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.