CORPORATE SOCIAL CORPORATE SOCIAL RESPONSIBILITYRESPONSIBILITY

NMIMS-20 NOV 2011NMIMS-20 NOV 2011

PART IPART I

WHAT IS CSR?WHAT IS CSR?

WHY IS IT REQUIREDWHY IS IT REQUIRED

IMPACT OF GLOBALIZATIONIMPACT OF GLOBALIZATION

INTEGRATION OF FINANCIAL MARKETSINTEGRATION OF FINANCIAL MARKETS

CHANGES IN GOVERNANCE STRUCTURESCHANGES IN GOVERNANCE STRUCTURES

IT REVOLUTIONIT REVOLUTION

MULTI COUNTRY PRODUCTION OF GOODSMULTI COUNTRY PRODUCTION OF GOODS

EFFECT ON SMESEFFECT ON SMES

MIGRATION OF WORK FORCEMIGRATION OF WORK FORCE

INJUDICIOUS USE OF RESOURCESINJUDICIOUS USE OF RESOURCES

CLOUT DISPLAYED BY FINANCIAL INSTITUTIONSCLOUT DISPLAYED BY FINANCIAL INSTITUTIONS

IRRESPONSIBLE BEHAVIOUR BY MNCSIRRESPONSIBLE BEHAVIOUR BY MNCS

ROLE OF BUSINESS IN ROLE OF BUSINESS IN SUSTAINABLE DEVELOPMENTSUSTAINABLE DEVELOPMENTCOLLABORATION WITH SOCIETY AND COLLABORATION WITH SOCIETY AND GOVT TO CREATE A QUALITATIVELY GOVT TO CREATE A QUALITATIVELY BETTER WORLD TO LIVE INBETTER WORLD TO LIVE INBUSINESS IS DEPENDENT ON BUSINESS IS DEPENDENT ON SOCIETY FOR GROWTH AND SOCIETY FOR GROWTH AND PROSPERITYPROSPERITYSTAKEHOLDER CONCEPTSTAKEHOLDER CONCEPTSYSTEMS APPROACHSYSTEMS APPROACHOWNERSHIP CONCEPTOWNERSHIP CONCEPT

STAKEHOLDER TYPESSTAKEHOLDER TYPES

LATENT-DORMANT, DISCRETIONARY LATENT-DORMANT, DISCRETIONARY AND DEMANDINGAND DEMANDING

EXPECTANT-DOMINANT,DANGEROUSEXPECTANT-DOMINANT,DANGEROUS

DEPENDENT.DEPENDENT.

DEFINITIVEDEFINITIVE

NON-STAKEHOLDERSNON-STAKEHOLDERS

CHALLENGES IN STAKEHOLDER CHALLENGES IN STAKEHOLDER ENGAGEMENTENGAGEMENT

ASSESSING KEY STAKEHOLDERS AND ASSESSING KEY STAKEHOLDERS AND THEIR CONCERNSTHEIR CONCERNSEFFECTIVE MANAGEMENT EFFECTIVE MANAGEMENT PROGRAMMES,MEASUREMENT AND PROGRAMMES,MEASUREMENT AND COMMUNICATION OF PERFORMANCECOMMUNICATION OF PERFORMANCERESPONSE TO STAKEHOLDER VIEWSRESPONSE TO STAKEHOLDER VIEWSCOMMUNICATION OF VALUESCOMMUNICATION OF VALUESCONSISTENT AND ACCURATE CONSISTENT AND ACCURATE INFORMATIONINFORMATIONCOMMITMENT AND ACCOUNTABILITYCOMMITMENT AND ACCOUNTABILITY

MILLENNIUM DEVELOPMENT MILLENNIUM DEVELOPMENT GOALSGOALS

ERADICATE EXTREME POVERTY AND HUNGERERADICATE EXTREME POVERTY AND HUNGERACHIEVE UNIVERSAL PRIMARY EDUCATIONACHIEVE UNIVERSAL PRIMARY EDUCATIONPROMOTE GENDER EQUALITY AND EMPOWER PROMOTE GENDER EQUALITY AND EMPOWER

WOMENWOMENREDUCE CHILD MORTALITYREDUCE CHILD MORTALITYIMPROVE MATERNAL HEALTHIMPROVE MATERNAL HEALTHCOMBAT HIV/AIDS,MALARIA AND OTHER COMBAT HIV/AIDS,MALARIA AND OTHER

DISEASESDISEASESENSURE ENVIRONMENTAL SUSTAINABILITYENSURE ENVIRONMENTAL SUSTAINABILITYGLOBAL PARTNERSHIP FOR DEVELOPMENTGLOBAL PARTNERSHIP FOR DEVELOPMENT

ENVIRONMENTAL

SOCIAL

ECONOMIC

THE TRIPLE BOTTOM LINE

WHAT IS CSR?WHAT IS CSR?

CORPORATE SOCIAL RESPONSIBILITY CORPORATE SOCIAL RESPONSIBILITY ENCOMPASSES THE ECONOMIC, ENCOMPASSES THE ECONOMIC, LEGALETHICAL AND PHILANTHROPIC LEGALETHICAL AND PHILANTHROPIC EXPECTATIONS PLACED ON EXPECTATIONS PLACED ON ORGANIZATIONS BY SOCIETY AT A GIVEN ORGANIZATIONS BY SOCIETY AT A GIVEN POINT OF TIMEPOINT OF TIME

CORPORATE SOCIAL RESPONSIVENESS CORPORATE SOCIAL RESPONSIVENESS REFERS TO THE CAPACITY OF A REFERS TO THE CAPACITY OF A CORPORATION TO RESPOND TO SOCIAL CORPORATION TO RESPOND TO SOCIAL PRESSURESPRESSURES

WHAT IS CSRWHAT IS CSR

CSR IS THE CONTINUING COMMITMENT BY CSR IS THE CONTINUING COMMITMENT BY BUSINESS TO BEHAVE ETHICALLY AND BUSINESS TO BEHAVE ETHICALLY AND CONTRIBUTE TO ECONOMIC CONTRIBUTE TO ECONOMIC DEVELOPMENT, WHILE IMPROVING THE DEVELOPMENT, WHILE IMPROVING THE QUALITY OF LIFE OF THE WORKFORCE AND QUALITY OF LIFE OF THE WORKFORCE AND THEIR FAMILIES AS WELL AS OF THE LOCAL THEIR FAMILIES AS WELL AS OF THE LOCAL COMMUNITY AND SOCIETY AT LARGE.COMMUNITY AND SOCIETY AT LARGE.

WORLD BUSINESS COUNCIL FOR SUSTAINED WORLD BUSINESS COUNCIL FOR SUSTAINED DEVELOPMENTDEVELOPMENT

SOME FACTSSOME FACTS

WHILE 94% OF THE COMPANIES BELIEVE WHILE 94% OF THE COMPANIES BELIEVE THAT DEVELOPMENT OF CSR STRATEGIES THAT DEVELOPMENT OF CSR STRATEGIES CAN DELIVER REAL BUSINESS BENEFITS CAN DELIVER REAL BUSINESS BENEFITS ONLY 11% MADE ANY SIGNIFICANT ONLY 11% MADE ANY SIGNIFICANT PROGRESS IN IMPLEMENTING STRATEGY PROGRESS IN IMPLEMENTING STRATEGY IN THE ORGANIZATIONIN THE ORGANIZATIONCEOS ARE FAILING TO RECOGNIZE THE CEOS ARE FAILING TO RECOGNIZE THE BENEFITS OF IMPLEMENTING CSR BENEFITS OF IMPLEMENTING CSR STRATEGIES DESPITE INCREASING STRATEGIES DESPITE INCREASING PRESSURES TO DO SOPRESSURES TO DO SOCSR PROGRAMMES INFLUENCE 70% OF ALL CSR PROGRAMMES INFLUENCE 70% OF ALL CUSTOMER PURCHASING DECISIONSCUSTOMER PURCHASING DECISIONS

EMERGING TRENDSEMERGING TRENDS

DRIVERS ARE PHILANTHROPY, IMAGE BUILDING, DRIVERS ARE PHILANTHROPY, IMAGE BUILDING, EMPLOYEE MORALE AND ETHICS(IN THAT ORDER)EMPLOYEE MORALE AND ETHICS(IN THAT ORDER)CSR AN EXTENSION OF PHILANTHROPYCSR AN EXTENSION OF PHILANTHROPYFOUR MODELS CO-EXIST IN INDIA- THE ETHICAL FOUR MODELS CO-EXIST IN INDIA- THE ETHICAL MODEL, THE STATIST MODEL,THE LIBERAL MODEL MODEL, THE STATIST MODEL,THE LIBERAL MODEL AND THE STAKEHOLDER MODELAND THE STAKEHOLDER MODELBRAND QUALITY MORE IMPORTANT THAN CSRBRAND QUALITY MORE IMPORTANT THAN CSRBANKING TOPS IN THE LIST OF CSR ACTIVITIES BANKING TOPS IN THE LIST OF CSR ACTIVITIES WHILE CONSTRUCTION IS AT THE BOTTOMWHILE CONSTRUCTION IS AT THE BOTTOMINCLUSIVE GROWTHINCLUSIVE GROWTH

THEORIES OF CSRTHEORIES OF CSR

FRIEDMANFRIEDMAN

CONTRACT THEORYCONTRACT THEORY

SOCIAL JUSTICE THEORYSOCIAL JUSTICE THEORY

RIGHTS THEORYRIGHTS THEORY

DEONTOLOGICAL THEORYDEONTOLOGICAL THEORY

STAKEHOLDER THEORYSTAKEHOLDER THEORY

TRUSTEESHIP THEORYTRUSTEESHIP THEORY

CASE FOR CSRCASE FOR CSR

•GOVERMENTAL FAILURE/DECREASE IN GOVERNMENTAL INFLUENCE•INCREASING POWER AND INFLUENCE OF CORPORATIONS•NEED FOR CORPORATE ACCOUNTABILITY•NEED FOR TRANSPARENCY•CORPORATE CITIZENSHIP

THE STAKEHOLDER THE STAKEHOLDER CONCEPTCONCEPT

•LEGALLY BINDING CONTRACTS•RIGHTS AND CLAIMS TO CORPORATIONS•PROTECTION OF EMPLOYEE RIGHTS•SPECULATIVE INTERESTS OF SHAREHOLDERS•STAKEHOLDER’ S ABILITY TO INFLUENCE CORPORATE DECISIONS•CORPORATE GOVERNANCE

philanthropic

ethical

legal

economic

Desired by society

Expected by society

Required by society

Required by society

CARROLLS 4 PART MODEL

NOVARTISNOVARTIS

CORPORATE CITIZENSHIP AT NOVARTIS CORPORATE CITIZENSHIP AT NOVARTIS BEGINS WITH THE SUCCESS OF OUR CORE BEGINS WITH THE SUCCESS OF OUR CORE BUSINESS.THE MORE WE ARE SUCCESSFUL BUSINESS.THE MORE WE ARE SUCCESSFUL IN THE DISCOVERY,DEVELOPING, IN THE DISCOVERY,DEVELOPING, MANUFACTURING AND MARKETING OF NEW MANUFACTURING AND MARKETING OF NEW MEDICINES,THE GREATER THE BENEFITS WE MEDICINES,THE GREATER THE BENEFITS WE CAN OFFER TO ASSOCIATES AND CAN OFFER TO ASSOCIATES AND SHAREHOLDERS, PATIENTS, HEALTH CARE SHAREHOLDERS, PATIENTS, HEALTH CARE PROFESSIONALS AND OTHER KEY PROFESSIONALS AND OTHER KEY STAKEHOLDERS.STAKEHOLDERS.

ARGUMENTS FOR AND AGAINST ARGUMENTS FOR AND AGAINST CSRCSR

FORFOR CREATING SHAREHOLDER VALUECREATING SHAREHOLDER VALUE REPUTATIONREPUTATION STRATEGIC BRANDINGSTRATEGIC BRANDING OP EFFICIENCYOP EFFICIENCY PRODUCTIVITY AND QUALITYPRODUCTIVITY AND QUALITY ACCESS TO NEW MARKETSACCESS TO NEW MARKETS HUMAN AND INTELLECTUAL CAPITALHUMAN AND INTELLECTUAL CAPITAL

CONTD---CONTD---

AGAINSTAGAINST MONEY RIGHTFULLY BELONGS TO MONEY RIGHTFULLY BELONGS TO

SHAREHOLDERSSHAREHOLDERS POLITICIANS MUST DEAL WITH POLITICIANS MUST DEAL WITH

SOCIAL ISSUESSOCIAL ISSUES INVESTMENT ON CORE BUSINESSINVESTMENT ON CORE BUSINESS MORE A PUBLICITY STUNTMORE A PUBLICITY STUNT POWER AND RESPONSIBILITY DO NOT POWER AND RESPONSIBILITY DO NOT

NECESSARILY GO HAND IN HANDNECESSARILY GO HAND IN HAND

THIS IS HALLMARKTHIS IS HALLMARK

WE BELIEVEWE BELIEVETHAT OUR PRODUCTS AND SERVICES MUST ENRICH THAT OUR PRODUCTS AND SERVICES MUST ENRICH PEOPLES LIVES AND ENHANCE THEIR RELATIONSHIPSPEOPLES LIVES AND ENHANCE THEIR RELATIONSHIPS

THAT CREATIVITY AND QUALITY IS ESSENTIAL TO THAT CREATIVITY AND QUALITY IS ESSENTIAL TO SUCCESSSUCCESS

THAT THE PEOPLE OF HALLMARK ARE OUR THAT THE PEOPLE OF HALLMARK ARE OUR COMPANY’S MOST VALUABLE RESOURCECOMPANY’S MOST VALUABLE RESOURCE

THAT DISTINGUISHED FINANCIAL PERFORMANCE IS A THAT DISTINGUISHED FINANCIAL PERFORMANCE IS A MUSTMUST

THAT OUR PRIVATE OWNERSHIP SHOULD BE THAT OUR PRIVATE OWNERSHIP SHOULD BE PRESERVEDPRESERVED

THE VALUES THAT GUIDE US ARE---THE VALUES THAT GUIDE US ARE---

EXCELLENCE IN ALL WE DOEXCELLENCE IN ALL WE DO

ETHICAL AND MORAL CONDUCT AT ALL ETHICAL AND MORAL CONDUCT AT ALL TIMESTIMES

INNOVATION IN ALL AREAS OF INNOVATION IN ALL AREAS OF BUSINESS AS A MEANS OF ATTAINING BUSINESS AS A MEANS OF ATTAINING AND SUSTAINING LEADERSHIP AND SUSTAINING LEADERSHIP

CSR TO EACH COMMUNITY IN WHICH CSR TO EACH COMMUNITY IN WHICH WE OPERATEWE OPERATE

PART IIPART II

DEVELOPING A CSR DEVELOPING A CSR STRATEGYSTRATEGY

CSR ASSESSMENTCSR ASSESSMENT

ORGANIZATION’S VALUES AND ETHICSORGANIZATION’S VALUES AND ETHICSEXTERNAL AND INTERNAL DRIVERSEXTERNAL AND INTERNAL DRIVERSKEY CSR ISSUES THAT COULD AFFECT THE KEY CSR ISSUES THAT COULD AFFECT THE ORGANIZATIONORGANIZATIONKEY STAKEHOLDERSKEY STAKEHOLDERSCURRENT CORPORATE DECISION MAKING CURRENT CORPORATE DECISION MAKING STRUCTURESTRUCTUREHUMAN RESOURCES AND BUDGETARY HUMAN RESOURCES AND BUDGETARY IMPLICATIONSIMPLICATIONSEXISTING CSR INITIATIVESEXISTING CSR INITIATIVES

ASSESS BY---ASSESS BY---

ASSEMBLING A CSR TEAMASSEMBLING A CSR TEAM

DEVELOP A WORKING DEFINITION OF DEVELOP A WORKING DEFINITION OF CSRCSR

REVIEW CORPORATE DOCUMENTS, REVIEW CORPORATE DOCUMENTS, PROCESSES AND ACTIVITIESPROCESSES AND ACTIVITIES

IDENTIFY AND ENGAGE KEY IDENTIFY AND ENGAGE KEY STAKEHOLDERSSTAKEHOLDERS

DEVELOP STRATEGY BY---DEVELOP STRATEGY BY---

BUILD SUPPORT WITH SENIOR BUILD SUPPORT WITH SENIOR MANAGEMENT AND EMPLOYEESMANAGEMENT AND EMPLOYEESRESEARCH WHAT BUSINESS IS DOINGRESEARCH WHAT BUSINESS IS DOINGPREPARE A MATRIX OF PROPOSED PREPARE A MATRIX OF PROPOSED CSR ACTIONSCSR ACTIONSDEVELOP ACTIONS AND THE DEVELOP ACTIONS AND THE BUSINESS CASE FOR THEMBUSINESS CASE FOR THEMDECIDE ON DIRECTION,APPROACH DECIDE ON DIRECTION,APPROACH AND FOCUS AREAS.AND FOCUS AREAS.

POSSIBLE BUSINESS CASEPOSSIBLE BUSINESS CASE

LEVERAGING CSRLEVERAGING CSRCOMPETITIVE ADVANTAGECOMPETITIVE ADVANTAGESTAKEHOLDER INFLUENCESTAKEHOLDER INFLUENCESHORT AND LONG TERM GOALSSHORT AND LONG TERM GOALSCOSTS VS BENEFITSCOSTS VS BENEFITSCHANGES ORG MAY BE REQD TO CHANGES ORG MAY BE REQD TO MAKEMAKERISKS/THREATSRISKS/THREATS

IMPLEMENTING CSR STRATEGYIMPLEMENTING CSR STRATEGY

DEVELOP AN INTEGRATED CSR DECISION MAKING DEVELOP AN INTEGRATED CSR DECISION MAKING STRUCTURESTRUCTUREPREPAREAND IMPLEMENT CSR BUSINESS PLANPREPAREAND IMPLEMENT CSR BUSINESS PLANSET MEASURABLE TARGETS AND IDENTIFY SET MEASURABLE TARGETS AND IDENTIFY PERFORMANCE MEASURESPERFORMANCE MEASURESENGAGE THOSE TO WHOM CSR COMMITMENTS ENGAGE THOSE TO WHOM CSR COMMITMENTS APPLYAPPLYDESIGN AND CONDUCT CSR TRAININGDESIGN AND CONDUCT CSR TRAININGESTABLISH MECHANISMS FOR ADDRESSING ESTABLISH MECHANISMS FOR ADDRESSING PROBLEMATIC BEHAVIOURPROBLEMATIC BEHAVIOURCREATE INTERNAL AND EXTERNAL CREATE INTERNAL AND EXTERNAL COMMUNICATION PLANCOMMUNICATION PLAN

AREAS OF CSR IMPLEMENTATION

ACCOUNTABILITY

ECO DEVP

ENVIRONMENT

LABOUR/HUMAN RTS

HR

CG

ETHICS

CSR

CSR AT WORKPLACECSR AT WORKPLACE

REMUNERATIONREMUNERATIONETHICAL HR PRACTICESETHICAL HR PRACTICESHEALTH/SAFETYHEALTH/SAFETYWORK LIFE BALANCEWORK LIFE BALANCEAGE OF EMPLOYEESAGE OF EMPLOYEESDOWNSIZINGDOWNSIZINGDIVERSITY IN WORK CULTUREDIVERSITY IN WORK CULTUREPRIVACYCONCERNS FOR FREEDOMPRIVACYCONCERNS FOR FREEDOMCONSISTENCY ACROSS DIFFERENT WORK CONSISTENCY ACROSS DIFFERENT WORK ENVIRONMENTSENVIRONMENTSTELECOMMUTING/WORKING FROM HOMETELECOMMUTING/WORKING FROM HOMEWOMEN AT THE WORKPLACEWOMEN AT THE WORKPLACE

CSR AND THE ENVIRONMENTCSR AND THE ENVIRONMENT

AIR POLLUTIONAIR POLLUTIONWATER POLLUTIONWATER POLLUTIONSOIL POLLUTIONSOIL POLLUTIONDEGRADATION OF THE DEGRADATION OF THE ENVIRONMENTENVIRONMENTDESTRUCTION OF LIVELIHOODDESTRUCTION OF LIVELIHOODINDUSTRIAL ACCIDENTS/WASTE INDUSTRIAL ACCIDENTS/WASTE DISPOSALDISPOSALE WASTEE WASTE

CSR INTERVENTIONSCSR INTERVENTIONS

EMPLOYEE VOLUNTEERINGEMPLOYEE VOLUNTEERING

INFRASTRUCTURAL SUPPORTINFRASTRUCTURAL SUPPORT

FINANCIAL SUPPORTFINANCIAL SUPPORT

PRODUCT/SERVICE SUPPORTPRODUCT/SERVICE SUPPORT

IMPORTANCE OF NGO PARTNERSHIPSIMPORTANCE OF NGO PARTNERSHIPS

INVOLVE GOVT AND NGOSINVOLVE GOVT AND NGOSCHOOSE NGOS DISPLAYING COMPETENCE CHOOSE NGOS DISPLAYING COMPETENCE AND GOOD RESULTS OVER TIMEAND GOOD RESULTS OVER TIMECAPABILITY TO ADVANCE PROJECTS ON A CAPABILITY TO ADVANCE PROJECTS ON A LARGE SCALELARGE SCALEREPUTATION/RELIABILITYREPUTATION/RELIABILITYPROFESSIONALLY MANAGEDPROFESSIONALLY MANAGEDPREDOMINANT POSITION IN SECTORPREDOMINANT POSITION IN SECTORINDEPENDENCE FROM COMPANY AND INDEPENDENCE FROM COMPANY AND AUTHORITIESAUTHORITIES

PART IIIPART III

CSR MONITORING, CSR MONITORING, MEASUREMENT AND MEASUREMENT AND

REPORTINGREPORTING

MONITORING AND MONITORING AND MEASUREMENTMEASUREMENT

MONITORING THROUGH NGOSMONITORING THROUGH NGOSEMPLOYEE LOYALTYEMPLOYEE LOYALTYCSR COMMITTEECSR COMMITTEEPERFORMANCEPERFORMANCEPERFORMANCE INDICATORSPERFORMANCE INDICATORSGLOBAL REPORTING INITIATIVESGLOBAL REPORTING INITIATIVESKPISKPISACCOUNTABILITY 1000 SERIESACCOUNTABILITY 1000 SERIESTBLTBL

REPORTINGREPORTING

CORPORATE SUSTAINABILITY REPORTCORPORATE SUSTAINABILITY REPORT

INTERNAL AND EXTERNAL STAKEHOLDERSINTERNAL AND EXTERNAL STAKEHOLDERS

INFORMATION ABOUT CHALLENGESINFORMATION ABOUT CHALLENGES

AND ACHIEVEMENTSAND ACHIEVEMENTS

COMMITMENT TO ENVIRONMENTAL AND COMMITMENT TO ENVIRONMENTAL AND SOCIAL RESPONSIBILITYSOCIAL RESPONSIBILITY

PERFORMANCE-CODE OF CONDUCT, PERFORMANCE-CODE OF CONDUCT, CG,MITIGATION OF RISKSCG,MITIGATION OF RISKS

ENVIRONMENT MGT ENVIRONMENT MGT

MEASUREMENT AND MEASUREMENT AND MONITORING TOOLSMONITORING TOOLS

EMPLOYEE AND CUSTOMER SURVEYSEMPLOYEE AND CUSTOMER SURVEYSPUBLIC ATTITUDE AND TRUST SVYSPUBLIC ATTITUDE AND TRUST SVYSEMPLOYEE SAFETYEMPLOYEE SAFETYWASTE MGTWASTE MGTPOSITIVE AND NEGATIVE MEDIA POSITIVE AND NEGATIVE MEDIA COVERAGECOVERAGEPEER AND EXPERT EVALUATIONPEER AND EXPERT EVALUATIONIMAGE AMONG FINANCIAL ANALYSTS AND IMAGE AMONG FINANCIAL ANALYSTS AND REGULATORSREGULATORSPERCEPTION AMONGST STAKEHOLDERSPERCEPTION AMONGST STAKEHOLDERS

CSR PROGRAMMESCSR PROGRAMMES

EDUCATIONEDUCATION

HEALTHHEALTH

LIVELIHOOD CREATIONLIVELIHOOD CREATION

SKILL DEVELOPMENTSKILL DEVELOPMENT

EMPOWERMENT OF WEAKER EMPOWERMENT OF WEAKER SECTIONSSECTIONS

ENVIRONMENTENVIRONMENT

COMPANIES TAKING CSR COMPANIES TAKING CSR INITIATIVESINITIATIVES

TATA GROUPTATA GROUPINFOSYSINFOSYSBHARTI ENTERPRISESBHARTI ENTERPRISESHCLHCLITC WELCOME GROUPITC WELCOME GROUPONGCONGCSAILSAILORCHID CHEMICALS AND PHARMAORCHID CHEMICALS AND PHARMANDTVNDTVAIRCELAIRCEL

SOME INITIATIVESSOME INITIATIVES

IBM- UPLIFTMENT OF TRIBALS IN SASANIBM- UPLIFTMENT OF TRIBALS IN SASANINDIAN PAINT INDUSTRY MAKING PAINTS MORE INDIAN PAINT INDUSTRY MAKING PAINTS MORE ENVIRONMENT FRIENDLYENVIRONMENT FRIENDLYFINANCIAL SERVICES-NEASING OF CARBON FOOTPRINTS-FINANCIAL SERVICES-NEASING OF CARBON FOOTPRINTS-RENEWABLE ENERGY ETC- HSBC, MAX NEWYORK LIFE, SCBRENEWABLE ENERGY ETC- HSBC, MAX NEWYORK LIFE, SCBE CHAUPALE CHAUPALADOBE, KPMG, PROMOTING ENTREPRENEURSHIPADOBE, KPMG, PROMOTING ENTREPRENEURSHIPRELIANCE- PROJECT DRISHTIRELIANCE- PROJECT DRISHTINDTV-GREENATHONNDTV-GREENATHONAIRCEL-SAVE THE TIGERAIRCEL-SAVE THE TIGERCOPENHAGEN- ENVIRONMENT ISSUESCOPENHAGEN- ENVIRONMENT ISSUESE WASTE MANAGEMENTE WASTE MANAGEMENT

PART IVPART IV

CORPORATE CORPORATE GOVERNANCEGOVERNANCE

CORPORATIONCORPORATION

A CORPORATION IS AN ARTIFICIAL BEING, INVISIBLE, INTANGIBLE,EXISTING ONLY IN THE CONTEMPLATION OF THE LAW. BEING THE MERE CREATURE OF THE LAW,IT POSSESSES ONLY THREE QUALITIES WHICH THE CHARTER OF ITS CREATION CONFERS UPON IT, EITHER EXPRESSLY OR AS INCIDENTAL AS ITS VERY EXISTENCE----(THE MOST)IMPORTANT ARE IMMORALITY AND, IF THE EXPRESSION MAY BE ALLOWED,INDIVIDUALITY:PROPERTIES BY WHICH A PERPETUAL SUCCESSION OF MANY PERSONS ARE CONSIDERED AS THE SAME, AND MAY ACT AS A SINGLE INDIVIDUAL.

ROLE OF CORPORATE ROLE OF CORPORATE GOVERNANCE`GOVERNANCE`

o STRONG VS WEAK PERFORMANCESTRONG VS WEAK PERFORMANCEo PUBLICLY OWNED BUSINESS VS PRIVATELY OWNED BUSINESSPUBLICLY OWNED BUSINESS VS PRIVATELY OWNED BUSINESSo PROSPECT OF ATTRACTING LONG TERM, STABLE CAPITALPROSPECT OF ATTRACTING LONG TERM, STABLE CAPITALo INCLUDES QUESTIONS OF STRATEGY,VISION OF TOP INCLUDES QUESTIONS OF STRATEGY,VISION OF TOP

MANAGEMENT,TRANSPARENCY,CODE OF CONDUCT, STDS OF MANAGEMENT,TRANSPARENCY,CODE OF CONDUCT, STDS OF PERFORMANCE, ACCOUNTABILITY ETCPERFORMANCE, ACCOUNTABILITY ETC

o DIRECTION OF BUSINESS PERFORMANCEDIRECTION OF BUSINESS PERFORMANCEo MEETING STAKEHOLDER INTERESTMEETING STAKEHOLDER INTERESTo RECONCILIATION OF CONFLICTING INTERESTSRECONCILIATION OF CONFLICTING INTERESTSo SYSTEMS FOR ACCOUNTING, AUDITING AND FISCL DISCIPLINESYSTEMS FOR ACCOUNTING, AUDITING AND FISCL DISCIPLINEo MANAGER DISCIPLINEMANAGER DISCIPLINE

Concept of Corporate Concept of Corporate GovernanceGovernance

CG aims at “enhancement of shareholder value, CG aims at “enhancement of shareholder value, keeping in view the interests of other keeping in view the interests of other stakeholders”.stakeholders”.

CG may be defined as a set of systems, CG may be defined as a set of systems, processes and principles which ensure that a processes and principles which ensure that a Company is governed in the best interests of all Company is governed in the best interests of all the stakeholders.the stakeholders.

Objectives of Corporate Objectives of Corporate GovernanceGovernance

Define clearly the rights, roles, Define clearly the rights, roles, responsibilities and accountability of all responsibilities and accountability of all stakeholders.stakeholders.

Continuous disclosure of material Continuous disclosure of material information - financial & non-financial.information - financial & non-financial.

High quality accounting practices.High quality accounting practices.

Protect investors’ interest.Protect investors’ interest.

Objectives of Corporate Objectives of Corporate Governance (Contd…)Governance (Contd…)

High level of transparency.High level of transparency.

Make Corporate boards an active body for CG.Make Corporate boards an active body for CG.

Bring about high level of public confidence in Bring about high level of public confidence in business and industry.business and industry.

GOVERNANCE AND MANAGEMENTGOVERNANCE AND MANAGEMENT

BOARD NOT PART OF THE MANAGEMENT BOARD NOT PART OF THE MANAGEMENT STRUCTURESTRUCTURE

LINE AND STAFF MANAGERS REPORT TO THE LINE AND STAFF MANAGERS REPORT TO THE CEO WHO HAS OVERALL RESPONSIBILITYCEO WHO HAS OVERALL RESPONSIBILITY

BOARD HAS BOTH EXECUTIVE AND NON BOARD HAS BOTH EXECUTIVE AND NON EXECUTIVE /OUTSIDE DIRECTORSEXECUTIVE /OUTSIDE DIRECTORS

EXECUTIVE DIRECTORS HOLD A EXECUTIVE DIRECTORS HOLD A MANAGERIAL ROLEMANAGERIAL ROLE

INDEPENDENT DIRECTORS HAVE NO INDEPENDENT DIRECTORS HAVE NO RELATION WITH THE COMPANYRELATION WITH THE COMPANY

ADDING TEETH TO ADDING TEETH TO CORPORATE GOVERNANCECORPORATE GOVERNANCESTRIVING TO ENSURE THAT CODE OF CONDUCT IS STRIVING TO ENSURE THAT CODE OF CONDUCT IS UNDERSTOOD AND ADHERED TO BY ALL MEMBERS OF UNDERSTOOD AND ADHERED TO BY ALL MEMBERS OF THE ORGANIZATIONTHE ORGANIZATION

PERFORMANCE MANAGEMENT SYSTEM SHOULD PERFORMANCE MANAGEMENT SYSTEM SHOULD RECOGNIZE AND REWARD ETHICAL BEHAVIOURRECOGNIZE AND REWARD ETHICAL BEHAVIOUR

EXCLUSIVE BACKGROUND CHECKS ON SENIOR EXCLUSIVE BACKGROUND CHECKS ON SENIOR MANAGEMENT OF THE ORGANIZATIONMANAGEMENT OF THE ORGANIZATION

SCREENING OF THIRD PARTIES WITH WHOM COMPANY SCREENING OF THIRD PARTIES WITH WHOM COMPANY DOES BUSINESSDOES BUSINESS

SCOPE OF WHISTLEBLOWER POLICIES EXTENDED TO SCOPE OF WHISTLEBLOWER POLICIES EXTENDED TO WIDER STAKEHOLDER GROUPSWIDER STAKEHOLDER GROUPS

INVESTORS, LENDERS ANALYSTS SHOULD PROACTIVELY INVESTORS, LENDERS ANALYSTS SHOULD PROACTIVELY CHALLENGE CG PRACTICESCHALLENGE CG PRACTICES

CONTDCONTDCHAIRMEN OF BOARDS SHOULD ACTIVELY MONITOR CHAIRMEN OF BOARDS SHOULD ACTIVELY MONITOR HOW INDIVIDUAL DIRECTORS PROACTIVELY HOW INDIVIDUAL DIRECTORS PROACTIVELY IDENTIFYING AND FULFILLING THEIR KNOWLEDGE IDENTIFYING AND FULFILLING THEIR KNOWLEDGE AND COMPETENCY LEVELSAND COMPETENCY LEVELS

COMPULSORY ATTENDANCE ON BOARD MEETINGSCOMPULSORY ATTENDANCE ON BOARD MEETINGS

MANDATORY BOARD AND AUDIT COMMITTEE MANDATORY BOARD AND AUDIT COMMITTEE EVALUATIONSEVALUATIONS

HEFTY MONETARY PENALTIES ON INDEPENDENT HEFTY MONETARY PENALTIES ON INDEPENDENT DIRECTORS AND AUDITORS WHO DO NOT CARRY DIRECTORS AND AUDITORS WHO DO NOT CARRY OUT THEIR JOBSOUT THEIR JOBS

SOX ACT 2002SOX ACT 2002PENALTY FOR CORPORATE FRAUD- UPTO 20 YRS PENALTY FOR CORPORATE FRAUD- UPTO 20 YRS IMPRISONMENT FOR ALTERING/DESTROYING IMPRISONMENT FOR ALTERING/DESTROYING DOCUMENTSDOCUMENTSCEOs LIABLE FOR UPTO 20 YRS IMPRISONMENT CEOs LIABLE FOR UPTO 20 YRS IMPRISONMENT WITH FINES UPTO USD 5 MN FOR CERTIFYING WITH FINES UPTO USD 5 MN FOR CERTIFYING FALSE ACCOUNTSFALSE ACCOUNTSTIME PD FOR ENGAGING IN LAW SUITS BY TIME PD FOR ENGAGING IN LAW SUITS BY DEFRAUDED INVESTORS ENHANCEDDEFRAUDED INVESTORS ENHANCEDACCTG FIRMS AND CONSULTACY/NON AUDIT ACCTG FIRMS AND CONSULTACY/NON AUDIT SERVICESSERVICESACCTG PROFESSION TO BE UNDER STRICT ACCTG PROFESSION TO BE UNDER STRICT SCRUTINY BY 5 MEMBER PVT SECTOR BOARD SCRUTINY BY 5 MEMBER PVT SECTOR BOARD WHICH WILL HAVE DISCIPLINARY AS WELL AS WHICH WILL HAVE DISCIPLINARY AS WELL AS COURT/SUBPOENA POWERSCOURT/SUBPOENA POWERS

CADBURY REPORTCADBURY REPORTPUBLISHED 1992-COMMITTEE CHAIRED BY SIR ADRIAN CADBURYPUBLISHED 1992-COMMITTEE CHAIRED BY SIR ADRIAN CADBURYREPORT RECOMMENDATIONS ADOPTED BY EU,THE US AND THE REPORT RECOMMENDATIONS ADOPTED BY EU,THE US AND THE WORLD BANKWORLD BANKBACKGROUND- MAXWELL GROUP OF COMPANIESBACKGROUND- MAXWELL GROUP OF COMPANIESPUBLICALLY TRADED CORPORATIONS SHOULD HAVE THREE PUBLICALLY TRADED CORPORATIONS SHOULD HAVE THREE OUTSIDE DIRECTORSOUTSIDE DIRECTORSPOSITIONS OF CEO/CHAIRMAN BY DIFFERENT PEOPLEPOSITIONS OF CEO/CHAIRMAN BY DIFFERENT PEOPLESUPREMACY OF THE BOARD, ITS INTEGRITY AND ACCOUNTABILITY.SUPREMACY OF THE BOARD, ITS INTEGRITY AND ACCOUNTABILITY.LISTED COMPANIES TO ANNUALLY REPORT TO THE SHARE LISTED COMPANIES TO ANNUALLY REPORT TO THE SHARE HOLDERS AS RGARDS ASSESSMENT OF RISKS AND THE HOLDERS AS RGARDS ASSESSMENT OF RISKS AND THE PROCESSOF DECISION MAKINGPROCESSOF DECISION MAKINGINDEPENDENT DIRECTOR SHOULD NOT SERVE FOR MORE THAN INDEPENDENT DIRECTOR SHOULD NOT SERVE FOR MORE THAN TWO TERMSTWO TERMSFINES AND JAIL TERMS FOR FRAUDFINES AND JAIL TERMS FOR FRAUD

CADBURY COMMITTEE CADBURY COMMITTEE REPORTREPORT

May 1991- Code Of best practicesMay 1991- Code Of best practices

Bd Should meet regularly, retain full and Bd Should meet regularly, retain full and effective control over the company , effective control over the company , monitor the executive managementmonitor the executive management

Clearly accepted division of Clearly accepted division of responsibilitiesresponsibilities

Non Executive Directors of sufficient Non Executive Directors of sufficient calibre and numbercalibre and number

contdcontd

Agreed procedure for furtherance of duties Agreed procedure for furtherance of duties of the Directorsof the Directors

All Directors should have access to the All Directors should have access to the advice and services of the Company advice and services of the Company SecretarySecretary

Non Independent directors should have Non Independent directors should have independent judgement on issue regarding independent judgement on issue regarding strategy, performance,resources , key strategy, performance,resources , key appts etcappts etc

LEGAL OBLIGATIONS OF LEGAL OBLIGATIONS OF DIRECTORSDIRECTORS

REPRESENTING THE INTEREST OF REPRESENTING THE INTEREST OF OWNERSOWNERSSCRUTINY OF STAKEHOLDERSSCRUTINY OF STAKEHOLDERSTHE FIDUCIARY DUTIESTHE FIDUCIARY DUTIESTHE DUTY OF LOYALTY AND FAIR DEALINGTHE DUTY OF LOYALTY AND FAIR DEALINGDUTY OF CAREDUTY OF CAREDUTY NOT TO ENTRENCHDUTY NOT TO ENTRENCHDUTY OF SUPERVISIONDUTY OF SUPERVISIONDEALING WITH HOSTILE TAKEOVER DEALING WITH HOSTILE TAKEOVER OFFERSOFFERS