Roadmap for CSR initiatives
The Hindu Business Line, December 31, 2009, Page 7
--------------------------------------------------------------------------------
The Ministry of Corporate Affairs has brought out guidelines that identify six core elements as essential to any CSR policy.
--------------------------------------------------------------------------------
The CSR guidelines exhort companies to function ethically.
Mohan R. Lavi
A company recruiting a candidate stated that it was looking for a responsible person, to which the candidate replied that he was the perfect fit as in all his previous organisations whenever something went wrong he was held responsible.
A series of corporate slip-ups over the past 6-7 years have forced regulators to draw up a series of corporate governance measures which were basically rule-based. None of these however tackled the intent behind the slip-up — a wanton desire to mislead shareholders and, thereby, society.
The Ministry of Corporate Affairs (MCA), at the conclusion of the India Governance Week, has come out with Corporate Social Responsibility Voluntary Guidelines 2009 as a partner to its Corporate Governance Guidelines 2009.
Corporate Social Responsibility
The Guidelines open well by stating that each business entity should formulate a CSR policy to guide its strategic planning and provide a roadmap for its CSR initiatives, which should be an integral part of overall business policy and aligned with its business goals.
The policy should be framed with the participation of executives at various levels and be approved by the board. Six core elements have been identified as essential to any CSR policy — care for all stakeholders, ethical functioning, respect for workers' rights and welfare, respect for human rights, respect for environment and activities for social and inclusive development.
Care for all stakeholders is meant to respect the interests of and be responsive towards all stakeholders, including shareholders, employees, customers, suppliers, project affected people, society at large, etc., and create value for all of them. They should develop mechanism to actively engage with all stakeholders, inform them of inherent risks and mitigate them where they occur. Ethical functioning is meant to be that their governance systems should be underpinned by ethics, transparency and accountability. They should not engage in business practices that are abusive, unfair, corrupt or anti-competitive. Also, companies should provide a workplace environment that is safe, hygienic and humane and which upholds the dignity of employees. They should provide all employees with access to training and development of necessary skills for career advancement, on an equal and non-discriminatory basis.
Companies should respect human rights for all and avoid complicity with human rights abuses by them or by third party. Companies should take measures to check and prevent pollution recycle, manage and reduce waste, manage natural resources in a sustainable manner and ensure optimal use of resources such as land and water, proactively respond to the challenges of climate change by adopting cleaner production methods, and promote efficient use of energy and environment friendly technologies.
Finally, the guidelines state what was perceived to be CSR till date — depending on their core competency and business interest — companies should undertake activities for economic and social development of communities and geographical areas, particularly in the vicinity of their operations. These could include education, skill building for livelihood of people, health, cultural and social welfare, etc., particularly targeting at disadvantaged sections of society.
Implementation Guidance
The CSR policy of the business entity should provide for an implementation strategy which should include identification of projects/activities, setting measurable physical targets with timeframe, organisational mechanism and responsibilities, time schedules and monitoring.
Companies should allocate specific amount in their budgets for CSR activities. This amount may be related to profits after tax, cost of planned CSR activities or any other suitable parameter. Companies are also advised to network with other companies on CSR initiatives and disseminate information on CSR policy, activities and progress in a structured manner to all their stakeholders and the public at large through their Web site, annual reports, and other communication media.
A spate of corporate governance guidelines over the past few years have prescribed rules for entities to follow — the CSR guidelines exhort companies to think and act good. Together, they should be a force to reckon with in the years to come.
The Hindu Business Line, December 31, 2009, Page 7
--------------------------------------------------------------------------------
The Ministry of Corporate Affairs has brought out guidelines that identify six core elements as essential to any CSR policy.
--------------------------------------------------------------------------------
The CSR guidelines exhort companies to function ethically.
Mohan R. Lavi
A company recruiting a candidate stated that it was looking for a responsible person, to which the candidate replied that he was the perfect fit as in all his previous organisations whenever something went wrong he was held responsible.
A series of corporate slip-ups over the past 6-7 years have forced regulators to draw up a series of corporate governance measures which were basically rule-based. None of these however tackled the intent behind the slip-up — a wanton desire to mislead shareholders and, thereby, society.
The Ministry of Corporate Affairs (MCA), at the conclusion of the India Governance Week, has come out with Corporate Social Responsibility Voluntary Guidelines 2009 as a partner to its Corporate Governance Guidelines 2009.
Corporate Social Responsibility
The Guidelines open well by stating that each business entity should formulate a CSR policy to guide its strategic planning and provide a roadmap for its CSR initiatives, which should be an integral part of overall business policy and aligned with its business goals.
The policy should be framed with the participation of executives at various levels and be approved by the board. Six core elements have been identified as essential to any CSR policy — care for all stakeholders, ethical functioning, respect for workers' rights and welfare, respect for human rights, respect for environment and activities for social and inclusive development.
Care for all stakeholders is meant to respect the interests of and be responsive towards all stakeholders, including shareholders, employees, customers, suppliers, project affected people, society at large, etc., and create value for all of them. They should develop mechanism to actively engage with all stakeholders, inform them of inherent risks and mitigate them where they occur. Ethical functioning is meant to be that their governance systems should be underpinned by ethics, transparency and accountability. They should not engage in business practices that are abusive, unfair, corrupt or anti-competitive. Also, companies should provide a workplace environment that is safe, hygienic and humane and which upholds the dignity of employees. They should provide all employees with access to training and development of necessary skills for career advancement, on an equal and non-discriminatory basis.
Companies should respect human rights for all and avoid complicity with human rights abuses by them or by third party. Companies should take measures to check and prevent pollution recycle, manage and reduce waste, manage natural resources in a sustainable manner and ensure optimal use of resources such as land and water, proactively respond to the challenges of climate change by adopting cleaner production methods, and promote efficient use of energy and environment friendly technologies.
Finally, the guidelines state what was perceived to be CSR till date — depending on their core competency and business interest — companies should undertake activities for economic and social development of communities and geographical areas, particularly in the vicinity of their operations. These could include education, skill building for livelihood of people, health, cultural and social welfare, etc., particularly targeting at disadvantaged sections of society.
Implementation Guidance
The CSR policy of the business entity should provide for an implementation strategy which should include identification of projects/activities, setting measurable physical targets with timeframe, organisational mechanism and responsibilities, time schedules and monitoring.
Companies should allocate specific amount in their budgets for CSR activities. This amount may be related to profits after tax, cost of planned CSR activities or any other suitable parameter. Companies are also advised to network with other companies on CSR initiatives and disseminate information on CSR policy, activities and progress in a structured manner to all their stakeholders and the public at large through their Web site, annual reports, and other communication media.
A spate of corporate governance guidelines over the past few years have prescribed rules for entities to follow — the CSR guidelines exhort companies to think and act good. Together, they should be a force to reckon with in the years to come.
Posts
No comments:
Post a Comment