Corporate governance and social responsibility

Importance of Corporate Governance and Social Responsibility

1. CORPORATE GOVERNANCE AND SOCIAL RESPONSIBILITY

2. What is corporate governance? The primary purpose of corporate leadership is to create wealth legally and ethically. This translates to bringing a high level of satisfaction to five constituencies -- customers, employees, investors, vendors and the society-at-large. The raison d'être of every corporate body is to ensure predictability, sustainability and profitability of revenues  YEAR AFTER YEAr . -N R Narayana Murthy

3. Parties to Corporate Governance

4. Characteristics of Good Governance

5. ISSUES INVOLVING CORPORATE GOVERNANCE PRINCIPLES INCLUDE Internal controls and internal auditors. The independence of the entity's external auditors and the quality of their audits. Oversight and management of risk. Oversight of the preparation of the entity's financial statements. Review of the compensation arrangements for the chief executive officer and other senior executives . The resources made available to directors in carrying out their duties. The way in which individuals are nominated for positions on the board.

6. Some Cases of Corporate Governance in Indian History

7. Raja headed the Telecommunications and IT Ministry. CAG holds Raja personally responsible for the sale of 2G spectrum at 2001 rates in 2008. The 2G spectrum financial scandal, amounting to around 200 crore (US$39.9 million) of lost income for the Government of India. In 2011, TIME magazine listed the 2G spectrum scam, in which Raja was allegedly involved, as number two on their “Top 10 Abuses of Power” list. Former Telecom Minister: Andimuthu Raja

8. The biggest corporate scam in India has come from one of the most respected businessmen. Satyam founder Byrraju Ramalinga Raju resigned as its chairman after admitting to cooking up the account books. His efforts to fill the "fictitious assets with real ones“. Through Maytas acquisition failed, after which he decided to confess the crime. With a fraud involving about Rs 8,000 crore (Rs 80 billion). Satyam founder : Ramalinga Raju

9.  H e was known as the Big Bull. He triggered a rise in the Bombay Stock Exchange in the year 1992 by trading in shares at a premium across many segments. However, his bull run did not last too long. Taking advantages of the loopholes in the banking system, Harshad and his associates triggered a securities scam diverting funds to the tune of Rs 4000 crore (Rs 40 billion) from the banks to stockbrokers between April 1991 to May 1992. HARSHAD MEHTA : THE SCAMSTER

10. ICSI National Award for Excellence in Corporate Governance 1.      Indian Oil Corporation Limited  2.      HCL Technologies Limited

11. “CSR is a concept which suggests that commercial corporations must fulfill their duty of providing care to the society” Ethical behavior of a company (or business) towards society. Promoting activities like engaging directly with local communities, identifying their basic needs, and integrating their needs with business goals and strategic intent. The government perceives CSR as the business contribution to the nation’s sustainable development goals. Essentially, it is about how business takes into account the economic, social and environmental impact of the way in which it operates. Corporate Social Responsibility

12. Benefits of CSR

13. Evolution of Corporate Social Responsibility in India First Phase In the first phase charity and philanthropy were the main drivers of CSR. With the arrival of colonial rule in India from the 1850s onwards, the approach towards CSR changed. Second Phase In the second phase, during the independence movement, there was increased stress on Indian Industrialists to demonstrate their dedication towards the progress of the society. Mahatma Gandhi introduced the notion of "trusteeship“. Businesses established trusts for schools and colleges and also helped in setting up training and scientific institutions. The operations of the trusts were largely in line with Gandhi's reforms,

14. Third Phase (1960-80) Element of "mixed economy“. The public sector was seen as the prime mover of development. The policy of industrial licensing, high taxes and restrictions on the private sector led to corporate malpractices. This led to enactment of legislation regarding corporate governance, labour and environmental issues. Shift of expectation from the public to the private sector and their active involvement in the socio-economic development of the country became absolutely necessary. In spite of such attempts the CSR failed to catch steam.

15. Forth Phase (1980 until the present)  Indian companies started abandoning their traditional engagement with CSR and integrated it into a sustainable business strategy. Increased growth momentum of the economy helped Indian companies grow rapidly and this made them more willing and able to contribute towards social cause.  Indian companies who export and produce goods for the developed world need to pay a close attention to compliance with the international standards.

16. Current State of CSR in India Basic objective of CSR in these days is to maximize the company's overall impact on the society and stakeholders. It is important for protecting the goodwill and reputation, defending attacks and increasing business competitiveness. Companies have specialised CSR teams. Also Corporate increasingly join hands with Non-governmental organizations (NGOs) and use their expertise in devising programs which address wider social problems. Law : Under the Companies Act, 2013, any company having a net worth of rupees 500 crore or more or a turnover of rupees 1,000 crore or more or a net profit of rupees 5 crore or more should mandatorily spend 2% of their net profits per fiscal on CSR activities. The rules came into effect from 1 April 2014.

17. Mrs. Rajashree Birla , Chairperson of The Aditya Birla Centre for Community Initiatives and Rural Development17 says: “ CSR is an aspect of a company’s policy. The government has so many schemes and has also allocated funds for them. If government ropes in corporate besides the NGOs, the scheme would be very effective. With corporate coming on scene, there would be a discipline and a definite manner of working. It would also bring about a greater transparency” Mr. N. R. Naryana Murthy , Chairman and Chief Mentor, Infosys Ltd. We must consider ourselves very fortunate to have bestowed this extraordinary responsibility of handing over our planet intact to the next generation at a very crucial stage when economic equity, economic awareness and economic inclusivity is bringing about an unpredented transformation is developing countries. Key Persons About CSR