CG_CSR_Final

8/7/2019 CG_CSR_Final

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CORPORATE GOVERNANCE &CORPORATE SOCIAL

RESPONSIBILITY

Group 7 - MIM


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What is Corporate Governance

Corporate governance is the set of processes, customs,policies, laws, and institutions affecting the way a

corporation (or company) is directed, administered or

controlled. Corporate governance also includes the

relationships among the many stakeholders involved and

the goals for which the corporation is governed

Corporate governance is essentially about leadership

leadership for efficiency

leadership for probity

leadership with responsibility

leadership which is transparent and which is accountable


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Stakeholders and their role in an

Organization


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Central Issues in Corporate Governance

Separation of Ownership and Control Information asymmetry

Principal Agent problem

Moral Hazard

Conflict ofInterest

Governance in India

Family Business

Banks & Investment Institutions

Corruption in PSUs

Implementation BIG ?


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Regulators and the Capital Markets

Companies Act Protection of minority shareholder

Special majority

Information disclosure and audit

Securities Law

Securities and Exchange Board of India (SEBI) 1992

Information disclosure

Promoters contribution and lock in

Insider trading

Discipline of the capital market


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Special Amendments by SEBI

Introduction ofClause 49 in Listing Agreement

Kumar Mangalam Birla Committee on CG: 1999

Naresh Chandra Committee - 2002

N. R. Narayana Murthy committee -2003

Some Latest amendments - The Companies Bill, 2009


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AUDITCOMMITTEE

Qualified and independent audit committee

Meeting of audit committee

Powers of audit committee

Role of audit committee

Review of information by

audit committee


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Board ofDirectors

Structure & Composition

Min 50% board should be Non-Executive Directors

At least 1/3rd Directors should be Independent

No Nominee Directors

Max 10 directorships and 5 chairmanships per person

Reasons :

Avoid dominance by Promoters or Majority Shareholders

Prevent Tunneling of Funds


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Recommendations relating to Responsibilities

Decide the Remuneration for Senior Management and Non-

Executive Directors

Define the Code ofConduct

Review Business risk and Risk Management strategy reports

Make Decisions relating to Major Capital Expenditures,Acquisitions and Payment of dividends


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Benefits ofCompliance to Corporate Governance

Economic growth

External Financing

Shareholders Trust


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CorporateSocialResponsibility

Philanthropy in response to appeals for help from societyand social investment in projects of long-term importanceto the company

WHY CSR ?

Responsible impact on society

Stakeholder engagement

Reputation & risk management

Socially responsible investment


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Case Study Employment for Physically

Challenged Godrej outsourced the

hardware packetmaking for chairs to

National Association forDisabled Enterprises(NADE)

Source ofContinuousEmployment. Averageof 10,000 packets madeevery month


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Case ofDisappearing Mangroves


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CaseStudy RuralDevelopment

SUJAL - Safe drinking waterfor rural India

A partnership between the

research lab of softwaregiant Tata ConsultancyServices (TCS) and a rangeof local NGOs

Clean and safe drinkingwater is available for thefirst time for thousands ofhouseholds in ruralMaharashtra.


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Case Study Women Empowerment

Tejaswini

Tata Steels remarkable

women empowerment

project

50 ordinary women

become operators and

drivers of heavy-duty

machinery andvehicles.


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Need for beingSociallyResponsible

Fiscal Benefits Contributions to registered Non Profit Organizations eligible forIT

exemption (Sections 80G, 35AC)

100% deduction if NGO promotes social and economic welfare

125% deduction if NGO engaged in research in sciences/social

sciences and statistical research

Soft Benefits ofCSR

Positive Public Image

Retaining staff, Enhancing employee morale

Positive engagement with Government and other NGOs

Corporate Social Responsibility: a necessity not a choice


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Many Thanks

CG_CSR_Final

Documents

Transcript of CG_CSR_Final