corporate governance vs. corporate social responsibilities
TRANSCRIPT
CORPORATE GOVERNANCE AND
CORPORATE SOCIAL RESPONSIBILITIES
PRESENTED BY:NANDINI DUBEYPOOJA RANISAURAV KUMARYADNESH SHINDE
INTRODUCTION: Corporate Governance is concerned with holding the balance
between economic and social goals and between individual and communal goals. The corporate governance framework is there to encourage the efficient use of resources and equally to require accountability for the stewardship of those resources. The aim is to align as nearly as possible the interests of individuals, corporations and society
Corporate social responsibility is concerned with treating the stakeholders of the firm ethically or in a socially responsible manner. Stakeholders exist both within a firm and outside. Consequently, behaving socially responsibly will increase the human development of stakeholders both within and outside the corporation.
Principles of Corporate Governance
TRANPARENCY ACCOUNTIBILITY RESPONSIBILITY FAIRNESS
Elements of Corporate Governance
Dispersed ownership
Transparent Ownership
One share/one vote
Anti-takeover defenses
Meeting notification
Board size
Outside directors
Independent directors
Written board guidelines
Written board guidelines
Board committees
Disclosure
Accounting standards
Independent audit
Board disclosure
Timely disclosure
CSR
voluntary
Practices &
values
Social & Economic
Beyondphilanthropy
There is no universally accepted definition of the word “CSR”, the meaning and definition of CSR depends upon on mainly two factors; Firstly, context in which it is used and secondly, stakeholder. The difficulties in defining precisely CSR are in part reflective of the way in which this topic has developed and the context of its use. For some, it has grown out of corporate philanthropy with a clear emphasis on social improvements or strategic investment keeping in view long term goals. For others, CSR has a much broader definition and is closely related to the sustainable development and environment issues
Relationship between Corporate Governance and CSR
CSR is gradually getting fused into companies’ Corporate Governance practices.
Both Corporate Governance and CSR focus on the ethical practices in the business and the responsiveness of an organization to its stakeholders and the environment in which it operates.
Corporate Governance and CSR results into better image of an organization and directly affects the performance of an organization.
CSR is based on the concept of self governance which is related to external legal and regulatory mechanism, whereas Corporate Governance is a widest control mechanism within which a company takes it management decisions.
Contradiction between CG & CSR
CG is related to profit maximization and protection who have provided capital to firm
CSR apparently in contrast of profit maximization because it suggest a set of actions beneficial for external stake holder and may not be good for share holder
Managers hired focused to maximize the value of firm, would behave unethically by being socially responsible
They may raise external stakeholder value at the expense of shareholders wealth maximization
Top Ten companies in India’s CSR rankings Tata Consultancy Services
ITC Ltd
Infosys Technologies
Larsen and Toubro
Reliance Industries
Oil and Natural Gas Corporation
Indian Oil Corporation
Bharti Airtel
Steel Authority of India Ltd
NMDC Ltd.
Top Ten Companies‘ in CG in India
Colgate-Palmolive (India) Ltd.
Crisil Ltd.
Gateway Distriparks Ltd.
Glenmark Pharmaceuticals Ltd.
Graphite India Ltd.
H C L Technologies Ltd.
H D F C Bank Ltd.
Hindustan Unilever Ltd.
Infosys Technologies Ltd.
Piramal Healthcare Ltd.
Punjab Tractors Ltd.
South Indian Bank Ltd.
Tata Steel Ltd
Hexaware Technologies Ltd.
CSR Activities Of ITC
CONCLUSION
The relationship between CG & CSR are best interpreted by abandoning the standard view of the firm as a shareholder value maximizer and embracing the view of a firm as a stake holder maximizer.
Social and ethically responsible firms are often viewed as the most respected and profitable firms.
CG & CSR are a strong compliments to each other.
The positive relation between CG & CSR on one hand and the market value of the firm on the other hand suggest that market is somehow able to detect the corporations which are beyond the traditional bottom line and towards an extended bottom line.