Corporate Governance Vs. Corporate Social Responsibilities

Corporate Governance Vs. Corporate Social Responsibilities

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  PRESENTED BY: NANDINI DUBEY POOJARANI SAURAV KUMAR YADNESH SHINDE
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  INTRODUCTION:  Corporate Governanceis 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.
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  Principles of CorporateGovernance  TRANPARENCY  ACCOUNTIBILITY  RESPONSIBILITY  FAIRNESS
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  Elements of CorporateGovernance  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
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  CSR voluntary Practices & values Social & Economic Beyond philanthropy
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   There isno 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
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  Relationship between Corporate Governanceand 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.
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  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
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  Top Ten companiesin 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.
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  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.
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  CONCLUSION  The relationshipbetween 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.