By - Media Bytes
Corporate Governance and Corporate Social Responsibility are the two areas of the corporate world that have gained focus of many discussions and studies. The significance of both these topics has grown in the business as well as the academic arena, in the past few years. Analyzing the importance and implications of both Corporate Governance and Corporate Social Responsibility, it becomes easy to get an idea about an organization’s contribution to the social development of a country.
The Indian Scenario
In India, the essential CSR motives and goals started to change from the independence movement, when the attention of companies started to shift towards communal reforms to women empowerment and rural growth. The last decade in India has witnessed gradual evolution of CSR and Corporate Governance as some companies started focusing on premeditated CSR initiatives to contribute towards nation building. Slowly and steadily need-based initiatives started getting the attention of companies in India, aligning with the national priorities such as resource management, cleanliness, water conservation, public health, education, etc.
Apart from this, rigorous nationwide discussions on the role of the corporate sector in building social awareness for critical social issues also contributed to the expansion of this sector in building India’s social life better than before. In India, some instruments like The United Nations Global Compact Principles and ISO 26000 Standard on Social Responsibility of the International Organization of Standards identify the contours of Corporate Social Responsibility and guide companies in this field.
In India, the Companies Act, 2013 governs the CSR activities. The provisions within the Company Act are applicable to the organizations that record a yearly revenue of thousand crore INR and more, or a net value of five hundred crore INR and more, or a net profit of five crore INR and more. In terms of transparency and disclosure, The Companies Act, 2013 has introduced the idea of Corporate Social Responsibility to the forefront through its disclose-or-explain mandate. Schedule VII of the Companies Act lists out the Corporate Social Responsibility activities and indicates the communities to be the focus of such initiatives.
The CSR stance in India is moving ahead in a constructive course as there are a number of regulatory bodies such as the DPE, MCA, and IICA that have laid the foundations to make CSR a prevalent practice in India. Paying attention to the need-based and effective CSR activities and strategies is the main solution to augment the returns for all the stakeholders so that the investments can yield intended results. It is of vital importance that the CSR initiatives should be planned in a sustainable, scalable and result-oriented approach to improve the social life in India.