CONTRACTSRIGHTS AND CLAIMS TO CORPORATIONSPROTECTION OF EMPLOYEE RIGHTSSPECULATIVE INTERESTS OF SHAREHOLDERSSTAKEHOLDER S ABILITY TO INFLUENCE CORPORATE DECISIONSCORPORATE GOVERNANCE

philanthropicethicallegaleconomicDesired by societyExpected by societyRequired by societyRequired by society

CARROLLS 4 PART MODEL

NOVARTISCORPORATE 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 CSRFOR

CREATING SHAREHOLDER VALUEREPUTATIONSTRATEGIC BRANDINGOP EFFICIENCYPRODUCTIVITY AND QUALITYACCESS TO NEW MARKETSHUMAN AND INTELLECTUAL CAPITAL

CONTD---AGAINST

MONEY RIGHTFULLY BELONGS TO SHAREHOLDERSPOLITICIANS MUST DEAL WITH SOCIAL ISSUESINVESTMENT ON CORE BUSINESSMORE A PUBLICITY STUNTPOWER AND RESPONSIBILITY DO NOT NECESSARILY GO HAND IN HAND

THIS IS HALLMARKWE BELIEVETHAT OUR PRODUCTS AND SERVICES MUST ENRICH PEOPLES LIVES AND ENHANCE THEIR RELATIONSHIPSTHAT CREATIVITY AND QUALITY IS ESSENTIAL TO SUCCESSTHAT THE PEOPLE OF HALLMARK ARE OUR COMPANYS MOST VALUABLE RESOURCETHAT DISTINGUISHED FINANCIAL PERFORMANCE IS A MUSTTHAT OUR PRIVATE OWNERSHIP SHOULD BE PRESERVED

THE VALUES THAT GUIDE US ARE---EXCELLENCE IN ALL WE DOETHICAL AND MORAL CONDUCT AT ALL TIMESINNOVATION IN ALL AREAS OF BUSINESS AS A MEANS OF ATTAINING AND SUSTAINING LEADERSHIP CSR TO EACH COMMUNITY IN WHICH WE OPERATE

PART IIDEVELOPING A CSR STRATEGY

CSR ASSESSMENTORGANIZATIONS VALUES AND ETHICSEXTERNAL AND INTERNAL DRIVERSKEY CSR ISSUES THAT COULD AFFECT THE ORGANIZATIONKEY STAKEHOLDERSCURRENT CORPORATE DECISION MAKING STRUCTUREHUMAN RESOURCES AND BUDGETARY IMPLICATIONSEXISTING CSR INITIATIVES

ASSESS BY---ASSEMBLING A CSR TEAMDEVELOP A WORKING DEFINITION OF CSRREVIEW CORPORATE DOCUMENTS, PROCESSES AND ACTIVITIESIDENTIFY AND ENGAGE KEY STAKEHOLDERS

DEVELOP STRATEGY BY---BUILD SUPPORT WITH SENIOR MANAGEMENT AND EMPLOYEESRESEARCH WHAT BUSINESS IS DOINGPREPARE A MATRIX OF PROPOSED CSR ACTIONSDEVELOP ACTIONS AND THE BUSINESS CASE FOR THEMDECIDE ON DIRECTION,APPROACH AND FOCUS AREAS.

POSSIBLE BUSINESS CASELEVERAGING CSRCOMPETITIVE ADVANTAGESTAKEHOLDER INFLUENCESHORT AND LONG TERM GOALSCOSTS VS BENEFITSCHANGES ORG MAY BE REQD TO MAKERISKS/THREATS

IMPLEMENTING CSR STRATEGYDEVELOP AN INTEGRATED CSR DECISION MAKING STRUCTUREPREPAREAND IMPLEMENT CSR BUSINESS PLANSET MEASURABLE TARGETS AND IDENTIFY PERFORMANCE MEASURESENGAGE THOSE TO WHOM CSR COMMITMENTS APPLYDESIGN AND CONDUCT CSR TRAININGESTABLISH MECHANISMS FOR ADDRESSING PROBLEMATIC BEHAVIOURCREATE INTERNAL AND EXTERNAL COMMUNICATION PLAN

AREAS OF CSR IMPLEMENTATIONACCOUNTABILITYECO DEVPENVIRONMENTLABOUR/HUMAN RTSHRCGETHICSCSR

CSR AT WORKPLACEREMUNERATIONETHICAL HR PRACTICESHEALTH/SAFETYWORK LIFE BALANCEAGE OF EMPLOYEESDOWNSIZINGDIVERSITY IN WORK CULTUREPRIVACYCONCERNS FOR FREEDOMCONSISTENCY ACROSS DIFFERENT WORK ENVIRONMENTSTELECOMMUTING/WORKING FROM HOMEWOMEN AT THE WORKPLACE

CSR AND THE ENVIRONMENTAIR POLLUTIONWATER POLLUTIONSOIL POLLUTIONDEGRADATION OF THE ENVIRONMENTDESTRUCTION OF LIVELIHOODINDUSTRIAL ACCIDENTS/WASTE DISPOSALE WASTE

CSR INTERVENTIONSEMPLOYEE VOLUNTEERINGINFRASTRUCTURAL SUPPORTFINANCIAL SUPPORTPRODUCT/SERVICE SUPPORT

IMPORTANCE OF NGO PARTNERSHIPSINVOLVE GOVT AND NGOSCHOOSE NGOS DISPLAYING COMPETENCE AND GOOD RESULTS OVER TIMECAPABILITY TO ADVANCE PROJECTS ON A LARGE SCALEREPUTATION/RELIABILITYPROFESSIONALLY MANAGEDPREDOMINANT POSITION IN SECTORINDEPENDENCE FROM COMPANY AND AUTHORITIES

PART IIICSR MONITORING, MEASUREMENT AND REPORTING

MONITORING AND MEASUREMENTMONITORING THROUGH NGOSEMPLOYEE LOYALTYCSR COMMITTEEPERFORMANCEPERFORMANCE INDICATORSGLOBAL REPORTING INITIATIVESKPISACCOUNTABILITY 1000 SERIESTBL

REPORTINGCORPORATE SUSTAINABILITY REPORTINTERNAL AND EXTERNAL STAKEHOLDERSINFORMATION ABOUT CHALLENGESAND ACHIEVEMENTSCOMMITMENT TO ENVIRONMENTAL AND SOCIAL RESPONSIBILITYPERFORMANCE-CODE OF CONDUCT, CG,MITIGATION OF RISKSENVIRONMENT MGT

MEASUREMENT AND MONITORING TOOLSEMPLOYEE AND CUSTOMER SURVEYSPUBLIC ATTITUDE AND TRUST SVYSEMPLOYEE SAFETYWASTE MGTPOSITIVE AND NEGATIVE MEDIA COVERAGEPEER AND EXPERT EVALUATIONIMAGE AMONG FINANCIAL ANALYSTS AND REGULATORSPERCEPTION AMONGST STAKEHOLDERS

CSR PROGRAMMESEDUCATIONHEALTHLIVELIHOOD CREATIONSKILL DEVELOPMENTEMPOWERMENT OF WEAKER SECTIONSENVIRONMENT

COMPANIES TAKING CSR INITIATIVESTATA GROUPINFOSYSBHARTI ENTERPRISESHCLITC WELCOME GROUPONGCSAILORCHID CHEMICALS AND PHARMANDTVAIRCEL

SOME INITIATIVESIBM- UPLIFTMENT OF TRIBALS IN SASANINDIAN PAINT INDUSTRY MAKING PAINTS MORE ENVIRONMENT FRIENDLYFINANCIAL SERVICES-NEASING OF CARBON FOOTPRINTS-RENEWABLE ENERGY ETC- HSBC, MAX NEWYORK LIFE, SCBE CHAUPALADOBE, KPMG, PROMOTING ENTREPRENEURSHIPRELIANCE- PROJECT DRISHTINDTV-GREENATHONAIRCEL-SAVE THE TIGERCOPENHAGEN- ENVIRONMENT ISSUESE WASTE MANAGEMENT

PART IVCORPORATE GOVERNANCE

CORPORATIONA 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`STRONG VS WEAK PERFORMANCEPUBLICLY OWNED BUSINESS VS PRIVATELY OWNED BUSINESSPROSPECT OF ATTRACTING LONG TERM, STABLE CAPITALINCLUDES QUESTIONS OF STRATEGY,VISION OF TOP MANAGEMENT,TRANSPARENCY,CODE OF CONDUCT, STDS OF PERFORMANCE, ACCOUNTABILITY ETCDIRECTION OF BUSINESS PERFORMANCEMEETING STAKEHOLDER INTERESTRECONCILIATION OF CONFLICTING INTERESTSSYSTEMS FOR ACCOUNTING, AUDITING AND FISCL DISCIPLINEMANAGER DISCIPLINE

Concept of Corporate GovernanceCG 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 GovernanceDefine 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.

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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 MANAGEMENTBOARD NOT PART OF THE MANAGEMENT STRUCTURELINE AND STAFF MANAGERS REPORT TO THE CEO WHO HAS OVERALL RESPONSIBILITYBOARD HAS BOTH EXECUTIVE AND NON EXECUTIVE /OUTSIDE DIRECTORSEXECUTIVE DIRECTORS HOLD A MANAGERIAL ROLEINDEPENDENT DIRECTORS HAVE NO RELATION WITH THE COMPANY

ADDING TEETH TO CORPORATE GOVERNANCESTRIVING TO ENSURE THAT CODE OF CONDUCT IS UNDERSTOOD AND ADHERED TO BY ALL MEMBERS OF THE ORGANIZATIONPERFORMANCE MANAGEMENT SYSTEM SHOULD RECOGNIZE AND REWARD ETHICAL BEHAVIOUREXCLUSIVE BACKGROUND CHECKS ON SENIOR MANAGEMENT OF THE ORGANIZATIONSCREENING OF THIRD PARTIES WITH WHOM COMPANY DOES BUSINESSSCOPE OF WHISTLEBLOWER POLICIES EXTENDED TO WIDER STAKEHOLDER GROUPSINVESTORS, LENDERS ANALYSTS SHOULD PROACTIVELY CHALLENGE CG PRACTICES

CONTDCHAIRMEN OF BOARDS SHOULD ACTIVELY MONITOR HOW INDIVIDUAL DIRECTORS PROACTIVELY IDENTIFYING AND FULFILLING THEIR KNOWLEDGE AND COMPETENCY LEVELSCOMPULSORY ATTENDANCE ON BOARD MEETINGSMANDATORY BOARD AND AUDIT COMMITTEE EVALUATIONSHEFTY MONETARY PENALTIES ON INDEPENDENT DIRECTORS AND AUDITORS WHO DO NOT CARRY OUT THEIR JOBS

SOX ACT 2002PENALTY FOR CORPORATE FRAUD- UPTO 20 YRS IMPRISONMENT FOR ALTERING/DESTROYING DOCUMENTSCEOs LIABLE FOR UPTO 20 YRS IMPRISONMENT WITH FINES UPTO USD 5 MN FOR CERTIFYING FALSE ACCOUNTSTIME PD FOR ENGAGING IN LAW SUITS BY DEFRAUDED INVESTORS ENHANCEDACCTG FIRMS AND CONSULTACY/NON AUDIT SERVICESACCTG PROFESSION TO BE UNDER STRICT SCRUTINY BY 5 MEMBER PVT SECTOR BOARD WHICH WILL HAVE DISCIPLINARY AS WELL AS COURT/SUBPOENA POWERS

CADBURY REPORTPUBLISHED 1992-COMMITTEE CHAIRED BY SIR ADRIAN CADBURYREPORT RECOMMENDATIONS ADOPTED BY EU,THE US AND THE WORLD BANKBACKGROUND- MAXWELL GROUP OF COMPANIESPUBLICALLY TRADED CORPORATIONS SHOULD HAVE THREE OUTSIDE DIRECTORSPOSITIONS OF CEO/CHAIRMAN BY DIFFERENT PEOPLESUPREMACY 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 MAKINGINDEPENDENT DIRECTOR SHOULD NOT SERVE FOR MORE THAN TWO TERMSFINES AND JAIL TERMS FOR FRAUD

CADBURY COMMITTEE REPORTMay 1991- Code Of best practicesBd Should meet regularly, retain full and effective control over the company , monitor the executive managementClearly accepted division of responsibilitiesNon Executive Directors of sufficient calibre and number

contdAgreed procedure for furtherance of duties of the DirectorsAll Directors should have access to the advice and services of the Company SecretaryNon Independent directors should have independent judgement on issue regarding strategy, performance,resources , key appts etc

LEGAL OBLIGATIONS OF DIRECTORSREPRESENTING THE INTEREST OF OWNERSSCRUTINY OF STAKEHOLDERSTHE FIDUCIARY DUTIESTHE DUTY OF LOYALTY AND FAIR DEALINGDUTY OF CAREDUTY NOT TO ENTRENCHDUTY OF SUPERVISIONDEALING WITH HOSTILE TAKEOVER OFFERS

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