Volume. XVIII No. 12/2013

IODInstitute of Directors

Building

Tomorrow’s

Boards

India’s Parliament mandates

Corporate Social Responsibility spending, through a statutory

provision under the

Companies Act 2013

8th International Conference on

CORPORATE SOCIAL RESPONSIBILITYon 17-18 January 2014at Hotel ITC Windsor Manor, Bengaluru (India)

H. E.Sri H.R. Bhardwaj Governor of Karnataka

Dr Tayeb A. KamaliVice-Chancellor, Higher

Colleges of Technology, UAE

Smt. Nishi VasudevaDirector Marketing, Hindustan

Petroleum Corporation Ltd.

Hon. Dr. M. Veerappa MoilyUnion Cabinet Minister for Petroleum and Natural Gas

Dr Bhaskar Chatterjee IASDG & CEO, Indian Institute

of Corporate Affairs

Prabh DasMD & CEO, HPCLMittal Energy Ltd.

Justice M N VenkatachaliahNational Chairman, IOD &

former Chief Justice of India

A.K. MirchandaniChairman-cum-Managing

Director, PEC Ltd.

Ashish K ChauhanMD & CEO, Bombay

Stock Exchange

P DwarakanathAdvisor – Group Human

Capital, Max India

Adil MaliaPresident - Group HR

Essar Group

R RamananMD & CEO, CMC Limited

Deepak AmitabhChairman cum Managing

Director, PTC India Ltd

Gunelie WinumExpert Consultant International

Programs, Norway

www.iodonline.comGet Quality Times on our website

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A Journal of the INSTITUTE OF DIRECTORS • December 2013 • India

This month's Articles tailored for you

Shyam Srinivasan MD & CEO, Federal Bank Ltd

Mao MohapatraChief Executive Officer,

Mahindra Comviva

Sanat HazraDirector – Technical, The Times of India

listen to the galaxy of experts at the

many more...

It will be interesting to see if this combination of legal prescription and open market will force to

yield the desired intent: to increase CSR among the business community in India.

CSR-Being Good is BetterRekha Sethi*

Future challenges for Public Sector Leaders

Sir Leigh Lewis*

Board Evaluation-A Window into the BoardroomCristina Ungureanu*

Re-thinking Corporate Social Responsibility Colin Coulson-Thomas*

P - 39

Kaushik Mukherjee IAS, Chief Secretary, Govt. of Karnataka

R K DubeyChairman cum MD, Canara Bank Ltd.

Dr. Shalini RajneeshIAS, Secretary to Govt., Dept of. Personnel & Administrative Reforms, Govt. of Karnataka

Richard Howitt MEPMember of the European Parliament for the East of

England

Muhammad Abdullah YusufChairman, Pakistan Institute of Corporate Governance

5

11

13

16

CONTENTS

EDITORPradeep Chaturvedi

SUB EDITORReji Mathew

MANAGER DESIGNTeena Lejo

DelhiM-52, (Market) Greater Kailash - II,New Delhi-110048Tel: 011-41636294,41636717Fax: 011-41008705E-mail: info@iodonline.comWebsite: www.iodonline.com

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Total Pages - 48

EDITORIAL BOARDLt Gen JS Ahluwalia, PVSM (Retd.)Pradeep ChaturvediManoj K. RautAshok Kapur, IAS (Retd.)

IOD (HEAD OFFICE)

FROM THE EDITOR

Skeptics often dismiss that 'sustainability' is a

peripheral issue as a fad, as green washing or as a

non-serious business issue. The Management

Guru, Michael Porter, has introduced a new

framework called “shared value”. In 2006, Porter

along with his colleague Kramer, at Harvard

University introduced the concept of Creating

Shared Value (CSV). This was followed up with

the practice in 2011. At the heart of the CSV

framework is the idea that the competitiveness of a

company and the system surrounding it are inter-

reliant. And, if companies act on this inter-

dependency, they can create value for their

businesses, as well as society. In turn, this could

launch “the next wave of global growth”. CSV is

seen as a more powerful approach than CSR and

even sustainability, a term that is often associated

more with the environment.

What is wrong with current approaches? “In the

CSR formulation”, Porter said, “there is a 'check the

box.' You have to have a recycling programme, you

have to do carbon inventory, you have to save water

and you have to save packaging. There is a generic

set of sustainability check boxes that everybody has

to do. When companies are dealing with those that

is not where the excitement comes. That is not

where they really get it.”

Sustainability has become a mainstream issue

though the nomenclature is still very confused, and

Rio+20 had agreed on 32 definitions to describe

sustainability. There is lot of people using different

phrases to describe the same family of issues. The

thinking and understanding of the companies varies

about whether they have made the leap from CSR to

Shared Value or not.

CSV is about seeing the opportunities, not the cost,

of addressing social and environmental issues.

Michael Porter says “the more you start to help

companies see that this is really about productivity

and efficiency and the use of technology……, then

all of a sudden the whole level of energy, focus and

the results dramatically improve.” Fundamentally,

they have shifted to using social and environmental

issues as a means to creating a business advantage.

IOD has been encouraging its networking partners

to reorient their thinking. Golden Peacock Awards

and our Conferences have been important medium

of promoting new concepts. Sustainability

Conference at London, in October 2013,

highlighted mainstreaming of the concept; and the

CSR conference scheduled in January 2014 at

Bangaluru, will be an opportunity to showcase

efforts of business as to how they have focused on

CSR and CSV as means o f c rea t ing

competitiveness and business advantage.

Pradeep Chaturvedi

Vice President, IOD

SENIOR MANAGER - BDArijit Ghosh

CSR to Create Business Advantage

5 Future Challenges for Public Sector Leaders Sir Leigh Lewis

11 Board Evaluation-A Window into the BoardroomCristina Ungureanu

13CSR-Being Good is BetterRekha Sethi

16Re-thinking Corporate Social Responsibility

Colin Coulson-Thomas

23 Corporate Governance-Best Board Practices

J Sundharesan

27Sustainability in PracticeSanjeev Minocha

408th International Conference on CORPORATE SOCIAL RESPONSIBILITY Agenda

New Directions of Corporate Social Responsibility in IndiaPradeep Chaturvedi

32

th 8 International Conference on

CORPORATE SOCIAL RESPONSIBILITY Also presentation of Golden Peacock Awards for Corporate Social Responsibility, both national & global), Innovation Management

17–18 January 2014, Bengaluru (India)

Global Summit on BUSINESS EXCELLENCE

Also presentation of Golden Peacock Awards for Business Excellence (both Global &National)

21 - 22 March 2014, Chennai (India)

MANY THINK ABOUTCHANGING THE WORLDWE ARE ACTUALLY DOING ITTransforming Corporations through our holistic programmes so together we can create a better world

Why we focus onConferences ?

Conference creates understanding • Understanding creates networking • Networking creates experience

Experience creates knowledge • Knowledge creates technology • Technology creates convenience

Convenience creates well being • Well being creates feelings • Feelings create motivation

Motivation creates involvement • Involvement starts a movement • Movement leads to desired behaviour

DUBAI GLOBAL CONVENTION incorporating

24th World Congress on effective Leadership &driving Quality & Business Networking Meet

Also presentation of Golden Peacock Awards for Quality, Training & Innovative Product/ Service

15- 17 April 2014, Dubai ( UAE)

16th World Congress on ENVIRONMENT MANAGEMENT &

th25 IOD Annual Day

Also presentation of Golden Peacock Awards for Environment, Occupational Health & Safety and Eco-Innovationand IOD Distinguished Fellowships

11 - 12 July 2014,New Delhi (India)

LONDON GLOBAL CONVENTION 2014 incorporating

14th International Conference on CORPORATE GOVERNANCE and SUSTAINABILITY & Global Business Meet

Also presentation of Golden Peacock Awards for Corporate Governance, Sustainability, (bothnational & global) and HR Excellence

29-31 October 2014, London (UK)

Golden Peacock Awards

For last date of submission of applications

Visit us at: www.goldenpeacockawards.com

Masterclass for Directors

leading to Certified Corporate Directorship

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Mark the following Dates in your Diary(Dates are tentative pl confirm from the website www.iodonline.com)

UPCOMING EVENTS 2014

IODInstitute of Directors

Building

Tomorrow’s

Boards

25th World Congress on Total Quality

TOTAL QUALITY MANAGEMENTAlso presentation of Golden Peacock Awards Total Qulity,Training and Innovation Product / Service

16-17 January 2015, Mumbai

Sir Leigh Lewis*

Introduction

Looking up 'leadership' on Google produces the remarkable

total of 457 million results. Can there be anything left to say?No

airport bookshop is complete without dozens of titles ranging

from 'The One Minute Manager' to the kinds of tomes, which are

infrequently bought and probably even less frequently read.

• first, to say something about what, in my view, is different

about public sector leadership from leadership in general;

• secondly, to identify some inspired public sector leaders as

guides to successful public sector leadership; and

• thirdly, to attempt to draw some conclusions as to the

characteristics that successful public sector leaders need now

and, in line with the theme of today's seminar, will need in the

future.

What is Different about Public Sector

Leadership?

Some might say nothing. That leadership is leadership. That

great leaders will succeed whatever the environment.

Well maybe. No doubt some truly exceptional individuals are

indeed capable of conquering all.

But in general that is not my view. I believe that there are some

fundamental differences in the environment in which public

sector leaders have to operate compared to the private sector.

Would cite three in particular; multiple stakeholders, multiple

objectives and freedom of action - or the lack of it.

Firstly, multiple stakeholders. No one would seriously suggest

that today's private sector leaders have only to worry about their

shareholders. Clearly they have to satisfy, or at least respond to,

many other stakeholders, including the City, the media,

regulators and, last but by no means least, their customers.

But for the most part they do have a pretty clear idea who calls

the shots. If it's the Chief Executive in a PLC, it's the Chair and

the Board. If it's the Chair, it's the Board and, in particular, the

other non-execs. If it's the Managing Director of a subsidiary it's

the Group Chief Executive. And so on.

Contrast that with, to take one example I know something about,

a Whitehall Permanent Secretary. Formally they report to, and

are appraised by, the Head of the Civil Service (though the

Cabinet Secretary - controversially the roles are now split - will

also have a major say in how they are assessed). But day-to-day

it's their own Secretary of State who is the key figure. While he

or she cannot in theory fire them, in practice it becomes

impossible to continue without their support.

But that is not the end even of the direct accountabilities. As

Accounting Officer the Permanent Secretary is also directly

accountable to Parliament for every penny spent by their

Department and liable to be called before the Public Accounts

Committee to answer for that expenditure.

But these are only the direct accountabilities. In practice No 10

are ever on the look-out for the Permanent Secretary thought not

to be cutting it as, under the present Government, is the Cabinet

Office under Francis Maude. Special Advisers - in No. 10, the

Cabinet Office, Treasury and, of course, the Permanent

Secretary's own Department - are never far away. Nor are the

Chairs of Select Committees or the Department's other

Ministers besides the Secretary of State. Beyond that Permanent

Secretaries are accountable also to their own Department's non-

executives whose role has become both greater and more

formalised under the present Government. Indeed the lead

Departmental non-executive has been given the specific remit,

in extremis, to recommend to the Prime Minister the Permanent

Secretary's removal.

Article

Future Challenges for Public Sector Leaders

QT- December 2013

5

Of course, there are many other Private Sector leaders besides

Permanent Secretaries. But the general proposition holds true.

The Local Authority Chief Executive, the NHS Trust Chief

Executive, the Headmaster and the Prison Governor all tend to

have much more complex accountability lines than do their

counterparts in the private or third sectors.

Secondly, multiple objectives. Again it is simplistic to believe

that, in the private sector, chief executives have a single

objective and that profit is all that matters. As the 'Deepwater

Horizon' disaster which overtook BP shows, companies have

today to do much more to ensure their success, and indeed their

survival, than simply deliver earnings per share in line with City

expectations.

But at least there are clear financial measures by which success

is judged. In the public sector there are not. While almost all

public sector leaders have objectives and are measured against

them, they tend to be quite a bewildering mixture of the

financial, the practical and the merely desirable. As Permanent

Secretary in the DWP, for example, I had objectives for,

amongst many other things, delivering major projects, making

financial savings, reducing sickness absence and increasing

staff diversity. All were highly desirable. But every one of my

stakeholders in practice had a different priority amongst them.

And there was certainly no agreed prioritisation.

Nor, as the famous case of my namesake, Derek Lewis - the one

time head of the Prison Service - shows, is delivering on your

objectives any guarantee of success. Whatever the reasons he

simply lost the confidence of his political masters and had to go

notwithstanding that he was delivering on all his key objectives.

Thirdly, freedom of action. At the risk of tedium, it is naive to

suggest that any leader - private or public - ever has total

freedom of action. All leaders have, for example, to act within

the law and preferably ethically, to abide by corporate decisions

and policies, and to keep key stakeholders on board.

But there is no doubt that private sector leaders in general have

far greater freedom of action - freedom to hire and fire, freedom

to reward success and freedom to make key business decisions -

than do leaders in the public sector. Indeed one of the reasons

why many of those recruited into the public sector from outside

ultimately fail is that they too readily believe the assurances

which they are given during the recruitment process that they

will have virtually the same freedoms that they have had in the

private sector and they only discover too late that, in practice,

getting things done is a far harder and more frustrating business

than ever they had envisaged.

One key sub-set of that is the basic freedom to speak. Not many

days go by without one or more private sector chief executives

taking to the airwaves, twitter or old fashioned print to explain

and, if necessary, defend their businesses and decisions.

Public sector practice in this respect varies. By tradition, for

example, local authority Chief Executives, heads of NHS Trusts

and Vice Chancellors have been much more willing and able to

speak publicly than senior civil servants. But the common

factor affecting almost all public sector leaders, including now

Chief Constables, is that they have above them political masters

who tend both to want the airwaves for themselves and who

tend not to want to hear themselves being challenged or

contradicted by their own officers or officials. In almost every

case the safe space in which the public sector leader can speak

publicly, and indeed on the record even to their own staff, is far

more limited than is the case for their private sector

counterparts.

Public Sector Leaders

So if there are, as I submit, some fundamental differences in the

environment in which public sector leaders have to operate by

comparison with their private sector counterparts, are there

nevertheless some examples of public sector leaders whose

careers show what can be done?

There are, of course. At the risk of a wholly capricious rather

than scientific selection here are three; Lord Reith, the first

Director-General of the BBC; Field Marshall Montgomery of

Alamein;and Robert Mark, Commissioner of the Metropolitan

Police in the early 1970s who led the battle to rid the Met of

corruption and whose famous quote was “that a good police

force catches more crooks than it employs”. Let me be clear that

I claim no special knowledge of my three examples and that, in

order to accommodate them, I am having to use a broad

definition of the public sector.

But in one sense that illustrates the problem. They are at least

names most of you will have heard of, and that's not easy to

achieve in relation to so called public sector leaders if

politicians are excluded. There are other candidates, of course;

Alanbrooke, Chief of the General Staff in World War Two; and,

much further back, legendary figures such as Elizabeth Fry, the

famous prison reformer.Indeed I would be interested to hear

what other names this audience might come up with. But the

interesting thing is that in each case I have had to go back to the

last century to find public sector leaders whose names will be

known to many; try as I might I could not come up with any so

QT- December 2013

6

far from the 21st Century.

My top three, Reith, Montgomery and Robert Mark were all also

operating in rather unusual circumstances; one against the

background of war and the other two from the relative

independence of the BBC and the Metropolitan Police

respectively.

They were also unusual in that either the circumstances in which

they were operating or the force of their own personalities, or

indeed both, gave them an unusually large degree of freedom of

manoeuvre and an ability to speak out. All were, by the

standards of today's public sector, relatively unencumbered by

political control either because of the circumstances in which

they became leaders or the roles they held. Compared with

today's public service leaders in the civil service, local

authorities, schools, the NHS, the police etcall three had more

independence and more freedom.But they also had something

else; all were examples of leaders in action; they had passion,

conviction and belief. They were unafraid. They were prepared

to take risk and put their reputation on the line. They all thought

they could make a difference.

The characteristics of successful public service leaders – today

and in the future

Which takes me to the heart of my address today; within the

environment in which today's public sector leaders have to

operate, and with some examples from the past to guide us, what

are the key characteristics that public service leaders need to

have today, and will need in the future?

Everyone will have their own list but, based on my own

experience and observations, I want to suggest five; vision;

values;visibility; determination and, last but by no means least,

courage.

First, vision. Perhaps a truism, but true nonetheless, to say that if

you don't know where you're going, or even if you do but can't

explain it to anyone else, don't be surprised if no one else has any

idea of where you're going either.

thTaking command of a demoralised 8 Army in North Africa in

August 1942, and expecting an imminent attack by Rommel,

Montgomery told his officers at their first meeting: “if we are

attacked then there will be no retreat. If we cannot stay here

alive, we will stay here dead”.

Not perhaps the most attractive vision that a public service

leader has ever put forward but a clear and unambiguous one

nonetheless. It no doubt left none of those listening in any doubt

about his intentions.

Much more difficult, in one sense, to put forward such a stark

but clear vision today in a situation where most public sector

leaders lack the immediacy of the challenge that faced

Montgomery, and where they operate amidst much complexity

and ambiguity. But that makes it more important for public

service leaders to work out what it is they want to achieve and

then to tell it to those who they need to achieve it.

And that applies not just to the Chief Executive, the Permanent

Secretary or the Vice Chancellor. It applies every bit as much to

the ward sister, the police sergeant and the jobcentre manager.

For they are the real leaders whom the mass of public sector

workers listen to and see day to day.

Secondly, values. Hardly possible for any organisation of scale,

public or private, to exist now without some statement of

values.Have been involved in drawing up a number myself.

Tended to involve long, often tedious, discussions; focus

groups and, worst of all, consultants of one description or

another, in coming up with words little different from those of

every other organisation.

Easy to be cynical.But actually values matter. That is because

the words themselves are generally a proxy for an underlying

belief that it is not just what you do but how you do it that makes

for a successful, or unsuccessful, organisation.

The legendary Lord Reith - the first Director General of the

BBC - and still today a controversial figure in some respects -

established not just the independence of the BBC - most notably

during the General Strike of 1926 - but also its moral compass.

Speaking many years later in 1954 at the time of the creation of

ITV he said “Need we be ashamed of moral values, or of

intellectual and ethical objectives?”

When Gus - now Lord - O'Donnell became Head of the Civil

Service in 2005 he introduced what rapidly became called his

four 'Ps' – pride, professionalism, pace and passion. He could

have chosen other words but what mattered was his nailing his

colours to a mast by setting out in just four words the qualities he

expected of every civil servant from the most junior to the most

senior. And throughout his six years as Head of the Civil Service

he repeated those four words endlessly bringing to mind the

famous Ronald Reagan quote that “it's only when you're sick to

death of saying it that people are beginning to listen.”

It is my belief that if a leader has no set of values, they have no

compass with which to guide their judgements. And if that

applies to those at the top of the leadership tree it applies

perhaps with even more importance to those at the front line of

QT- December 2013

8

leadership in the public sector. Does anyone believe that the

failings in the NHS in Staffordshire - whatever the contribution

of unrealistic targets and a senior leadership which had lost sight

of its true purpose - would have happened if the key first line

leaders had remained true to the values and principles which

they no doubt all idealistically had when they first joined the

NHS?

Thirdly, visibility. As I used to say frequently during my own

time in office, it's hard to lead from behind an office desk. In the

DWP - a huge Department of over 100,000 people - we had an

enormous problem of staff disengagement. I will always

remember our first staff survey after taking up my post of

Permanent Secretary in 2005 showing that just 11% of our staff

had confidence in their senior management.

There were, of course, many reasons for that. The Department

was going through a period of massive staff reductions - 30,000

in three years - and many people were fearful for their jobs and

their future. Senior managers had become all consumed with the

task simply of delivering the changes that Ministers were

demanding. But there is no doubt that one of the key reasons

why staff had such little confidence in their senior managers is

that they almost never saw them. Most might as well have been

from the planet Zog for all the actual visibility they had.

Diagnosis was in many ways the easy bit. Doing something

about it was far harder. In a huge dispersed organisation it is

simply impossible for senior managers to be everywhere. But

based on ideas put forward to the top team by a group of junior

staff who we asked to be brutally honest to us we began to

change. We placed a huge premium on managers getting out to

meet their staff; we dramatically increased the quantity and

quality of our own communications, both upwards and

downwards; most symbolic of all we introduced a requirement

for every one of our 300 top leaders - the Senior Civil Service

group as we called them - to spend at least one week each year

working on a real customer facing job. I worked myself in

successive years in a jobcentre, taking calls in one of our call

centres and on a fraud team amongst others.

And the result? By the time I retired in 2010 confidence in senior

management had risen to a staggering 22%! A doubling if your

glass is half full. Still an awful figure in absolute terms if your

glass is half empty.

But it illustrates a truth. If, at whatever level, you aspire to be a

leader, you have to be where your people are. They may like you

or hate you - as some fascinating new research for today's

seminar shows, they may often do both at the same time - but

they have to believe you are real and that you have some

understanding of their world. So turn off the e-mail, leave the in-

tray, ignore the phone and go out and talk to the people you lead.

You may be amazed at the impact it has.

Fourthly, determination. Leadership - even more in the public

sector than in the private I believe-can often be staggeringly

frustrating. As I set out in the introduction to this talk about the

environment in which public sector leaders operate, there can

all too often be a myriad of obstacles to be overcome, a plethora

of people to be consulted and a Pandora's box of interests to be

accommodated. It is all too easy to see why, against that

background, many at the top of the public sector settle for the

lowest common denominator.

But not all. For the best of public sector leaders display the

resilience to keep coming back up for what they believe in

despite all the obstacles and difficulties. Ian Blair, for example,

as Commissioner of the Metropolitan Police, pushing forward

the creation of police community support officers - PCSOs in

the jargon - despite the opposition of a myriad of vested interests

both within the police service and outside; Martin Narey, one

time Head of the Prison Service and later Chief Executive of

Barnardo's, tackling similar vested interests both inside and

outside the Prison Service to introduce greater decency and

compassion in the treatment of offenders; Eliza Manningham-

Buller, the Head of MI5 during my time at the Home Office,

pressing for the resources and skills she believed her

organisation needed to help keep this country safe. All were

examples of committed public service leaders not allowing

themselves to be deflected from what they believed to be right.

And if that is true at those rarified levels it is even truer at the

coal face. I was privileged to meet countless junior and middle

managers during my time in Jobcentre Plus and the DWP who

were determined to improve the quality of service to the public

no matter what obstacles the 'machine' routinely put in their

way.

Brilliant public service leaders are great. But resilient and

determined ones are better. It's the latter who really change the

world around them.

Fifthly, and finally, courage. In the end all public sector leaders -

at all levels - face times when doing what they know to be right

takes courage.

When Robert Mark was first asked by the then Home secretary,

Roy Jenkins, in 1967 to move from his post of Chief Constable

of Leicestershire to the Metropolitan Police as an Assistant

QT- December 2013

9

Commissioner he said that it felt “like the representative of a

leper colony attending the annual garden party of a colonial

governor”. His task was vast. As one obituary of him said when

he died in 2010, “at the time of his arrival, corruption within the

detective branch of the force was endemic and cynical”.

Tackling that corruption was no easy task and entrenched

interests within Scotland Yard made every effort to block him.

But he went after those interests ruthlessly, leading to the early

departure of nearly 500 officers, some 50 of whom appeared in

court.

Most of us will never be required to show the degree of courage

that Robert Mark had to show to take on that task but all public

sector leaders will, at some stage in their career, be faced with a

choice between doing the right thing and doing the easy thing. I

would love to tell you that in my own career I always did the

right thing but it wouldn't be true; but I like to think that on the

occasions when it really mattered I did. And once I was in a

position to do so I tried to stand up for others doing the right

thing also. I hope all of you in this audience who are, or who

aspire to be, public service leaders will feel able to show

courage when it is needed.paint the vision, live the values, be

always visible, never lack for determination and be brave. Piece

of cake really, you can't fail.

Sir Leigh Lewis KCB is former Permanent Secretary at the Department for Work and Pensions. Currently visiting fellow at University of Greenwich and Independent Director on the Boards of Aviva, Serco and PricewaterhouseCoopers

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Cristina Ungureanu*

Board behavior and effectiveness are becoming increasingly

visible to investors and other stakeholders. In the past few years,

the European Commission has reinforced its focus on the

corporate governance matters, issuing several rules and

guidelines in this regard. Most of these raise, among other

aspects, the issue of increased board responsibility in the

corporate governance framework through better functioning

and more appropriate structures.

In accordance with most best practice requirements laid out in

corporate governance codes, the majority of European listed

companies are now conducting board performance evaluations.

Board evaluation is increasingly acknowledged as a vital

process for improving board performance and dynamics,

whatever the size, status or type of organization. If thoroughly

conducted, a board evaluation (also called “board assessment”,

“board review”) has the potential to significantly enhance board

effectiveness, maximize strengths and tackle weaknesses.

Companies have various approaches to board evaluation, in

terms of methodology and objectives. In setting up the

framework, a company should ask itself whether the exercise is

the result of regulation or a commitment to good governance

thus merely a compliance exercise, or rather one aimed at

sustaining the performance of the board. While meeting

regulatory requirements may be part of the motivation behind

this exercise, the primary driver should be a desire to build a

high-performing board, well-suited to anticipate, meet and

overcome the challenges ahead. Increasingly, boards are

moving away from the box-ticking mentality towards utilizing

evaluations as a tool to ensure they are aligned with the

company's long-term strategy.

Aside from the need for compliance with standard regulation, a

firm's approach should be subject to its board's strategy, past or

upcoming circumstances and the objectives of the assessment

process. In-house processes may have the advantage of causing

less concerns to boards that are reluctant to conduct a board

evaluation. However, adopting only an internal mechanism

throughout a board lifecycle may refrain board members from

revealing some aspects that could be problematic, thus eroding

the real picture. In line with general best practice an external

evaluation should take place at least every three years within the

board cycle. Several companies engage an external consultant

more often, either annually or once every two years. Companies

do not generally maintain a standard rule for such a schedule,

which would not even be compelling as boards may experience

interesting dynamics from one year to the next.

Specialization and independence of the external evaluator are

key. Regular use of an external specialized consultant can

improve board performance assessments by bringing an

objective view and by providing a 'best practice' perspective.

Given the potential conflicts, the external facilitator should

neither have an ongoing nor recent relationship with the

company, i.e. not engaging in other consulting services for the

company or management. According to some emerging

regulation (already in Italy and UK), companies must disclose

publicly whether an external evaluator has any other connection

with the company. The problem in most markets however, is the

limited number of specialized board evaluation consultants. As

with all market issues, greater demand, however, would likely

engender a better offer.

The involvement of the external party in the process can have

several levels: it could offer independent advice to the board

throughout the process, or simply act as impartial facilitator.

Companies generally prefer the former approach, which

ensures the most effective process, in the same time releasing

the board from the pressure of conducting an evaluation

internally.

A thorough and accurate board evaluation process can identify

issues and enact reforms to improve performance. The board

should agree in advance to the following:

• Scope and purpose of the evaluation

Board directors should have a shared commitment to the

Article

Board Evaluation-A Window into the Boardroom

QT- December 2013

11

scope and purpose of theevaluation.

• Designated party

If done internally, the board should agree on a board member

or committee to oversee the evaluation; alternatively, boards

must appoint an independent, specialized external consultant

to conduct the evaluation.

• Methodology and subjects included in theprocess

This should include how the evaluation is conducted (e.g.

questionnaire, individual interviews or both) and whether the

evaluation extends from board to committees and to

individual directors.

• Areas of Valuation

The board should agree in advance on the main areas to be

examined. These include board agendas, information flow,

the effectiveness of board meetings, the performance of

individual committees, the relationship between the board

and senior management, board's approach to strategy, board's

approach to governance.

• A post-evaluation review should identify issues or threats,

should embrace opportunities and adopt reforms which may

be required.

Particularly if conducted by an external consultant, the

evaluation process includes a review of board documentation,

governance documents, charters, minutes, agendas and

observations of board meetings. This part of the assessment is

very important both as a preparation ahead of the discussions

with the board members, and for enabling a complete

assessment of the board functioning. Major facts happen during

the year at the level of the board. These are to be acknowledged

by the external advisor and brought back to board members'

analysis during the interviews.

The methodologies used to determine the evaluation output

vary. The primary tool used in both jurisdictions is the

questionnaire, although a tendency towards increasing use of

interviews has emerged. While questionnaires address

questions related to past performance, interviews allow for more

space to approach the future plans and strategy of the board.

Interviews also enable open discussions and diversity of

interpretations, expanding the more closed questions that

questionnaires are based upon.

The evaluation covers a wide range of issues, including

competency of board members, information flow, board

meeting dynamics, relationship with senior management,

quality of board supervision and decision-making. While in the

past boards used to be primarily internally focused, today they

have to proactively scan the external environment for things that

might impact the company. Therefore, within the evaluation

exercise, forward-thinking companies place special emphasis

on the board's role in strategic decisions, aside from its

monitoring tasks. The independent, specialized evaluator

assists boards in answering some important questions, such as

what should the board be doing in the critical areas of oversight,

such as strategy and risk; and how and to what extent can the

board be positioned as a strategic partner with the management.

However, board assessments are not a given remedy to boards'

problems. Even if an annual assessment is conducted, there is

no guarantee that a board will implement needed changes.

Various approaches may be taken by the board members while

engaging in the evaluation process, whether conducted

internally or externally. They may approach evaluations as a pro

forma exercise, which can minimize insights, or they could take

an honest look at whether board practices and composition are

optimized to meet the company's long-term goals. Surely, the

latter approach enhances the effectiveness of the outcome of

the evaluation.

Board evaluation should not be a mere function of compliance

with the regulations; instead it should be a stimulating process

for the board to acknowledge and reflect on its current

framework, its strong and weak points, on opportunities to

improve its functioning and performance. Boards will

effectively address any limits or weaknesses only when they

acknowledge what these are. An effective and well-governed

board is willing to proactively consider the findings of the

evaluation, holding open discussion of the findings, identifying

issues for improvement and trying to enact improvements.

Communicating the outcome of the board assessment process is

an important means for the follow-up implementation and for

enhancing dialogue with the stakeholders on board matters.

The board sets the tone at the top. Members are selected via a

thoughtful process, considering their skills, characters, values

and cultures to align them with the company's own culture,

values and strategy. When boards evaluate their qualifications

and performance, through self-evaluation, peer evaluation, or

third-party evaluation, they should consider whether specific

skills have been exercised and which skills need improvement.

Then it can more effectively draw a plan to acquire any talent

needed to round out the composition. Surely talent can be

recruited to succeed board members whose terms are coming to

an end; but the required talent may also be developed within the

existing board through board education. Integrity should be part

of this review, as should competencies, behaviors and

commitment of board members.

*Cristina Ungureanu holds a PhD in Finance and a Masters degree in International Affairs. She is a well-known expert and thought leader in global corporate governance, investor relations, shareholder services and regulatory issues.

QT- December 2013

12

Rekha Sethi*

Much fuss has been made about corporate social responsibility

(CSR) of late though the idea of doing social good is as old as the

society itself. Individual philanthropy and state welfare have

always been there in some form or the other. But CSR

institutionalizes socially responsible behaviour and makes it

obligatory. CSR has the transformational capacity that

philanthropy and welfare never had.

What makes CSR more important than philanthropy and welfare

is the fact that business organizations have enveloped the

society. They are the biggest users of natural and human

resources and the biggest polluters too. Their organization

composition has the greatest bearing on socio-economic

formations and their trading practices influence relationships

between nations. Moreover, their ethics determine the quality of

politics and governance.

CSR- Corporate Hobby to Corporate Duty

Therefore, it is only natural that governments and citizens now

seek more responsible behaviour from companies. The New

Companies Act makes CSR mandatory for companies. Now,

Indian companies have to spend at least 2 per cent of their

previous 3 years' average profits on CSR activities and report

about the compliance, or the lack of it, in their financial

statements. In one swoop, CSR has gone from being a corporate

hobby to corporate duty.

Also, as stakeholders' become sensitive to the risk of social

disapproval, companies are looking to secure their longevity

and competitiveness by projecting themselves as sensitive and

responsible enterprises.

CSR is about Generating Wealth Responsible

In addition to making socially-responsible behaviour obligatory

and systemic, CSR has also brought in a fundamental change in

the approach to doing good: traditionally, one first focused on

getting rich any way one could and it was only later that one used

the acquired wealth to offer succor to people. Global business

history is full of stories of robber barons acquiring charitable

piety in old age. But CSR is about generating wealth

responsibly. This binding of wealth creation with social

responsibility makes everybody a beneficiary of somebody

getting rich instead of one getting rich at the cost of others.

However, it is one thing to have government laws and company

policies for CSR but quite another to achieve something on the

ground. While there are many successful CSR programmes in

operation, their scale and coverage is miniscule in the context of

pervasive deprivation and inequities in the country.

Two major Bottlenecks that Stifle CSR

There are two major bottlenecks that stifle CSR: first, the lack of

organizational and implementation skills; and second, the lack

of coordination between companies and local governments.

These shortcomings are going to be exposed even more starkly

as the new CSR law kicks in.

The incoming CSR legislation will create an annual money pool

as large as Rs 15,000 crore. But there are only a handful of

proven CSR designing and implementation agencies. Few

companies have CSR expertise at either the executive or the

board level.

To put the CSR funds to proper use, Indian companies will have

to invest both in internal CSR capabilities and in external CSR

networks. For some of the large companies, the 2% amount

could be quite substantial – more than 200 crore in some cases –

and it will be a shame if such amounts are frittered away.

Article

CSR-Being Good is Better

QT- December 2013

13

Each Company to Select its Focus Area

First of all, each company must select its focus area for CSR.

India has a surfeit of problem areas to choose from – healthcare,

education, training, water, agriculture, social discrimination,

gender exclusion and so on. A lot of first timers in CSR tend to

spray funds on multiple problems but they get only the spending

satisfaction but no achievements.

It helps companies to focus on a CSR area that is closest to their

own business. For example, an IT company is more likely to be

effective in providing education and training than in promoting

clean farming. It would be fairly easy for such a company to

depute employees in CSR projects and also hire the skilled

people produced by its CSR programmes. Of course, an IT

company can also undertake CSR projects where IT expertise

can make a difference, such as local infrastructure and

healthcare.

Success in CSR Projects Needs Tenacity

After focus, the most important ingredient of successful CSR is

tenacity. CSR initiatives often run into the resistance from

vested interests and even the intended beneficiaries themselves.

CSR programmes have to be introduced and conducted with

great sensitivity and tact. Still, it takes great commitment and

tenacity to see CSR projects through.

Also, CSR programmes take a long time to show results, as they

rely heavily on people changing their minds and behaviour,

which is the hardest thing to achieve in the world. So, one

requires enormous patience to help others.

Cooperation of Local Government is Crucial.

One of the most critical factors in success of any CSR

programme is the cooperation of the local government. Given

the intrusive nature of CSR projects, it is vital that the projects

are aligned with government's own programmes and priorities.

At the same time, it is useful to win over the local social leaders

to ensure that CSR implementation goes smoothly.

Ensuring Effectiveness of CSR Spending

Spending on CSR is the easy part. Ensuring effectiveness of

spending is the key to successful CSR. It is important to bring

the business discipline to CSR. The outcomes have to be clearly

defined and the inputs have to be matched to those outcomes.

Control on outcomes requires constant monitoring and

adjustments and sticking to deadlines and budgets.

Companies must clearly understand the returns on their CSR

investments. Good PR is one of the easiest and quickest returns.

However, it takes time for the investment in CSR in the areas of

education, training, healthcare, environment etc to mature. For

example, school education projects would take a decade and

more to yield good, confident and capable people. Or,

healthcare CSR projects would deliver incremental

improvements in people's productivity and their contribution to

economic growth.

Monitoring and Evaluation of Projects Important

To ensure that CSR money is well spent and the intended returns

on investment are in line with expectations, it is crucial to

measure and monitor progress of CSR projects. Rigorous

recording of data, its frequent evaluation and acting on its

revelations is vital for effectiveness of all CSR programmes.

Some CSR projects are more data convenient than others. For

example, projects related to physical resources, such as

afforestation, green energy and water conservation, are easily

quantifiable. Measuring people projects can be comparatively

trickier but it is possible to quantify input-output correlation

with reasonable accuracy. Having milestones along the course

ensures that CSR projects do not lose their way.

Conclusion

Still, money and expertise will matter only if CSR is practised in

the right spirit. It is very important that companies see CSR as a

development obligation with economic benefits at the end of it

all. If companies see it as a form of taxation, they will do all they

can to avoid it by exploiting any loophole they can. For the sake

of removing pervasive socio-economic deficiencies of the

country, one hopes that the government and companies will act

as partners in CSR.

Still, the onus is more on companies to make CSR work, as

sustainability of an enterprises is not divorced from the

sustainability of its natural and social environment.

Globalization has blocked any escape routes that existed earlier.

As India sets out on the CSR route to development, one hopes

that Indian companies will integrate CSR into their risk

management and business growth strategies. If there is

anything like a 'win-win', CSR is.

*Rekha Sethi is Director General, All India Management Association.

QT- December 2013

14

Colin Coulson-Thomas*

Re-thinking Corporate Social Responsibility

Business leaders and opinion formers will shortly be assembling thin Bengaluru for the 8 International Conference on Corporate

Social Responsibility (CSR). The theme for the forthcoming

event is strategy to leverage CSR for competitive advantage,

and it will take place against the background of new Indian

company legislation and a mandatory requirement that will

apply to the companies of many of the attendees.

How will the Companies Act of 2013 impact upon the CSR

landscape in India and elsewhere? How will business leaders

respond? Are there lessons and implications for directors, policy

makers and influencers in other parts of the world? Will

corporate boards do just enough to satisfy the mandatory

requirement or will the new legislation lead to a fundamental re-

think of CSR strategy?

In addition to other requirements, the new legislation in India

requires companies with a net worth of more than Rs 500 crore

or a turnover of more than 1,000 crore to spend at least 2% of

annual net profit on CSR activities. Those who fail to do so will

have to give reasons why in their corporate Annual Reports.

What might the impact be?

Assessing the Impact of Mandatory Requirements

Those who introduce company legislation are invariably

motivated by the best of intentions, but Government

intervention and business regulation can sometimes be counter-

productive. A minimum or threshold could possibly become a

maximum as people avoid doing more than is required. In

India's case, will business leaders just focus on the effective use

of the 2% of net profit rather than think about how core corporate

capabilities could be best used for both business and social

benefit?

The intention of the new Act is that companies should preferably

spend the 2% on activities near or around areas in which they

operate. Such action can help to build relationships with local

communities, but should a socially responsible board of a

significant entity also consider how the totality of a company's

physical, financial and intellectual resources might have a

beneficial impact at national or international level?

One could argue that addressing certain social, educational and

health issues at local and national level is primarily the

responsibility of Government, and that individuals and

companies pay taxes to fund appropriate responses. When

public resources are constrained, local action by companies to

plug gaps might be welcomed, but is there a more strategic issue

to address for both business and political leaders?

Responsible Capitalism and the Role of Business

Would business leaders find it easier to attract talented members

of generation Z and would members of generation Y be more

engaged if corporate aspirations could be turned into causes that

would energise others? Might responsible boards that set out to

address social issues discover new business and development

opportunities?

In some countries there may be a case for re-thinking the

involvement of business in areas that have hitherto been the

preserve of the public sector. There are a range of possibilities

from public officials benefiting from the use of private sector

approaches, tools and techniques to privatisation and the

contracting out of further activities. Perhaps some bodies should

be commissioners rather than direct providers of services

Even with current roles and responsibilities could Government

bodies and businesses work together to transform public

services and provide more cost-effective and longer-term

solutions to challenges that confront many countries? Is there

scope for re-thinking the CSR strategies of both companies and

public bodies? Could mutually beneficial collaboration

Article

QT- December 2013

16

and this creates opportunities for businesses to apply their

capabilities and skills to service transformation.

In various countries while initiatives have been launched by

Ministers with attendant publicity, much of the implementation

has been broad brush and disruptive. Many approaches,

initiatives and programmes have been general, expensive and

time consuming. By the time they deliver, commissioning

organisations can face a very different set of challenges and

opportunities, and requirements may have changed.

erformance support can have a direct impact on work

group productivity by helping the people one already has to

excel.

Public and Private Service Culture and Values

Within areas of the public sector there are entrenched attitudes

and importance is attached to public service values. Various

initiatives have been introduced to reform or modernise

inherited structures, processes and practices, and build more

responsive organisational cultures. Bringing in fresh

approaches from the private sector can reduce the time needed

to bring about the required changes

Much discussion of corporate culture is from a top-down

perspective and assumes the existence of a single and relatively

homogenous culture. Yet certain activities can require distinct

attitudes and approaches, and a number of different cultures

may in place. Public sector bodies may also need to recruit,

engage with, and serve people from a wide range of cultural

backgrounds. Collaborating companies can introduce much

needed diversity as well as new ideas.

In some public service contexts efforts to change a culture may

be unnecessary and unjustified in view of the disruption this can

cause and the much greater benefits that could be obtained from

encouraging private companies to collaborate in the tackling of

social problems. When setting out to reduce bureaucracy and

encourage more entrepreneurial behaviours public service

leaders could benefit from private sector experience of cost-

On occasion the approaches used by companies to improve

performance do not create the photo opportunities associated

with some public initiatives, and yet a greater focus upon

helping people rather than changing the culture or structure

within which they work can have a quicker and more significant

impact on the relevance and quality of services. For example,

better p

between the two energize both sectors and benefit the public?

Importance of the Public Sector to Business

Public services impact directly upon businesses and their

customers and employees. Their quality is an issue for corporate

leaders in areas ranging from the education and health of

employees to transportation infrastructure, the availability of

utilities and the efficient management of the economy.

Public sector organisations in many countries face financial

constraints and/or increases in demand that are outstripping

available resources. Previous options such as extra funding,

bringing in expensive consultants, or recruiting additional and

high quality staff to meet the ambitions of policy makers might

not be affordable.

At the same time, users, tax payers and voters - and their elected

representatives - are often impatient for responses and results.

While still calling for improvements and new initiatives, they

may not be prepared to wait for multi-year transformation

programmes to deliver results, even if these were cost effective

and likely to succeed.

As expectations rise and new possibilities emerge, many public

sector leaders face the challenge of doing more with less. In my

report Transforming Public Services I give examples of how

public sector leaders can work with the people they have and

existing budgets to quickly build higher performance

organisations that can achieve multiple objectives and provide

clear benefits to various stakeholders. Perhaps by collaborating

with socially responsible companies they could achieve even

more.

The report identifies one approach 'performance support' which

aims to make it easier for people to excel at difficult jobs such as

those encountered by staff in demanding 'front line' roles in

public services. It does not necessarily require any fundamental

restructuring or a 'change of culture' and can be very cost-

effective. Corporate experience of practical ways of delivering

more with less could increase the impact achieved by available

funding in areas such as health and education.

Identifying Areas of Opportunity

In many countries public service managers have been

encouraged to become more concerned with the quality of

services, efficiency, effectiveness and value for money and to

learn from experience in the private sector. While some officials

may seek to protect their patch others respond to the challenge

QT- December 2013

17

effective ways of liberating and supporting people in the front

line and enabling responsible innovation.

Initiative Overload and Stress

A complicating factor in many areas of the public sector can be

the sheer number of different initiatives being implemented

whose time-scales may differ. Those who are already under

pressure may resist taking on responsibility for additional local

projects and give priority to top-down changes relating to new

Government policies.

Senior public sector management focus on high cost areas and

other priorities such as recent Departmental circulars and

Ministerial announcements can sometimes result in cost-

effective but lower budget initiatives, that could have significant

impact on core services and deliver multiple benefits, being

overlooked. Strategic collaboration may require Ministerial and

Secretarial support.

When projects

can last for one or more years senior people may have moved on

before results are achieved. Private sector collaboration might

result in initiatives that deliver results more quickly than has

been the case in the past. In Peterborough businesses and

professional firms collaborate with public bodies to build a more

sustainable city.

Many past initiatives

have been associated with working people harder, 'command

and control' and distrust. The focus has been upon top-down

initiatives to increase performance rather than the consequences

for the public and staff delivering public services.

Drawbacks of Prevailing Approaches

Opportunity costs can be high when people are distracted with

restructuring or re-organisation. The fact that so many public

initiatives have to be accompanied by costly internal

communications, engagement and management of change

programmes suggests their merits may not be immediately

apparent to those who are expected to adopt or implement them.

Effort devoted to motivating people suggest are incomplete.

The status quo is sometimes supported by vested interests and

there are those who stress the complexity of what needs to be

Public sector restructuring and policy changes can be so

frequent that many managers appear to spend more time on

managing change than delivering better services.

The Transforming Public Services report sets out a quicker and

less disruptive and stressful way of securing beneficial impacts

that is more likely to engage and be perceived as helpful by work

groups in direct contact with the public.

done and/or the fact that very few people may comprehend

difficult areas. However, what if there were a simpler approach

and it were possible to get many more and average people to

understand? Socially responsible businesses and public bodies

should be setting out to reduce stress.

Business leaders understand the importance of helping those in

the front-line to better serve customers. Learning and

performance support can make it easier for people to undertake

key and stressful front-line jobs. Its implementation involves

working with people to identify and address sources of anxiety

and pressure.

Leading, Managing and Helping

Should we change the emphasis from managing, motivating

and leading people to helping them? Perhaps there should be

more emphasis upon following the changing requirements and

aspirations of citizens, customers and users and making it easier

for them to secure the assistance they need to achieve their

objectives.

Socially Responsible Support Tools

Tools of various types are a widespread form of help and/or

support. Evidence of the use of tools can often be found at pre-

historic settlements and resort to them is not solely the

prerogative of our species. Some tools are relatively simple,

while others may be quite complex. Their very existence and

use can help to raise both ambitions and achievements, for

example from wooden hut to medieval cathedral.

Craft workers generally assume the tools of their trade will be

Increasingly private businesses, like some areas of

Government, help people to help themselves.

Persistent problems have been approached from a senior

management rather than front-line perspective, for example

driving change through an organisation rather than helping

people to cope. With more of an emphasis upon providing

support much of the effort that has been devoted to

transformation and change management might have been

unnecessary.

Attempting to drive a policy through an organisation, rather

than helping people to achieve the outcomes it is seeking to

bring about can be a mistaken policy. People need to be helped

to be responsible and excel. Strengthening the roles of

managers and weakening front-line roles and professionalism

can reduce a body's ability to innovate, cope with multiple

challenges and deliver better public services.

QT- December 2013

18

IICA Green Building, Manesar

Building Landmarks. Creating Milestones

NBCC

Company's financial performance in the year 2012-

13 has been impressive as compared to previous

year,with improvement in Profit Before Tax from

Rs.289.83 crore to Rs.301.64 crore and Profit After

Tax from Rs.190.17 crore to Rs.207.50 crore

Contributing towards the environment is a matter of pride and NBCC boasts of being an eco-friendly organization. NBCC's all new projects are conceived / conceptualized in line with Bureau of Energy Efficiency (BEE) norms as well as GRIHA norms.

It has executed LEED certified first Green Building project with captive solar power, solar heating and energy saving system. This iconic Green Building for the Ministry of Corporate Affairs at Manesar, Haryana, was inaugurated by the Hon'ble Prime Minister of India on 13th April, 2012.Indian Green Building Council of the Confederation of Indian Industry has awarded the prestigious LEED India Gold Rating to this building.

Besides, NBCC has also completed Central Services Officers Institute at New Delhi, a GRIHA 3-Star Building.

The following Green Buildings are under execution by NBCC:

• MNRE Office Building at Gurgaon (Haryana), a 5-Star Green Building

• Income Tax Building at NOIDA (NCR)

• Coal India Building in Kolkata

In July 2012, NBCC has also entered into MoU with The Energy and Resources Institute (TERI) for implementing projects of NBCC with GREEN compliance. TERI shall provide advice and consultancy to NBCC for undertaking future construction work as per Green Building and sustainable building concepts.

TOWARDS GREEN

NBCC Centre, Okhla (Delhi)- A Commercial Real Estate Project

Cooling Tower & Chimney, Simhadri STPP (AP)

stablished as a Government of India Enterprise in the

year 1960, National Buildings Construction Corporation ELtd. (NBCC), under the Ministry of Urban Development,

Govt. of India, has been executing many a landmark projects in

diversified areas both at home & overseas. Presently, its

operations can be categorized into three main segments i.e.

(i) Project Management Consultancy (PMC), (ii) Real Estate

Development and (iii) EPC Contract. The company intends to

continue to focus on performance & quality execution in order to

gain maximum customers satisfaction in all the segment of its

operations.

NBCC is a certified ISO 9001:2008 company in respect of

Project Management & Consultancy Services. The Corporation

has land reserves of approximately145.25 Acres. As on ,

NBCC's Order Book stands at Rs.15000 Crore.

NBCC, a schedule 'A' CPSU, is presently operating in

diversified areas that include sectors such as Real Estate-both

Residential & Commercial, Power, Environment, Health Care,

Institutions, Roads, Border Fencing, Mass Housing,

Office Complexes etc.

The Corporation has also earned a niche for itself recently, by

constructing a Green Building named Indian Institute of

Corporate Affairs (IICA), Manesar in the State of Haryana.

date

A Mini RatnaSchedule ‘A’ PSE

NBCC Bhawan, Lodhi Road, New Delhi-110 003,Visit us : www.nbccindia.gov.in

NATIONAL BUILDINGS CONSTRUCTION CORPORATION LIMITED(A Government of India Enterprise)

(For Consultancy & Project Management Division)

An IS/ISO 9001:2008Company

available before accepting a commission to undertake an

assignment. Basic building tools have survived the test of time.

In other fields tools have rapidly evolved. The surgeon's knife

might today be wielded by a “robotic” machine. Socially

responsible leaders ensure people are equipped with the tools

they need to avoid stress and excel.

Knowledge workers also use tools, approaches and

methodologies to help them in their work and these too have

changed and evolved over the years. Many professionals would

not undertake assignments without the appropriate tools for

handling those aspects that might be difficult to undertake

without them. Similarly, knowing when to seek help and

support, and from whom or where it might be forthcoming, is

taken as the mark of an experienced and informed practitioner.

Providing Performance Tools

League tables suggest significant variations in performance.

The author's investigations suggest a relatively small proportion

of people excel at most of the activities examined, while there is

a long tail of barely adequate performance. Leaders are expected

to exhort and inspire others, but however much people are

motivated they may under-perform if they lack proper tools.

Rhetoric, monetary rewards and other incentives may not

compensate for a lack of practical assistance to help people to do

what is required. What is often missing are the 'tools of the job', a

cost-effective way of capturing and sharing critical success

factors and what high performers do differently. Performance

support does this and makes relevant help available in an easily

accessible form as and when it is required.

Simple WHO checklists covering surgical procedures can

significantly reduce complications and inpatient deaths.

Support that captures the essence of what high performers do in

certain situations can be very effective. When large numbers of

people doing complex tasks in a variety of locations have to be

simultaneously helped technology enabled solutions can be

very cost-effective. This is where CSR initiatives and

collaboration can have national and global impact.

CSR and Performance Support

A CSR initiative could focus upon helping people to confront

difficult issues or undertake stressful jobs that have a significant

impact upon the public and the achievement of policy

objectives. Delivery mechanisms need to be appropriate for the

situation, whether personal intervention, a simple checklist or

more sophisticated tool.

Performance support enables doctors to help patients increase

their understanding of their own health and devise options for

improving it and adopting a healthier lifestyle. Healthcare and

environmental issues and options can be explained. Tools could

also help patients to make more and better decisions about their

own lifestyle and care.

Pathway support can help a citizen to understand whom to

contact and at what points in a public service process. It should

provide the local information required and could include

diagnostics to help users to better understand relevant needs,

issues and options. Ideally, relevant elements of what has been

captured should be made available to those later in the process,

for example to enable 'joined up' responses.

Interactive support tools can guide people through complex

processes involving a number of organisations. They can make

it easier for doctors and patients by only providing information

that is relevant to the stage they are at within an end-to-end

process from initial assessment, through diagnosis to effective

treatment and after care. At each step suggested options may be

presented according to what has been captured about a patient's

situation and condition.

Supporting Self Care

To illustrate how a company can help people to help themselves

in an arena related to its core business, let us consider the case of

patients with long-term conditions. If the ability of these people

to self-care into older age could be increased it would benefit

them and reduce pressure upon healthcare resources. Assisted

by Dermal Laboratories a three month feasibility study

examined how performance support could help.

The study team selected Psoriasis and set about creating a

support environment for people with this condition

(approximately 2-3% of the UK population). With the help of

Julie Van Onselen, a specialist dermatology nurse, a toolkit was

designed by Cotoco, a company specialising in performance

support tools, to take users on a journey that starts with

improving understanding of their condition, through practical

day to day management of it, and culminates in a personalised

action plan.

Impact assessment was carried out by Bournemouth University.

Although many of the users were not as computer literate as

adopters in other fields, and already had some appreciation of

their condition, the University's final report states that they

QT- December 2013

20

found a significant increase in the index used to measure ability

to self care among toolkit users. About a half of the group

reported that the information, greater understanding and support

it provided had made a difference to how they manage their

condition.

Results of Initiatives

The acid test of change or transformation initiatives is whether

citizens, clients and customers can see or feel the difference.

Socially responsible use of performance support impacts

directly upon the behaviours of 'front line' work groups and its

implementation can be largely independent of cultures, values

and motivations.

People embrace the support provided because it makes it easier

for them to do difficult and stressful jobs, while 'blockers' can

prevent outputs that breach policies, guidelines and required

standards. Applications can increase understanding, boost

performance, reduce costs, speed up responses, alleviate stress

and ensure compliance. Services like healthcare, which impact

upon all our lives, can be transformed. People can be helped to

take more informed and responsible decisions.

A key message for CSR teams looking to achieve a more

strategic impact is that public and other services can be

transformed. Performance support is a proven, quick, focused

and cost-effective alternative to general, time consuming and

disruptive initiatives and expensive transformation

programmes. Capturing and sharing critical success factors for

key activities, and what high performers do differently, can

enable 24/7 support to be provided to citizens and average

performers wherever they may be.

Evolution or Change of CSR Direction

A succession of top-down initiatives have put public sector

employees under pressure without achieving the productivity

and other improvements needed to address the challenges facing

many areas of the public sector. Is a re-think necessary and are

their opportunities for socially responsible companies to

become more involved in the transformation of public services?

Huge returns on investment have been quickly obtained by early

adopters of performance support in the private sector. Could it

form the basis of CSR initiatives in collaboration with public

bodies that could deliver multiple benefits? Should existing

programmes be questioned and reviewed, and an alternative and

complementary route to creating a high performance

organisation explored?

Many organisations are failing to reap the benefits of providing

better support to those who are best placed to deliver a range of

policy objectives. Again, socially responsible leaders should

consider how they could help people to excel at difficult jobs,

for example by ensuring they understand complex areas, have

appropriate tools, and are enabled to emulate the approaches of

high performers in the areas concerned.

Conclusions

CSR has moved on from well meaning philanthropy and

cosmetic initiatives designed to generate images and copy for

an annual report. The IOD's international conference in

Bengaluru provides an opportunity for its future direction to be

discussed. Have business leaders viewed their own focus and

style through a social responsibility lens?

Are directors putting enough emphasis upon providing people

doing difficult and stressful jobs with better support and helping

customers and the public to help themselves? Is there scope for

more collaboration with other organizations?

Could CSR and other initiatives help to transform public

services and have a global impact? How does one monetise a

CSR profile? Using core capabilities to address pressing issues

can enable CSR to become a key element of business strategy

and further corporate goals and both social and organizational

objectives.

CSR projects can enable responsible and sustainable decision

making. They can be used as a development opportunity for the

staff involved. They can lead to product and brand extension

and new arenas for collaboration, utilizing know-how and the

licensing of technology. CSR can produce tangible, measurable

and significant benefits. It can build mutually rewarding

relationships with key stakeholder groups and deliver returns on

investment that match or exceed those achieved in other areas.

*Prof. Colin Coulson-Thomas, author of Transforming Public Services, is an experienced member of private and public sector boards, a member of the business school team at the University of Greenwich and an Adjunct visiting professor at Manipal University. Currently he is Director General of Institute of Directors, India for UK & Europe Operations

QT- December 2013

21

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THE COMPANIES ACT, 2013

————

ARRANGEMENT OF CLAUSES

————

CHAPTER I

PRELIMINARY

CLAUSES *

149.(3) Every listed public company shall have at least one-third of the total number

of directors as independent directors and the Central Government may prescribe the

minimum number of independent directors in case of any class or classes of public

companies.

150. (1) Subject to the provisions contained in sub-section (5) of section 149, an

independent director may be selected from a data bank containing names, addresses

and qualifications of persons who are eligible and willin

g to act as independent

directors, maintained by any body, institu

te or association, as may by notified by the

Central Government, having expertise in creation and maintenance of such data bank

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Why do Directors and Boards Join IOD

Discover the reasons

J Sundharesan*

Article written by j sundharesan, compliance guru & principal

faculty at Institute of Directors for Quality TimesThe word

'Board Process' has been mentioned in several places in the

Companies Act 2013 ('The Act”), but itis important to identify

and discussthis termin two sections, which is in section 149 that

deals with immunizationfor independent directors and section

2(60) that defines an officer in default, both these provisions are

of concern for directors. These provisions emphasize the need

for everydirector to ensurean effective Board Process that will

protect his interest.

The first provision is clause (vi) of sub- section (60) to section 2

of theAct which states “every director, in respect of a

contravention of any of the provisionsof this Act, who is aware

of such contravention by virtue of the receipt by him ofany

proceedings of the Board or participation in such proceedings

withoutobjecting to the same, or where such contravention had

taken place with his consent or connivance” will be “officer who

is in default”.

The other provision is sub- section (12) of section 149 of the Act

which states “an independent director, a non-executive director

not being promoter or key managerial personnel,shall be held

liable, only in respect of such acts of omission or commission by

a companywhich had occurred with his knowledge, attributable

through Board processes, and with hisconsent or connivance or

where he had not acted diligently.”

The term “Board Process” assumes importance based on these

two provisionswhich every director or prospective director is

required to understand, that aBoard Process in simple terms is a

process of calling, convening and conducting avalid board

meeting.The Act clearly provides for the requirements for

holding the Board Meeting and includes:

I) A minimum number of four Board meetings are to be

held every year.

ii) Not more than 120 days shall intervene between two

consecutive meetings of the Board

iii) Every company shall observe secretarial standards

with respect to general and board meetings that are

specified by Institute of Company Secretaries of India.

The term “Called for & duly Convened'” is used

to denote the way the Board meeting is required to

be intimated to the Directors.

Notice & Time frame to call for meeting

Notice is an announcement containing information about an

event, such notice can be written or oral. A board meeting shall

be called by giving not less than 7 days notice in writing to every

director.

When & Where

The notice should specify the day, date, time and venue of the

meeting and shall be sent by hand delivery or by post or by

electronic means. Further, the notice of the meeting shall inform

the directors regarding the option available to them to

participate through video conferencing mode or other audio

visual means, and shall provide all the necessary information to

enable the directors to participate through video conferencing

mode or other audio visual means.

Article

Corporate Governance-

Best Board Practices

QT- December 2013

23

Notice for Adjourned meeting

Notice need not be given of an adjourned meeting other than a

meeting that has been adjourned “sine die”. However as per

Secretarial Standards notice of the reconvened adjourned

meeting should be given to those directors who did not attend

the meeting, which had been adjourned.

Meetings at shorter notice

The Board meeting may be called at shorter notice to transact

urgent business subject to the condition that at least one

independent director, if any, shall be present at the meeting. In

case of absence of independent director from the Board

Meeting, business transacted or decision taken at such meeting

shall be circulated to all the directors and shall be final only on

ratification thereof by at least one independent director, if any.

Agenda

Agenda means items that are to be considered in the Board

Meeting and it is also referred as 'Board Pack'.Even though the

Act does not mandate a company to give a detailed agenda of the

board meeting to the directors, the Secretarial Standards provide

for the same. As a good board practice the agenda, setting out the

business to be transacted at the meeting and notes to the

agendais required to be given.

Authority to call

Unless the Articles provide otherwise, any director of a

company may and the manager or secretary on the requisition of

a director should, at any time, summon a meeting of the board.

The term 'properly constituted' means the

minimum requisites for ensuring that the board

meeting takes place.

Quorum for the meeting

Quorum is the minimum number of members required to

convene a meeting. Section 174 of the Act states that the quorum

of the meeting shall be one- third of its total strength or two

directors, whichever is higher. It is pertinent to note that

participation of director by way of video conferencing or by

other audio visual means shall also be counted for the purpose of

quorum, unless he is to be excluded for any item/s of business

under any provisions of the Act or Rules. If the quorum during

the meeting is reduced below the limit, the continuing directors

may act for the purpose of increasing the number of directors

fixed for the quorum. Where the meeting cannot be held for

want of quorum, the meeting will automatically stand

adjourned to the same day at the same time and place in the next

week or if that day is a national holiday, till the next succeeding

day, which is not a national holiday, at the same time and place.

Chairman of the meeting:

The Chairman is the person who is instrumental for the conduct

of the meetings, without whom a a company cannot convene

and conduct a meeting. Directors present in the meeting shall

appoint one among them as the Chairman of the meeting. A

director intending to participate through video conferencing

mode or other audio visual means shall communicate his

intention in writing to the Chairman and/or the company

secretary of the company and shall also furnish details of how he

wishes to avail the connectivity. The director participating

through video conferencing mode or other audio visual means

shall send the confirmation at least three days prior to the

scheduled date of the meeting unless waived-off by the

Chairperson. In the absence of any such intimation from the

director, it shall be assumed that the director will attend the

meeting in person.

As the Chairman occupies the place of authority or control, he is

entitled to certain powersduring a meetingwhich include –

1. To ensure that meetings are run efficiently and to

maintain decorum

2. To ensure that the proceedings are properly conducted in

accordance with the provisions of the Act and the

company's articles

3. To ensure that the sense of the meeting is properly and

accurately ascertained

4. In the event of a dispute, the Chairman has the power to

adjourn a meeting to facilitate its business.

The term 'validly transacted' would mean that a

meeting is called for, convened and all the

requisites to proceed with the conduct of the

QT- December 2013

24

board meeting are in place to transact the items of

business in the meeting.

Commencement of meeting

As per clause 22 of Table H of the Actif the chairman is not

present within 5 minutes after the time appointed for holding the

meeting, the directors may appoint a director among themselves

to chair their meetings.

Leave of Absence

Leave of absence should be granted to a director only when a

request for such leave has been communicated to the Secretary

or to the Board or to the Chairman. If a director fails to seek leave

of absence he shall be deemed to be absent. In case a director is

absent himself from all the meetings of the Board of Directors

held during a period of twelve months with or without seeking

leave of absence of the Board then he shall vacate his office as a

director. It has also been made mandatory that every director of a

company shall attend at least one board meeting in a financial

year in person.

Participation in proceedings

In line with the provisions of section 2(60)(vi) every director has

a right to speak at the meeting and raise objections if he finds any

item is in contravention to any provisions of law. He also has a

right to object any content in the minutes if it is different than

what was discussed in the meeting or where he has dissented and

it was not recorded. For easy understanding the meaning of

some of the terms used in this Act are:

i) Consent refers to the provision of approval or agreement,

particularly and especially after thoughtful

consideration.

ii) Connivance refers to willingness to allow or be secretly

involved in an immoral or illegal act.

iii) Dissent refers to the holding or expression of opinions at

variance with those commonly or officially held.

iv) Omission refers to someone or something that has been

left out or excluded.

v) Commission refers to a process or service provided to

validate the completeness and accuracy of a document.

vi) Acting diligently would mean if he is not an expert he can

engage the services of an outside agency to help him

identify the risks attributable to that particular item.

Proceedings of the Meeting – Board Minutes

The video recording of the meeting shall form part of the

secretarial records and be preserved by the company. The

minutes of the board meeting shall contain a fair and correct

summary of the proceedings theat. The Chairman shall exercise

absolute discretion in regard to the inclusion or non-inclusion of

any matter in the minutes. The Board minutes shall contain the

names of directors present and in the case of each resolution

passed at the meeting the names of the directors, if any,

dissenting from, or not concurring with the resolution.

The draft minutes of the meeting shall be circulated to all the

directors within seven days of the meeting either in writing or in

electronic mode. Further every director who attended the

meeting, whether personally or through video conferencing or

other audio visual means, shall confirm or give his comments,

about the accuracy of recording of the proceedings of that

particular meeting in the draft minutes, within seven days after

receipt of the draft minutes failing which his approval shall be

presumed. After receiving comments the Chairman shall

proceed to sign the minutes and take the minutes on record in the

next Board Meeting.

These provisions relating to a Board Process are important

requisites for a valid meeting of the Board of Directors. It is

pertinent to note that the Board Minutes signed by the Chairman

of the meeting is full and final evidence for any actions that may

be initiated against a director invoking the provisions of section

2(60) and 149(12) or any other provisions of the Act in any court

of law.

To sum up, best board practices can be made better by ensuring a

good board process.

J Sundharesan, Founder & Chief Advisor J Sundharesan & Associates Company Secretaries

QT- December 2013

25

Organization for Non Executive Independent Directors (ONEID) INSTITUTE OF DIRECTORS: M-52 (Market), Greater Kailash Part-II New Delhi – 110048, India,

Board Nos. : +91-11- 41636294 , 41636717, 41008704 • Fax: +91-11- 41008705 • Email: oneid@iodonline.com

Organization of Non-Executive Independent Directors (ONEID) is a wing of Institute of Directors (IOD)

to promote and maintain a panel of suitable qualified Independent Directors for Corporate Boards.

Choose the right person for your

BOARD

leading to Certified Corporate DirectorshipA condensed program for

Company Directors

Masterclass for Directors TM

Certified Director

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Are you a as per the New Companies Act 2013

TO BE INTRODUCED IN PARLIAMENT

Bill No. 121 of 2011

THE COMPANIES BILL, 2011

————

ARRANGEMENT OF CLAUSES

————

CHAPTER I

PRELIMINARY

CLAUSES *149.(3) Every liste

d public company shall have at least one-third of the

total number of directors as independent directors and the Central

Government may prescribe the minimum number of independent

directors in case of any class or classes of public companies.

150. (1) Subject to the provisions contained in sub-section (5) of

section 149, an independent director may be selected from a data bank

containing names, addresses and qualifications of persons who are

eligible and willing to act as independent directors, maintained by any

body, institute or association, as may by notified by the Central

Government, having expertise in creation and maintenance of such

data bank and put on their website for the use by the company making

the appointment of such directors

**********

**********

**********

**

* Only relevant parts have been highlighted. Pl view details on www.iodonline.com or http://www.mca.gov.in/

Why do Directors and

Boards Join IODDiscover the reasons

Whether I am knowledgeable

enough to understand the financial, legal, technical aspects of business of the proposed company?

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www.iodonline.com

Sanjeev Minocha*

The business case for sustainability is now well understood. In

almost every market companies are emerging as leaders in

sustainability practice. The traditions, triggers, manner and

urgency with which companies have set on a path to better

sustainability have varied. But in almost all cases success has

meant a concerted effort to embrace sustainability as a core

value in the company's conduct of business.

In most cases, companies are evolving their path, learning and

building on successes. From traditionally independent CSR

silos, they have sought to mainstream their approach to

sustainability, whether in policymaking, strategy, execution,

research and innovation, and even performance assessments of

managers and staff. Companies now systematically measure

and report sustainability performance, including along globally

accepted standards such as the GRI.

In all of this, company boards have often deliberated key issues

and conflicting priorities in every dimension of sustainability -

economic, environmental or social. They have weighed new

approaches that offer a better understanding of value creation

and managing long-term risks.

Economic Sustainability

The right pricing strategies as a means to realizing sustained

economic value is gaining increasing attention worldwide.

Boards have routinely favored aligning their businesses to

pricing strategies aimed at building long-term market presence

and sustained customer loyalty. Companies in industries such as

pharmaceuticals have at times found their pricing power

challenged by governments and civil society. There is increasing

pressure on companies to price their products and services fairly

and be seen to be doing so.

On the other hand, there are also examples of how under-pricing

bids to secure large public contracts, whether in deliberate

strategy or from inadequate planning, have only led to business

disruption and substantial risk down the road, hurting interests

of all stakeholders.

Another emerging trend is of innovative pricing and business

models that have strategically sought a wider connect to society.

Success in flexible pricing strategies by those such as the

Aravind Eye Care System are catching increasing attention of

policymakers, development agencies and business schools

globally. Open internet-based business models now provide

basic services free to users building a wide addressable market.

More recently, leading US universities like Stanford and MIT

and new platforms like Coursera are experimenting free open-

access online education, popularly called MOOCs. The ideas of

shared economic value and novel pricing strategies as means to

engaging society are very much on the table.

From another perspective, fair pricing can also mean a

willingness to adjust pricing responsibly to significant shifts in

market conditions and relative impact on stakeholders. A telling

example (in the following box) comes from the decisions of the

board of an oil and gas company at the time of unanticipated

price movements and subsequent financial crisis in 2008.

The above example also leads into a second important theme

emerging in the area of economic sustainability and risk

management, that of companies widening focus to track

economic value generated by their activities along the entire

value chain - i.e. also to supply chains; revenues accruing to

governments; and where relevant, even estimated value/savings

to customers. This is helping align operating strategies to secure

sustained relationships along the entire value chain. This is

often coupled with public disclosure that aims at providing

transparency and balancing stakeholder perceptions about

economic value and benefits generated from the company's

operations.

Article

Sustainability in Practice

QT- December 2013

27

Playing fair – Keeping an eye on stakeholder interests

The Company, a listed oil and gas independent, operates a

single large oilfield production contract overseas. Its

production sharing contract was structured with royalty

payments, and a profit share determined after standard cost

recovery provision, payable to the host government.

By early 2008, with oil prices increasing to unprecedented highs

of over $120/barrel, contract terms had skewed sharply against

the government, prompting severe pressure from them for a one-

sided renegotiation of contract terms. The company's board

considered options of seeking legal protection or lobbying

intervention by their own government, but settled down to the

view that the government's request was only fair, and chose

instead to negotiate revised terms that aligned better to oil price

changes. In part, this also aimed at strengthening their long-

term business relationship with the host government.

The dividends came back early. By December 2008, oil prices

had crashed 70% from a high of $140/barrel in summer that

year to below $40/barrel. At these prices, continuing viability of

the company's heavy oil operations was severely threatened.

Relative contract terms had became almost irrelevant with little

profit to share. The company's board reacted swiftly to adjust to

the new reality, seeking to suspend new capital expenditure,

previously committed under their contract, to conserve cash

until oil prices had recovered. Host government officials were

quick to respond. The government was equally willing to oblige,

equipped as they were with adequate grounds to justify a major,

well-reasoned, and even-open ended, concession.

In contrast to many peers in other jurisdictions, the decisions

and actions of this Board had ensured minimum possible

disruption to its only business through the sharp downturn

during the 2008 financial markets crisis.

Environmental Sustainability

Companies can be seen at varying stages in their effort to

meaningfully address environmental sustainability. At the first

level companies are moving away from a mere compliance-

based approach to making direct environmental impact

assessment of their operations and installing mitigating

measures.

At the second level, companies seem to have progressed to

studying their complete environmental footprint, including

supply chains and end-use, and including use of energy,

material and water resources, and in many cases their carbon

footprint. While direct cost-benefit analyses of potential

improvements remain popular practice, decision-making is also

stretching to criteria like net-resource neutral and reducing

carbon footprint.

At the third level are companies who have started realizing

benefits from mainstreaming environmental considerations in

their organization's conduct of business. Proactive, bottom-up

innovation on this dimension serves as a visible marker that

environmental sustainability has set root in such companies.

Another marker is the presence of environmental covenants in

their supply chain contracts. At this level are also companies

whose business models revolve around new green products and

processes.

Implementing an environmental agenda has typically meant

assessing footprint and operational impacts; developing

environmental actions plans, including adequate measures for

occupational health and safety and emergency response;

building internal capacity; and launching environment

management systems that set in place accountabilities,

documented policies, goals and processes, monitoring and

reporting protocols, and grievance mechanisms.

Company experiences suggest that significant upfront effort

may be involved. Best practice has been to prioritize and

sequence implementation, often relying on outside specialists

for impact assessment, drawing up action plans and effective

road maps to implementation.

With policies and initial teams in place and action plans set in

motion, many companies have started early in working towards

international environmental standards certification as a means

to streamline and strengthen internal capacity and processes.

Benefits are two-fold. First, they provide a ready target

framework to benchmark their environmental management.

Second, they offer the reward of international certification and

stamp of approval to the company's intent and that it has sound

environmental systems in place.

Main streaming the environmental agenda throughout the

organization is hardly ever automatic. Companies have had to

provide significant training and sensitization and sustain that

over time. Stewardship by top management is seen to be critical,

as is embedding environmental staff with line managers

responsible for operations. Companies have also found it

essential to ensure wide awareness of environmental policies

QT- December 2013

28

and agenda among staff, partners and suppliers. Best practice

now also includes integrating the aspect of environment

sustainability in staff performance review and reward systems.

Social Sustainability

In an era of fast changing social expectations, managing the

company's interface with communities and society is gaining

significance. Globally, increasing pressure on policymakers,

capital providers, and local administration is moving the social

agenda for companies from philanthropy to community

engagement to active community consultation, disclosure and

measurable benefits to society. As an important driver to

realizing superior business performance and mitigating risk, the

rewards for companies actively embracing the path to social

sustainability - sharing benefits and striking productive,

mutually-sustaining relationships with society - can be

significant.

Setting sound social policies is becoming important.

Companies are moving away from ad-hoc contributions and

programs to more strategic and focused social engagement. This

has required, first, a good understanding of the business's social

footprint and direct impacts, societal and developmental issues

important to local communities, key baseline social data, and the

local administrative and social ecosystem that serves these

communities. Recognizing critical social issues surrounding

business supply chains has been equally relevant.

Prioritizing social engagement is important. The first priority

was always to address and mitigate direct social impacts. This is

particularly critical, for example, in projects involving

economic displacement, involuntary resettlement or natural

resources. Carefully designed community consultation and

disclosure help plan the right interventions and establish

adequate community support.

Companies have next prioritized benefits to local communities

and wider society. Promoting local supply chains and sourcing

services locally, when feasible, is common practice. Building

and sharing infrastructure with local communities is another.

For social programs, companies have sought to align those to

their core competence or strategic priorities wherever possible.

Apollo Hospitals and Max Foundation run excellent programs

that promote preventive health, widen access to care or help

meet costs for the disadvantaged. Companies like ITC and

Hindustan Unilever have strategically engaged in supporting

rural communities. Many other companies have chosen to focus

on select sectors, communities or around select themes.

Several important issues come up as companies evolve their

agenda on social engagement. First, best practice has favored

investing in long-term capacity building as a means to uplift

communities versus paying for current consumption. The

benefits are obvious. The only meaningful exceptions are in

providing immediate relief to the disadvantaged or in events

involving mass disruption such as during natural calamities.

Second, companies are also involving local communities and

civil society, and sometimes local administration, for select

programs. The advantages are of leveraging external support in

implementation and building shared objectives and ownership

of these programs. In some sensitive or large projects this also

serves to diffuse reputational risk.

Managing expectations has been another important

consideration in decisions on social policy. Companies are wary

of making commitments they may not meet, or to projects with

uncertain needs that could snowball well beyond their budgets,

or where they risk being seen as singularly responsible for

meeting the needs of a particular community. Best practice

suggests that clearly articulated, well-defined social policies

and activities, adequately disclosed to public, are perhaps the

best mitigating factors in managing community expectations.

Finally, a clear communication strategy aimed at getting the

story out, and to proactively engage and address community

concerns is a critical part of realizing the full benefits of social

engagement, managing expectations and addressing social and

reputational risk.

Monitoring, measuring, and publicly disclosing progress on

sustainability is helping companies establish their role as

corporate citizen, accountable and transparent in their actions.

They provide the perfect opportunity to set the public record on

the positive economic, environmental and social contributions

companies are making to society. Companies are increasingly

reporting sustainability performance along internationally-

accepted standards such as of the Global Reporting Initiative

(GRI). This is seen as an achievement and a matter of pride by

companies worldwide.

Sanjeev Minocha. Former development banker, International Finance Corporation, Washington DC.

QT- December 2013

29

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Golden Peacock Awards SecretariatInstitute of DirectorsM-52 (Market), Greater Kailash Part - II, New Delhi-110048, IndiaTel: 011 - 41636717, 41636294, 41008704 • Fax: 41008705

Email: info@goldenpeacockawards.com • www.goldenpeacockawards.com

IODInstitute of Directors

Tomorrow’s

Boards

Instituted by

Building

Golden Peacock AwardsA Strategic tool to Lead the Competition

®

IOD strongly believes that competition

brings out the best in all.

Golden Peacock Awards set by it two

decades back have achieved

much affection, admiration and adulation

from business and industry.

Golden Peacock Awards have become

the most sought after badge

of excellence

“ 2% spend would be

mandatory for

companies with a

net worth of more

than Rs 500 crore

or a turnover of

more than 1,000

crore or a net profit

of more than Rs 5 crore

The amount has to

be spent around the

areas of operation of

the company.

”Hon’ble Dr. M. Veerappa MoilyUnion Minister of Petroleum and Natural Gas, Govt. of India

addressing the Golden Peacock Awards Nite in Bengaluru.

Mrs. Rajashree Birla receiving Golden Peacock Lifetime Achievement Award

Hon'ble P. Chidambaram, Union Finance Minister of Indiaaddressing the Golden Peacock Awards Nite in New Delhi

Azim H. Premji, Chairman, Wipro Limited receiving the Golden Peacock Leadership Award

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Awards will be presented during the 8th International Conference on Social Responsibility on 17-18 January 2014, at Hotel ITC Windsor Manor, Bengaluru (India)

Golden Peacock Awards, instituted by Institute of Directors in 1991, are now

regarded as benchmark of Corporate Excellence worldwide.

Today Golden Peacock Awards Secretariat receives over 1,000 entries per year

for various awards, from over 25 countries worldwide. The Golden Peacock

Awards have been instituted to celebrate and honour the best of best, as

recognition of their unique achievements to build a brand.

The selection is an elaborate process done by a team of professional independent

assessors. The short-listed finalist applicants are then submitted to a Jury of

eminent people , known for their independence and impartiality headed by Dr Ola

Ullsten, former Prime Minister of Sweden and Justice P. N. Bhagwati former

Chief Justice of India,

GOLDEN PEACOCK AWARD(both National & Global) for

CORPORATESOCIAL RESPONSIBILITY

&

GOLDEN PEACOCK AWARD FOR

INNOVATION MANAGEMENT LAST DATE for Submission of Application

5th December 2013

Pradeep Chaturvedi*

Introduction

The tenet of corporate social responsibility occupies a long and

varied history, taking recognizable shape around the turn of the

20th century. Although first acknowledged in 1916 by J.

Maurice Clark, in an article appearing in the Journal of Political

Economy; corporate social responsibility as a function of firm's

self-interest has its formal roots in the 1932 edition of The

Modern Corporation and Private Property by Adolph A. Berle

and Gardiner C. Means.

The idea of social responsibility is not new. It has been around

for as long as businesses have existed in the shape of caring

owners who provided housing, paid workers' time-off for

sickness and holidays and otherwise attempted to ease their

employees' lot – and it remains as important cornerstone of the

social democratic tradition in Europe. Although many such

voluntary social measures have become legal requirements, a

number of business leaders have continued to go further, using

their wealth to improve society. This philanthropy has been

exhibited most strongly to the US and most prominently through

the likes of Carnegie.

Philanthropy is where CSR began and it remains an important

current input. But though the two get confused – especially in

the US – social responsibility is a much broader concept. A lot

of thinking on CSR in the US is still heavily anchored in

philanthropy.

Among the more progressive companies, a shift is already

occurring from traditional philanthropy to community

involvement: seconding managers to voluntary organizations,

encouraging staff volunteerism, supporting local schools etc.

Clear distinctions in approach towards CSR are seen in US and

Europe. In US the focus under CSR is mainly on serving the

society, but in Europe the focus is on serving own employees

also, besides the society.

The fundamentals of CSR rest on the fact that not only public

policy but also corporate actions should be responsible enough

to address social issues. Thus companies should deal with the

challenges and issues looked after to a certain extent by the state.

The evolution of corporate social responsibility in India refers

to changes over time of the cultural norms of corporations'

engagement with corporate social responsibility (CSR), with

CSR referring to way that businesses are managed to bring

about an overall positive impact on the communities, cultures,

societies and environments in which they operate.

India has one of the richest traditions of CSR. Serious efforts

have been made in recent years to create awareness of social

responsibility as an important segment of their business activity.

The CSR approach of corporate has to be in line with their

attitudes towards mainstream business-companies setting clear

objectives, undertaking potential investments, measuring and

reporting performance publicly.

What is Corporate Social Responsibility?

There is no single, universally accepted definition of corporate

social responsibility (also known as business social

responsibility, corporate citizenship). For the World Business

Council for Sustainable Development, CSR is: “The

commitment of business to contribute to sustainable economic

development, working with their employees, their families, the

local community and society at large to improve their quality of

life.” CSR is basically about managing companies' impacts on

society to maximize the positive and minimize the negative.

The need for CSR has its root in the fundamental thought –

“what and how much has been given back over and above what

you have taken from the society”. This is said as thus for the

simple reason that the company/corporate has its own identity

Article

New Directions of Corporate Social Responsibility in India

QT- December 2013

32

and existence, i.e. , it is an independent person co-existing in the

society and using its benefits. Therefore, it is a moral

responsibility/obligation of every person to contribute towards

preserving and developing the society/environment they live in.

The idea is to make every person environmentally and socially

responsible in order to share responsibility of sustaining and

developing the eco-space to co-exist in harmony without

jeopardizing the immediate present and long term future needs.

10 Reasons of why has CSR Gained Value?

Many factors and influences have led to increasing attention

being devoted to the role of companies in CSR. These include:

Sustainable Development: Humankind is using natural

resources at a faster rate than they are being replaced. In this

sense, much of current development is unsustainable.

CSR is an entry point for understanding sustainable

development issues and responding to them in a firm's business

strategy.

Globalization: With its attendant focus on cross-border trade,

multinational enterprises and global supply chains—economic

globalization is increasingly raising CSR concerns related to

human resource management practices, environmental

protection, and health and safety, among other things.

CSR can play a vital role in detecting how business impacts

labor conditions, local communities and economies, and what

steps can be taken to ensure business helps to maintain and build

the public good.

Governance: Governments and Intergovernmental Bodies

have developed Global Compact, Declarations, Guidelines,

Principles and other instruments that outline norms for what

they consider to be acceptable business conduct.

CSR instruments often reflect internationally-agreed goals and

laws regarding human rights, the environment and anti-

corruption.

Corporate Sector Impact: The sheer size and number of

corporations, and their potential to impact political, social and

environmental systems relative to governments and civil

society, raise questions about influence and accountability.

Companies are global ambassadors of change and values. How

they behave is becoming a matter of increasing interest and

importance.

Communications: Advances in communications technology,

are making it easier to track and discuss corporate activities.

Internally, this can facilitate management, reporting and

change.

In the CSR context, modern communications technology offers

opportunities to improve dialogue and partnerships.

Finance: Consumers and investors are showing increasing

interest in supporting responsible business practices and are

demanding more information on how companies are addressing

risks and opportunities related to social and environmental

issues.

A sound CSR approach can help build share value, lower the

cost of capital, and ensure better responsiveness to markets.

Ethics: A number of serious and high-profile breaches of

corporate ethics resulting in damage to employees,

shareholders, communities or the environment—as well as

share price—have contributed to elevated public mistrust of

corporations.

A CSR approach can help improve corporate governance,

transparency, accountability and ethical conduct.

Consistency and Community: Citizens in many countries are

making it clear that corporations should meet the same high

standards of social and environmental care, no matter where

they operate.

In the CSR context, firms can help build a sense of community

and shared approach to common problems.

Leadership: There is increasing awareness of the limits of

government, legislative and regulatory initiatives to effectively

capture all the issues that CSR address.

CSR can offer the flexibility and incentive for firms to act in

advance of regulations, or in areas where regulations seem

unlikely.

Business Tool: Businesses are recognizing that adopting an

effective approach to CSR can reduce the risk of business

disruptions, open up new opportunities, drive innovation,

enhance brand and company reputation and even improve

efficiency.

CSR can offer avenues for social business to grow and create

market opportunities for the bottom of the pyramid.

Four Phases of CSR Development in India

The history of CSR in India has its following four phases which

run parallel to India's historical development and has resulted in

different approaches towards CSR. Features of each phase may

QT- December 2013

33

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overlap other phases.

First Phase: In the first phase charity and philanthropy were the

main drivers of CSR. Culture, religion, family values and

tradition and industrialization had an influential effect on CSR.

In the pre-industrialization period, which lasted till 1850,

wealthy merchants shared a part of their wealth with the wider

society by way of setting up temples for a religious cause.

Moreover, these merchants helped the society in getting over

phases of famine and epidemics by providing food from their

godowns and money and thus securing an integral position in the

society. With the arrival of colonial rule in India from 1850s

onwards, the approach towards CSR changed. The industrial

families of the 19th century such as Tata, Godrej, Bajaj, Modi,

Birla, Singhania were strongly inclined towards economic as

well as social considerations.

Second Phase: In the second phase, during the independence

movement, there was increased stress on Indian Industrialists to

demonstrate their dedication towards the progress of the society.

This was when Mahatma Gandhi introduced the notion of

"trusteeship", according to which the industry leaders had to

manage their wealth so as to benefit the common man. "I desire

to end capitalism almost, if not quite, as much as the most

advanced socialist. But our methods differ. My theory of

trusteeship is no make-shift, certainly no camouflage. I am

confident that it will survive all other theories." This was

Gandhi's words which highlights his argument towards his

concept of "trusteeship". Gandhi's influence put pressure on

various industrialists to act towards building the nation and its

socio-economic development. Under his influence businesses

established trusts for schools and colleges and also helped in

setting up training and scientific institutions. The operations of

the trusts were largely in line with Gandhi's reforms which

sought to abolish untouchability, encourage empowerment of

women and rural development.

Third Phase: The third phase of CSR (1960–80) had its relation

to the element of "mixed economy", emergence of Public Sector

Undertakings (PSUs), and laws relating labour and

environmental standards. The public sector was seen as the

prime mover of development. Because of the stringent legal

rules and regulations surrounding the activities of the private

sector, the period was described as an "era of command and

control". The policy of industrial licensing, high taxes and

restrictions on the private sector led to corporate malpractices.

This led to enactment of legislation regarding corporate

governance, labour and environmental issues. PSUs were set up

by the state to ensure suitable distribution of resources (wealth,

food etc) to the needy. However the public sector was effective

only to a certain limited extent. This led to shift of expectation

from the public to the private sector and their active

involvement in the socio-economic development of the country

became absolutely necessary.

Fourth Phase: In the fourth phase (1980 until the present)

Indian companies started abandoning their traditional

engagement with CSR and integrated it into a sustainable

business strategy. In 1990s the first initiation towards

globalization and economic liberalization were undertaken.

Globalization has transformed India into an important

destination in terms of production and manufacturing bases of

MNCs. As Western markets are becoming more and more

concerned about and labour and environmental standards in the

developing countries, Indian companies who export and

produce goods for the developed world need to pay a close

attention to compliance with the international standards.

Companies Bill 2012 has identified thrust areas for CSR

activities.

Status of CSR – Is it Mandatory?

With the importance of CSR as discussed and understood

above, it becomes highly relevant to ensure that there are

statutory laws governing the CSR initiatives. The only

intention behind enacting pro-CSR legislations is to make these

initiatives under a statutory/legal status whereby it obligates

every person to own up on the task of corporate governance and

social responsibility. In India, there are basic laws mandating

and promoting CSR initiatives that are regulated under specific

legislations.

India enacted a few of the above legislations in order to give

effect to certain international conventions to which India is a

party by way of being a member to the United Nations. Since

most of the legislations statutorily mandate government

agencies and bodies to abide by the CSR activities, there is a

need for some serious voluntary contribution from the common

public- be it individual, corporate or any other person using the

ecosystem. In order to materialize the intentions and

expectations, the Ministry of Corporate Affairs has published

guidelines with respect to CSR, titled “Corporate Social

Responsibility Voluntary Guidelines 2009” (Voluntary

Guidelines). The guidelines are voluntary and not prepared in

the nature of a prescriptive road-map used for regulatory

purposes. The core elements of the Voluntary Guidelines are as

QT- December 2013

35

follows:

• Care for all stakeholders

• Ethical functioning

• Respect for workers' rights and welfare

• Respect for human rights

• Respect for environment

• Activities for social and inclusive development.

CSR in Companies Act 2013

Though the Companies Act, 1956 has mentioned about the

Corporate Social Responsibility and the duties of companies

towards social, economic growth and environmental

development, it was an optional activity. However, Clause 135

read with Schedule VII of the Companies Act, 2013 stipulates

provisions that mandate CSR spends and has included activities

like poverty eradication, education, improving maternal health

etc; whereas CSR in Corporate Governance Policy is based on

the UN Global Compact and covers areas on the Human Rights,

Labour Standards, Environment and Anti Corruption. Emerging

Areas of Corporate Social Responsibility

The Companies Act 2013 has a separate Section-135 on

Corporate Social Responsibility. The Section reads as

follows:

Every company having net worth of Rupees 500 crore or more,

or turnover of Rupees 1,000 crore or more, or a net profit of

Rupees 5crore or more during any financial year shall constitute

a Corporate Social Responsibility Committee of the Board

consisting of three or more directors, out of which at least one

director shall be an independent director.

(2)The Board's report under sub-section (3) of section 134 shall

disclose the composition of the Corporate Social

Responsibility Committee.

(3)The Corporate Social Responsibility Committee shall,

(a) formulate and recommend to the Board, a Corporate

Social Responsibility Policy which shall indicate the

activities to be undertaken by the company as specified

in Schedule VII;

(b) recommend the amount of expenditure to be incurred

on the activities referred to in clause (a); and

(c) monitor the Corporate Social Responsibility Policy of

the company from time to time.

(4)The Board of every company referred to in sub-section (1)

shall,--

(a) after taking into account the recommendations made

by the Corporate Social Responsibility Committee,

approve the Corporate Social Responsibility Policy

for the company and disclose contents of such Policy

in its report and also place it on the company's website,

if any, in such manner as may be prescribed; and

(b) ensure that the activities as are included in Corporate

Social Responsibility Policy of the company are

undertaken by the company.

(5)The Board of every company referred to in sub-section (1),

shall ensure that the company spends, in every financial

year, at least two per cent, of the average net profits of the

company made during the three immediately preceding

financial years, in pursuance of the Corporate Social

Responsibility Policy,

Provided that the company shall give preference to the local

area and areas around it where it operates, for spending the

amount earmarked for Corporate Social Responsibility

activities;

Provided further that if the company fails to spend such amount,

the Board shall in its report made under clause (0) of sub-section

(3) of section 134, specify the reasons for not spending the

amount.

Explanation –For the purposes of this section “average net

profit” shall be calculated in accordance with the provisions of

Section 198.

Schedule VII: Has been added to include activities for

inclusion in CSR Policy by companies.

Schedule VII: Activities which may be included by companies

in their Corporate Social Responsibility Policies

Activities relating to:-

(i) Eradicating extreme hunger and poverty;

(ii) Promotion of education;

(iii) Promoting gender equality and empowering women;

(iv) Reducing child mortality and improving maternal

health;

(v) Combating human immune-deficiency virus, acquired

immune deficiency syndrome, malaria and other

diseases;

QT- December 2013

36

(vi) Ensuring environmental sustainability;

(vii) Employment enhancing vocational skills;

(viii) Social business projects;

(ix) Contribution to the Prime Minister's National Relief

Fund or any other fund set up by the Central

Government or the State Governments for socio

economic development and relief and funds for the

welfare of the Scheduled Castes, the Scheduled tribes,

other backward classes, minorities and women; and

(x) Such other matters as may be prescribed.

Embedding CSR in Business through Leadership

Leadership is critical for the success of CSR programmes.

Leaders need to have certain defined qualities to make CSR an

integral part of business strategy.

Four key factors set the leaders apart from the pack are:

integration; innovation; accountability; and engagement. These

are defined below.

a)Integration: Leaders in corporate responsibility integrate

CSR into their core business structures and strategies. They

have clearly stated corporate values and principles. They lead

from the board level, with independent board level

committees to champion and monitor their corporate

responsibility performance. In addition to board level

involvement, leading companies systematically identify the

key issues and stakeholders for their company and industry

sector. And they establish appropriate policies and procedures

to manage these, with a clear line of accountability to the

executive management team and board. Some companies are

starting to integrate performance requirements for

responsible business practices into their management

appraisal and incentive systems.

b) Innovation: Leaders in corporate responsibility look at

corporate responsibility not only from the perspective of

compliance and risk management, but also with an

opportunity and value creation. They integrate ethical, social

and environmental criteria into their research and

development policies. Leading companies are also actively

engaged in institutional innovation. They are supporting new

voluntary frameworks and coalitions to change the public

policy discourse and to create 'new rules of the game'. These

include voluntary initiatives such as the UN Global Compact,

the Ethical Trading Initiative and the Global Alliance for

Workers and Communities.

c) Accountability: Leaders in corporate responsibility make a

public commitment to their purpose, their principles and their

goals. They set measurable targets and timelines for

addressing what they consider to be their company's critical

issues and stakeholders. They aim to measure their

performance and publicly report on it in a consistent and

transparent manner. Some are establishing key performance

indicators and metrics. The best companies are committed to

independent verification of their performance. The Global

Reporting Initiative, which was established as an

independent, multi-stakeholder organization during 2002,

estimates that some 500 companies are now officially using

its guidelines to report on their sustainability performance.

d) Engagement: Leaders in corporate responsibility engage in

systematic communication, consultation and collaboration

with their key stakeholders. They host stakeholder forums

and some establish permanent stakeholder advisory panels at

either the corporate level, the plant level, to address a specific

issue. The examples of institutional innovation outlined

above also illustrate new types of stakeholder engagement.

This engagement serves several purposes. It can help to

change governance frameworks or influence public policy. It

can serve as an accountability mechanism for corporate

responsibility performance. It can help to mobilize diverse

resources to solve development or social problems. And it can

create a space for shared learning and experimentation.

CSR in India – A Few Examples

The basic objective of CSR in these days is to maximize the

company's overall impact on the society and stakeholders. CSR

policies, practices and programs are being comprehensively

integrated by an increasing number of companies throughout

their business operations and processes. A growing number of

corporates feel that CSR is not just another form of indirect

expense but is important for protecting the goodwill and

reputation, defending attacks and increasing business

competitiveness.

Companies have specialised CSR teams that formulate policies,

strategies and goals for their CSR programmes and set aside

budgets to fund them. These programmes are often determined

by social philosophy which have clear objectives and are well

defined and are aligned with the mainstream business. The

programmes put into practice by the employees who are crucial

to this process. CSR programmes range from community

development to development in education, environment and

QT- December 2013

37

healthcare etc.

For example, a more comprehensive method of development is

adopted by some corporations such as Bharat Petroleum

Corporation Limited, Maruti Suzuki India Limited, and

Hindustan Unilever Limited. Provision of improved medical

and sanitation facilities, building schools and houses, and

empowering the villagers; and are in the process making them

more self-reliant by providing vocational training and

knowledge of business operations. A few examples of winners

of Golden Peacock Awards for CSR will illustrate the point

further.

On the other hand, the CSR programmes of corporations like

GlaxoSmithKline Pharmaceuticals focus on the health aspect

of the community. They set-up health camps in tribal villages

which offer medical check-ups and treatment and undertake

health awareness programmes. Also, Corporates increasingly

join hands with Non-Governmental Organizations (NGOs) and

use their expertise in devising programmes which address wider

social problems.

For example, a lot of work was undertaken to rebuild the lives of

the tsunami affected victims. This was exclusively undertaken

by SAP India in partnership with Hope Foundation, an NGO that

focuses mainly on bringing about improvement in the lives of

the poor and needy.

Partnerships between companies, NGOs and the government

are being facilitated so that a combination of their skills such as

expertise, strategic thinking, manpower and money to initiate

extensive social change will put the socio-economic

development of India on a fast track.

Conclusion

CSR has gone through many phases in India. The ability to

make a significant difference in the society and improve the

overall quality of life has clearly been proven by the corporates.

Not one but all corporates should try and bring about a change in

the current social situation in India in order to have an effective

and lasting solution to the social woes. Partnerships between

companies, NGOs and the government should be facilitated so

that a combination of their skills such as expertise, strategic

thinking, manpower and money to initiate extensive social

change will put the socio-economic development of India on a

fast track.

Companies Act 2013 has incorporated directions for CSR

activities that will ensure regulation of activities by integrating

with national development plans; and thereby CSR activities

are expected to support government actions for social

development. Every company is expected to focus on

development of areas around their operational centres of work.

*Pradeep Chaturvedi, Vice President, Institute of Directors

ASSESSORS INVITEDWould you like to be an assessor of these most prestigious awards

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Golden Peacock Awards ScretariatM-52 (Market), Greater Kailash Part - II, New Delhi-110048, IndiaTel: 011 - 41636717, 41636294, 41008704 Email: info@goldenpeacockawards.com

Corporate Social Responsibilty

A most rewarding and rich learning experienceA most rewarding and

rich learning experience

Supported by

IODInstitute of Directors

Building

Tomorrow’s

Boards

Lis

ten

to

th

e

GA

LA

XY

OF

EX

PE

RTS

It will be interesting to see if this combination of legal prescription and open market will force to yield the desired intent: to increase CSR among the business community in India.

8th International Conference on

on 17-18 January 2014at Hotel ITC Windsor Manor, Bengaluru (India)

Prabh DasMD & CEO, HPCLMittal Energy Ltd.

Ashish K ChauhanMD & CEO, Bombay

Stock Exchange

Mao MohapatraChief Executive Officer,

Mahindra Comviva

Deepak AmitabhChairman cum Managing

Director, PTC India Ltd

Justice M N VenkatachaliahNational Chairman, IOD &

former Chief Justice of India

Gunelie WinumExpert Consultant International

Programs, Norway

Shyam Srinivasan MD & CEO, Federal Bank Ltd

P DwarakanathAdvisor – Group Human

Capital, Max India

Kaushik Mukherjee IAS, Chief Secretary, Govt. of Karnataka

H. E.Sri H.R. Bhardwaj Governor of Karnataka

Dr Tayeb A. KamaliVice-Chancellor, Higher

Colleges of Technology, UAE

A.K. MirchandaniChairman-cum-Managing

Director, PEC Ltd.

Adil MaliaPresident - Group HR

Essar Group

R RamananMD & CEO, CMC Limited

Sanat HazraDirector – Technical, The Times of India

Dr. Shalini RajneeshIAS, Secretary to Govt., Dept of. Personnel & Administrative Reforms, Govt. of Karnataka

Hon. Dr. M. Veerappa MoilyUnion Cabinet Minister for Petroleum and Natural Gas

Dr Bhaskar Chatterjee IASDG & CEO, Indian Institute

of Corporate Affairs

Smt. Nishi VasudevaDirector Marketing, Hindustan

Petroleum Corporation Ltd.

R K DubeyChairman cum MD, Canara Bank Ltd.

IODInstitute of Directors

Building

Tomorrow’s

Boards

Also Presentation of

& Innovation Managementfor Corporate Social Responsibility

Golden Peacock Awards

INSTITUTE OF DIRECTORS: M-52 (Market), Greater Kailash Part-II New Delhi – 110048, India Board Nos. : +91-11- 41636294 41636717, 41008704 • Fax: +91-11- 41008705 • Email: info@iodonline.com www.iodonline.com

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India’s Parliament mandates Corporate Social Responsibility spending, through a statutory provision under the Companies Act 2013

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QT- December 2013

Plenary Session- III

Welcome Address

Special Address

Chief Guest Address

Inaugural Session

Lt Gen J S Ahluwalia, PVSM (retd), President, Institute of Directors

Kaushik Mukherjee IAS, Chief Secretary, Govt. of Karnataka

His Excellency Dr Hans Raj Bhardwaj, Governor of Karnataka

Lunch Break 1300 – 1400 hrs

Plenary Session – IV

Panel Discussion

Moderator

Panelists

Making CSR an Actionable Business Agenda

· · Strategic approach to building brands, reputation and trust· Profiting from your business by turning it into a cause· Budgeting for CSR – Companies Act 2013 & Role of Govt.

Social Responsibility Agenda – an emerging corporate

TBD

Adil Malia, Group President- HR, Essar Group

Sanat Hazra, Director, The Times of India

Lt. Gen. Rajender Singh, CEO, DLF Foundation

Mohini Daljeet Singh, CEO, Max India Foundation

Melanie Richards, Founder, CSR Solutions Ltd, Trinidad

Ornella Cilona, Italian General Confederation of Labour, Italy

Interaction with audience

1400 – 1515 hrs

Plenary Session – V

Panel Discussion

Moderator

Panelists

Strategizing CSR – Creating Shared Value

· Aligning and embedding CSR in business strategy · Social initiatives of community involvement strategy · Strategy and society – the link between CSR and competitive advantage · Dynamic nature of CSR Agenda · CSR – Reaching directly or through NGO's?

TBD

Prabh Das, MD & CEO, HMEL (HPCL–Mittal Energy), India

Deepak Amitabh, Chairman cum Managing Director, PTC

India Ltd

Ajay Poddar, Managing Director, Synergy Environics Ltd.

Namita Vikas, Senior President and Chief Sustainability

Officer, YES BANK

Kaustubh Bodhankar, Deputy CEO, Global School Foundation, Singapore

Manju Dhasmana, Head CSR (Community Affairs), Microsoft India*

Interaction with audience

1515 - 1630 hrs

41

QT- December 2013

Tea / Coffee Break 1630 – 1700 hrs

Plenary Session – VI

Panel Discussion

Session Chairman

Panelists

Mandating CSR in India

·

· How Corporate India can leverage a mandatory CSR

· How mandatory legislation will help for the long term

· Integrating CSR in Companies business strategies

· Mandating CSR for Social good

An opportunity to work together for common good

Dr Bhaskar Chatterjee IAS, DG & CEO, Indian Institute of Corporate Affairs

R K Dubey, Chairman cum Managing Director, Canara Bank Ltd.

Shyam Srinivasan, MD & CEO, Federal Bank Ltd

Smt. Nishi Vasudeva, Director Marketing, Hindustan Petroleum

Corporation Ltd.

Mao Mohapatra, Chief Executive Officer, Mahindra Comviva

Ramanathan Ramanan, MD & CEO, CMC Limited

Interaction with audience

Plenary Session - VII GOLDEN PEACOCK AWARDS NITE 1900 – 2030 hrs

Welcome Address

Chairman

Special Addresses

Chief Guest Address

Lt Gen J S Ahluwalia, PVSM (retd), President, Institute of Directors, India

Hon'ble Justice M N Venkatachaliah, National Chairman, Institute of Directors and former Chief Justice of India

Dr Tayeb A. Kamali, Vice-Chancellor, Higher Colleges of Technology, UAE

Hon'ble Dr. M. Veerappa Moily, Union Cabinet Minister for Petroleum and Natural Gas*

Presentation of Golden Peacock Awards forCorporate Social Responsibility and InnovationManagement for the year 2013

THSATURDAY, 18 JANUARY, 2014

Plenary Session – IX Stories of Success CSR Case study presentations

0900 – 1115 hrs

Tea / Coffee Break 1115 – 1130hrs

Richard Howitt MEP, Member of the European Parliament for the

East of England and European Parliament Spokes Person on CSR

42

QT- December 2013

Plenary Session - X

Panel Discussion

Moderator

Panelists

Corporate citizenship – CSR as new agenda beyond governance

· How to build brand through CSR initiatives· Harness innovative energies of business for creating social value· New culture of society centered business growth· CSR – stakeholders perspectives, transparency, ethics and trust

Interaction with audience

1130 – 1300 hrs

TBD

A.K. Mirchandani, Chairman-cum-Managing Director, PEC Ltd.

P Dwarakanath, Advisor – Group Human Capital, Max India

Vijay Chadda, CEO, Bharti Foundation

Sundeep Kumar, Head of Public Affairs, Novartis India

Lunch Break 1300 – 1345 hrs

Plenary Session – XI

Panel Discussion

Moderator

Panelists

Social Innovation for Economic Growth and Business Sustainability

· managing Strategic CSR

Social Innovation – Practical challenges and barriers in

· Social dimension of business – Corporate conscience

· development

Impact of CSR on equitable economic and social

· Economic Growth. Social Impact Assessments & Social Media

Role of media in creating social innovations – the drivers of

TBD

Prof Colin Coulson-Thomas, International Authority on

Director, Board & Business Development & Transforming

Performance, UK*

Muhammad Abdullah Yusuf, Chairman, Pakistan Institute of Corporate Governance

Manoj Dawane, Vice President - Technology, Govt. & Ind

Relations and Sustainability, Ericsson India

R S Sharat, Director, Lanco Foundation

Interaction with audience

1345 – 1500 hrs

43

QT- December 2013

Plenary Session – XII

Panel Discussion

Moderator

Panelists

CSR – Unlocking the Value

·

· Business Social Initiatives and community involvement strategy

· Rise of Corporate Social Responsibility in emerging economies

· CSR to Alleviate Poverty and help achieve on the 'Millennium

Develop Goals'

CSR as a driver of social inclusion , sustainability & profits

TBD

Martin Neureiter, founder and CEO, The CSR Company, Austria*

Gunelie Winum, Expert Consultant International Programs, Norway

Christopher Gleadle, Senior Partner, CMG Consultancy, UK

Favad Soomro, Director Engro Foundation, Pakistan

Ambreen Waheed, Founder & Advisor, Responsible Business I

nitiative, Pakistan

1500 – 1630 hrs

Interaction with audience

*CONFIRMATION AWAITED

Closing Remarks of the Conference

1630 hrs

THSATURDAY, 18 JANUARY, 2014 1700hrs

Business Study Tour & Industry Visit to The Times of India Press, BangaloreBCCL, 9, 10, 11A, Bommasandra Industrial Area, Hosur Road, Bangalore – 99

Bennett, Coleman & Co. Ltd. popularly known as Times Group is one of the oldest media groups of India with first edition going to print in 1838. Today, the group does more than USD 1.2 Billion in revenue every year. The group has specific

business interests in the entire gamut of media ranging from Newspapers to magazines to internet to TV. The company has eleven publishing centres, twenty two printing centres, sixty one sales offices, over 11000 employees, thirteen dailies, including four of the largest in the country, twenty-nine niche magazines reaching 2468 cities and towns,

Radio Stations, two Television News Channels, one Television Life Style Channel and one movie channel.

BCCL owns amongst the top brands in media. Times of India, Economic Times, Bangalore Mirror, Mumbai Mirror and Vijay Karnataka are top dailies in their respective categories.

The Times of India known for innovations and green initiatives.

1645 hrs Assemble at the Entrance of Hotel ITC Windsor Manor for Study Tour

1700 hrs Coaches depart from Hotel ( limited seats , prior reservation is required)

1800 hrs Arrive at Times of India / BCCL Bangalore PlantWelcome and networking with members of The Times Group

1815 – 1830 hrs Welcome AddressM. R. Vasudevan, Dy Director, The Times of India

1830 – 1850 hrs Special AddressSanat Hazra, Director – Technical, The Times of India

1850 – 2000 hrs Plant Tour of The Times of India Printing Facilities

2000 hrs Networking Dinner

2100 hrs End of Visit . Coaches depart for Hotel ITC Windsor

Visit Programme

44

THE TIMES OF INDIA

The Times of India was founded on 3 November 1838 as The Bombay Times and Journal of

Commerce in Bombay, during the British Raj, published every Saturday and Wednesday,

which is now celebrating 175 years of publication.

The daily editions of the paper were started from 1850 and in 1861; the Bombay Times

was renamed as The Times of India after amalgamation of three more newspapers.

The Times of India is published by the media group

Bennett, Coleman & Co. Ltd. This company, along

with its other group companies, known as The

Times Group, also publishes The Economic Times,

Mumbai Mirror, Pune Mirror, Bangalore Mirror,

Ahmedabad Mirror, the Navbharat Times (a Hindi-

language daily broadsheet), the Maharashtra

Times (a Marathi-language daily broadsheet),

Vijaya Karnataka (Kannada language daily

broadsheet) and EiSamay (a Bengali daily).

Business Study Tour & Industry Visit to The Times of India Press, BangaloreTHSATURDAY, 18 JANUARY, 2014

In 2013, circulation reached over 4.47 million and is

certified by the Audit Bureau of Circulations (India) as

the world's largest selling broadsheet English-

language daily, ranking as the 3rd largest selling

newspaper in any language in the world.

According to the Indian Readership Survey (IRS) 2012,

the Times of India is the most widely read English

newspaper in India with a readership of 76.43 lakhs

(7.643 million). This ranks the Times of India as the top

English daily in India by readership.

THE TIMES OF INDIA PRESS, BOMMASANDRA

The Times of India press in Bommasandra industrial area

which is the largest printing plantin south India started in

year 2005 with the printing presses from MAN Roland,

Germany, mailroom equipment's from Switzerland,

Krause CTPs from Germany.

The Bangalore plant is capable of producing 3.10 lakh

copies per hour. Average pages produced about 90 crore

per month, consuming 3700 metric tons of newsprint, 75

tons

of ink, 30000 plates & 5 lakhs units of power

consumed every month.

In 2010 Bangalore press won the prestigious International Color Quality Club (INCQC) Competition held by WAN-IFRA, Germany in the first appearance which is for the period of 2010-12. Consecutively again won this competition for the membership for 2012 -14.

Date Publication: 5th December 2013

Date of Posting: 6th - 7th December 2013Postal Registration No.: DL (S)-01/3051/2013-2015

RNI No.68701/95

Printed and published by J.S.Ahluwalia, President on behalf of Institute of Directors at Maximus Packers.49 - DSIDC Okhla Phase - 1, New Delhi and published at M-52 (Market), Greater Kailash-II, New Delhi - 110048