Corporate Social Responsibility

Definitions of CSR
It is a set of obligations to pursue those policies, to make those decisions, or to follow those lines of action which are desirable in terms of the objectives and values of our society. It is the overall relationship of the corporate with all of its stakeholders. Elements of social responsibility include investment in community outreach, employee relations, creation and maintenance of employment, environmental stewardship and financial performance.

 Public interest was served best by individuals pursuing their own self-interests. The socio-economic model: Business is seen as one subsystem among many in a highly interdependent society. 1. It recognizes that companies have stakeholders other than their stockholders. 2. Business has an obligation to respond to the needs of all stakeholders while pursuing its profit.

What are Corporations Expected to Do?

Corporations need to erase the perception of the public that they accumulate wealth for their own cause; They should participate in social welfare projects, which will improve their image in public esteem; They also have to make quality products and stick to delivery schedules while importing and exporting goods; and They should create employment opportunities for the disadvantaged.

Four Models of CSR

Advantages of Corporate Social Responsibility

1. Improved financial performance 2. Enhanced brand image and reputation 3. Increased sales and customer loyalty 4. Increased ability to attract and retain employees 5. Reduced regulatory oversight 6. Innovation and learning 7. Risk management 8. Easier access to capital 9. Reduced operating costs

Understanding Social Responsibility of Business

1)

2) 3) 4) 5) 6) 7) 8)

Protecting and promoting stakeholders interests a) to consumers and community b) social responsibilities of business towards employees c) to owners and inter-business establishments Promotion of common welfare programmes Philanthropy Good corporate governance Render social service Abiding by rules and regulations Creation of wealth Ensure ecological balance

Steps to Corporate Social Responsibility

1. Confirm CEO/Board commitment to prioritize responsible business conduct 2. State company purpose and agree on company values 3. Identify key stakeholders 4. Define business principles and policies 5. Establish implementation procedures and management systems 6. Benchmark against selected external codes and standards 7. Set up internal monitoring 8. Use language that everyone can understand 9. Set pragmatic and realistic objectives.

Future of Indian CSR

There is a clear need for

Transition from the present compliance centric approach to the new paradigm Creation of an enabling environment and an array of support measures. Business schools teaching CSR to facilitate this process Industry associations to share experiences and reward best practice Need to incorporate public policies into the Indian CSR. International agencies to share cross-country experience.

External Standards on CSR

The Caux Round Table (CRT) Organization for Economic Cooperation and Development (OECD) United Nations Global Compact Asian-Pacific Economic Cooperation (APEC) Business Code of Conduct The Global Reporting Initiative (GRI)

External Standards on CSR

AA1000 Accountability Social Accountability 8000 Principles for Global Corporate Responsibility The Global Sullivan Principles The Keidanren Charter for Good Corporate Behaviour

Scope of Corporate Social Responsibility

Three levels of social responsibility can be identified (evolution of areas of social responsibility) 1.Market forces 2.Mandated actions 3.Voluntary actions