Corporate Governance and Corporate Social Responsibility

CH2 Coprorate Governance f corporate social respersibilitiy Date 3-4 Ma [AT Corporate Goverance. Concept 1. (stalke holder I Meaning → Meaning "Stakeholders means all the Individual. group and which a Organisation. are business. Interested in the (success of Stakeholders interested T.GO The mgt is concerned- responsiable for all the person, ice. stakeholders II Examples of stakeholders: (a) (shareholders (Investors) (b) employees (1) Supplier. Ion Customers (e) local authority Govs, - (f) local community. Note Stakehader > shareholder Concept 2 Corporate Governance: I Meaning of corporate - Giovernance (Ca). Busines the process af decision making & implementation of. such decision. So, CG process by which -mation/business is mathaged. an organ- The mgt al a company/businers is done by BOD, A coricha die about such policy, which requires the mgt to promote. • pairness (equal treatement). - Accountable (responsiable towards till sti Transparency (adequate informalitn to stakeholder. - Definition of 'can: as per Institude of company secretaries, corporate Governance" means → best mgt. practices. → discharge of duties to all stakeholder • Corporate. "Corporate. - Governance" → Big organisation Public Sector →Corporation Governance → is found in undertaking (PSU) Legal In in - pramecwork India, except sec 292A 1956 (dealing clause af companies Act with Audit committee.) & 49 of listing - agreement, there is no emprovisione pot corporate. Governance. vy. Meanwies/ Tips to bring corporate Governances An omganisation can bring co by Following there. techniques: no Compady shall appoint directors. (empoyer) non-executive. or independent directors. 16) Directors should be changed (rotated) prom time to time... (c) 'Director's Power should be restricted WU Directors Shareholding shall be siestricted upto a limit. Imp Good Concept 3 Characteristics of Corporate Governance- A Follbesing are the peatusies of good corporate Governance.: sale. Accountable → It means the BOD should be. Mesponsible. por its decision to all the skekeholdels 2. Transperancy → It means. the mgt. shall provide adequate Information to all the stakeholderes. 3. Participatory → The organisation shall allow the stakeholdeu or their representative, in the decision making onion 4. Consensus-oriented:→ The mat must consider the view of minori and try try to win them and make decision with 100% consent. 5. Responsive The action af mgt must be adaptable to the environmental change change in Situation, 6 equity 4 inclusive fair treatment of all the stakeholders.. 7. Follow the Rules : for good CG able the coong. must comply, all the applicable law with 8. efficiency + effectiveness. It means por best mgt practices the decision of board shall be taken at right time & in sight manner. Rde al committees for better goresinance" clause-49. provides for establishment of some committes. law Audit committee (sec.292.A) The main function of audit - committee" is to ensure. proper Internal control system (b) Remuneration committee → The main function of this committee is to recomment the compensation of MD Or Director, 10 Nomination/sucension committee → 4. To identity fevaluate the individual, who swill join the BOD. (al) Investor grievances committee. → To solve the problems/ complain of the investors, eg Complain ce Operation about transfer.. • & transmission, reviem committee → The main function al this committee. is to analyse the technical problems pored by the dept. Question (3415 page 2.7) [B Corporate Social Responsiability Concept 1. Corporate Social Responsiability→ 1. Meaning 11 CSR means meeting the social - oranisation beyond the object of propit - making simply, CSR means A balance approch Whive amang → economics responsibility (profit-making) → Legal - responsibility. E Ethical-responsibility D→ Discretionary - responsibility Voluntary / philantrophic (मानविता) I Definition Cai per lord Holme & Richard watts):→ CBR means continuing commitment by busines to behave ethically & contribute the economy development, while improving the quality -of life of the work posiect - local - Community CSR may have different meaning for diffesient persons. These may be can mean 10) for an employee, it Fair kloges no discrimination, good working conditions. 1) por a shoreholders return on investment, porcustomers, it can mean good quality for local community, providing pollution - Freer environment, bript2. Needs Benefits of CSR→ The following are the needs / benefit's al (SRS) The bron law of Responsibility: According to this law, a business gets licence to exist prom society. This licence Can be amended or even withdraco by the society. Therefore, if a to retain its existence or business intends social power, then it must positively respond to the Imit the to need of the sor society Hund simply ra TELOR advocates in Farowe of G.SR. 2. Bettes public image. 3. Increased profit.. 4. Attract the good human/ works force... 5. Fany access to capital: Concept Techniques/ strategy to incorporate CSR to in an organisation Following the same for Cimplementing 100 otrolegy car into an organisation Amend the mission & Visalon statement The mission & Vision statement shall be changed to responsibility include corporate social (6) Amend structure of Ngt Appoint some non executive director + give them responsibility for checking af CSR activities, Include CSR into long. terim planing CSR, shall be considered, while making long-teurs planing. The reason is aset (d) Imployee education & Praining : The mat shall try to give practical training to the employees highlighting the benefits of CSR. (e) CSR Reporting It means reporting about the CSR Cate activities, in the Board of director's Report.