Write up for Corporate Responsibility in Indian Business Houses

First of all Corporate Responsibility is not only Corporate Social Responsibility. Corporate Responsibility is an umbrella term. Corporate Responsibility covers many aspects such as Corporate Governance Corporate Social Responsibility
Economic Responsibility Ecological Responsibility Social Responsibility

Corporate Citizenship

Corporate Responsibility
Corporate responsibility means long-term profitability. And heres why With all this talk about reporting, labeling, transparency and social responsibility, companies are scrambling to find the right balance between responding to consumer pressure, government mandates, client requirements, and employee demands, while at the same time satisfying their investors and shareholders. Is this sustainable? Can we really demand so much from our corporations? Can we truly expect companies to behave this way and still make money? The answer is a resounding YES! Let me explain. There is more than a 100-year history of sustainable and profitable businesses because contributing to society (and not just through annual tax-deductible donations) meant more than just satisfying one set of stakeholders. The companies invested in all their assets suppliers, employees, and customers and it paid off. It paid off well. What we are now asking of todays companies is to include the environment as one of their assets, and it can pay off just as well. What sustainability truly mean? Sustainable fishing practices ensure that there is a fish population abundant enough to harvest in generations to come that provides profit for today and for tomorrow. Sustainable forestry practices ensure that there are forests to harvest for future generations. Fair trade practices ensure that farmers in developing countries have the infrastructure and technical support to supply quality raw ingredients for today and for the future. Its about caring about the quarterly numbers but not at the expense of the next quarter, year, or generation. And its profitable.

Corporate responsibility, or corporate social responsibility, is the concept that an organization has obligations not just to conduct its business and adhere to legal guidelines, but also to look out for the welfare of its employees, the community, and society at large. Companies can display their commitment to corporate responsibility in many ways- some give to charities, others organize community events, sponsor causes, or make a firm commitment to be eco-friendly. While some people view corporate responsibility as a genuine effort by firms to reach out into the community and look past the profit-driven side of business, others are wary that firms use corporate responsibility as a PR device to gain good favor from consumers. Many firms are now making corporate responsibility a priority, and information on corporate social and community practices is now easier than ever to find. Check out what the companies you support are doing to help society. You can usually look up a companys position on corporate responsibility, as well as activities they engage in to honor their commitment to corporate responsibility, online on the companys website. Also, you can check out what corporate watchdogs and other consumers have to say about green washing (deceiving consumers with false or misleading green claims) because they will often identify specific brands and companies guilty of misleading claims about being green.

CORPORATE GOVERNANCE
Corporate governance involves regulatory and market mechanisms, and the roles and relationships between a companys management, its board, its shareholders and other stakeholders, and the goals for which the corporation is governed. Lately,

corporate governance has been comprehensively defined as "a system of law and sound approaches by which corporations are directed and controlled focusing on the internal and external corporate structures with the intention of monitoring the actions of management and directors and thereby mitigating agency risks which may stem from the misdeeds of corporate officers." In contemporary business corporations, the main external stakeholder groups are shareholders, debt holders, trade creditors, suppliers, customers and communities affected by the corporation's activities. Internal stakeholders are the board of directors, executives, and other employees. Much of the contemporary interest in corporate governance is concerned with mitigation of the conflicts of interests between stakeholders. Ways of mitigating or preventing these conflicts of interests include the processes, customs, policies, laws, and institutions which have an impact on the way a company is controlled. An important theme of corporate governance is the nature and extent of accountability of people in the business. There has been renewed interest in the corporate governance practices of modern corporations, particularly in relation to accountability, since the high-profile collapses of a number of large corporations during 2001-2002, most of which involved accounting fraud Principles of corporate governance Rights and equitable treatment of shareholders: Organizations should respect the rights of shareholders and help shareholders to exercise those rights. They can help shareholders exercise their rights by openly and

effectively communicating information and by encouraging shareholders to participate in general meetings. Interests of other stakeholders: Organizations should recognize that they have legal, contractual, social, and market driven obligations to nonshareholder stakeholders, including employees, investors, creditors,

suppliers, local communities, customers, and policy makers. Role and responsibilities of the board: The board needs sufficient relevant skills and understanding to review and challenge management performance. It also needs adequate size and appropriate levels of independence and commitment Integrity and ethical behavior: Integrity should be a fundamental requirement in choosing corporate officers and board members.

Organizations should develop a code of conduct for their directors and executives that promotes ethical and responsible decision making. Disclosure and transparency: Organizations should clarify and make publicly known the roles and responsibilities of board and management to provide stakeholders with a level of accountability. They should also implement procedures to independently verify and safeguard the integrity of the company's financial reporting. Disclosure of material matters concerning the organization should be timely and balanced to ensure that all investors have access to clear, factual information. Corporate governance models around the world There are many different models of corporate governance around the world. These differ according to the variety of capitalism in which they are embedded. The Anglo-American "model" tends to emphasize the interests of shareholders. The

coordinated or Multi stakeholder Model associated with Continental Europe and Japan also recognizes the interests of workers, managers, suppliers, customers, and the community. Continental Europe Some continental European countries, including Germany and the Netherlands, require a two-tiered Board of Directors as a means of improving corporate governance. In the two-tiered board, the Executive Board, made up of company executives, generally runs day-to-day operations while the supervisory board, made up entirely of non-executive directors who represent shareholders and employees, hires and fires the members of the executive board, determines their compensation, and reviews major business decisions. India India's SEBI Committee on Corporate Governance defines corporate governance as the "acceptance by management of the inalienable rights of shareholders as the true owners of the corporation and of their own role as trustees on behalf of the shareholders. It is about commitment to values, about ethical business conduct and about making a distinction between personal & corporate funds in the management of a company United States, United Kingdom The so-called "Anglo-American model" of corporate governance emphasizes the interests of shareholders. It relies on a single-tiered Board of Directors that is normally dominated by non-executive directors elected by shareholders. Because of this, it is also known as "the unitary system"). Within this system, many boards

include some executives from the company (who are ex officio members of the board). Non-executive directors are expected to outnumber executive directors and hold key posts, including audit and compensation committees. The United States and the United Kingdom differ in one critical respect with regard to corporate governance: In the United Kingdom, the CEO generally does not also serve as Chairman of the Board, whereas in the US having the dual role is the norm, despite major misgivings regarding the impact on corporate governance. Key elements in corporate governance are:Transparency Disclosure Supervision & Internal Controls Risk Management Internal & External Communications Standards of Safety Health Principles, Product & Service Quality The Corporate Governance Checklist This checklist consists of what the management should disclose to the Board. These are as follows: Annual operating plans, budgets and updates. Capital budgets Quarterly results of the company Minutes of all meeting of various committees Remuneration of senior executives

Legal issues and notices Safety and environmental issues Defaults in loans, and bad debts, if any Any new JV or collaboration Labor issues, including wages pact and VRS Sale of subsidiaries or investment Foreign exchange exposure Factors influencing corporate governance: The ownership structure of a company The financial structure The structure and functioning of the company boards The legal, political and regulatory environment with in which the company operates

CORPORATE SOCIAL RESPONSIBILITY

Corporate Social Responsibility is the continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as of the local community and society at large.

CSR=corporate +social+responsibility In broad terms, CSR relates to responsibilities that corporations have towards society, within which they are based and operate. An organizations obligation to maximize its positive impact on stakeholders and to minimize its negative impact. It includes legal, ethical, economic, and philanthropic (discretionary) dimensions.

Four Areas of CSR

1.Workplace: A responsible company makes sure to tackle concerns such as work-life balance and diversity in the workplace. People are the companys greatest asset, so it needs to invest in them seriously and work on enhancing their lives and their families well being. 2.Community: Businesses cannot succeed in a society that fails. A socially responsible company tries to get involved with its neighbors and the society at large by addressing local problems and having impactful contributions. 3.Environment: Environmental good practice is about optimizing business efficiency through the best use of natural resources. We need to ensure a sound management of these resources at present in order to avoid limiting those of generations to come.

4.Marketplace: A companys ability to succeed in the long term depends on its ability to create value that goes beyond financial profits and to build-up mutual trust with its business partners and consumers.

Theories of CSR
Theory Social Responsibility

Shareholder Theory

To maximize profits for stockholders.

Moral Minimum

To avoid causing harm and to compensate for harm caused.

Corporate Citizenship

To consider the interests of all stakeholders, including stockholders, employees, customers, suppliers, creditors, and community.

Stakeholder Theory

To do good and solve social problems

Ranking Countries On Their Commitments To CSR

Country Sweden Denmark Finland Iceland United Kingdom Norway New Zealand Ireland Australia Canada Rank 1 2 3 4 5 6 7 8 9 10 Country Germany Netherlands Switzerland Belgium Singapore Austria France United States Japan Hong Kong, China Rank 11 12 13 14 15 16 17 18 19 20

CSR itself is an umbrella term which covers the following:

Economic Responsibilities Ecological Responisbilities Social Responisbilities

Economic Responisibilites
Four Basic Economic Responsibilities of a Business A business has economic responsibilities to its direct stakeholders its investors, employees, and customers. A business has an ethical obligation to meet these responsibilities. There are four basic economic responsibilities a business has to its direct stakeholders: 1. Profitability: A business creates profit when it sells products or services that are more valuable than the materials and labor it uses to create them. Put simply, the business creates profit by adding value.

Adding value and creating profit serve the interests of all of a company's direct stakeholders. The company produces products or services that are valuable to customers. The company uses profits to reward investors and pay employees. 2. Transparency: When a business acts with transparency, it provides as much information as practical about its operations. The company allows direct stakeholders to clearly see its practices, strategies, and financial positions. Transparency benefits direct stakeholders. Transparency serves the interests of investors by giving them information they need to evaluate the potential risks and rewards of investing in the company. Transparency lets employees and customers see how a company is run. They can make informed decisions about where they work and where they spend their money. 3. Nondiscrimination: In an economic sense, nondiscrimination doesn't refer to the absence of bias against gender or ethnic groups. It means a business applies the same financial criteria to all of its customers, suppliers, and

employees. Direct stakeholders benefit from nondiscrimination because the company makes decisions on the financial merit, rather than on the biases and preferences of decision makers. 4. Sustainability: Businesses ensure the sustainability of their operations by improving business processes and developing secure, long-lasting

relationships with suppliers and customers. An organization's investors, employees, and customers are called direct stakeholders because they have a stake in the company's future. Economic Responsibilities covers the following: Financial Performance Risk Management Resource Efficiencies Supplier Relations Customer Satisfaction

Ecological Responsibilities
Environmental justice and corporate social responsibility focuses more on the political, social, institutional contexts of environmental action and thus links ethics to policy. It considers how ethics, policy and action work together and how movements, NGOs, civil organization partnerships and private-public partnerships can provide the space for enacting environmental responsibility? More specifically, the part covers (i) central virtues of ecological justice in relation to other virtues (hope, love, wisdom, forgiveness, sadness, courage, obligation etc.);

(ii) initiatives relating to notions of corporate responsibility and ecological citizenship measuring up to multiple values and requirements of virtue as well as the good and the right; and (iii) the politics of new types of citizenship where the framing of ecological citizenship might enable appropriate dialogue between public and the private, local and the global, future and the present, acting and thinking, rights and responsibilities etc. bridging the gap between (a) awareness of environmental injustices and development of environmental responsibility, and (b) civic engagement with ecological citizenship. Ecological Responsibilities covers the following: Spill prevention Energy Saving Climate Protection Waste Management Bio Diversity i.e, the variety of life in the world or in a particular habitat or ecosystem.

Social Responsibility
It covers the following aspects: Health & Safety Education & Training Labor Standards Equal Opportunities

Work Life Balance

Corporate Citizenship
It means that corporations should be regarded as citizens within a territory i.e. that corporations have citizenship of some sort. Therefore, if corporations are 'artificial persons' under the law (e.g. they own their own assets, they can sue and be sued etc.), then they can also claim some of the entitlements, privileges and protections of citizenship such as rights to free speech and political participation. Every business has a responsibility to do good. Business is responsible for helping to solve social problems. Corporations owe a duty to promote the same social goals as do individual members of society. Corporations owe a debt to society to make it a better place. It covers the following aspects: Youth Education Volunteering Sponsorship Culture and sports Research