Corporate Social Responsibility in India Essay

The basic principle of the sustainable development and Corporate sociable Responsibility is the combination of needs important both from the point of view of an institution, as well as a group of entities operating in its environs (employees, shareholders, stakeholders, borrowers, local society) within its business policy. Thus, the goal of a contemporary organisation should be to maximise its shareholders value satisfying, at the same time, expectations of other stakeholders (stakeholders value) by consolidation economic, social and environmental operations.There are many factors that make us interested in Corporate Social Responsibility 2 New problems and expectations of citizens, customers, semipublic authorities and investors in the context of globalisation and significant industrial changes Social criteria have bigger and bigger influence on investment decisions made by units and institutions playing both the role of consumers as well as investors Bigger and bigger care f or damages caused to natural environment by business activities foil of business activities supported by media and IT technologies.Corporate Social Responsibility principles, as well as the quality of reading in their web sites and one-year reports, the primary(prenominal) sources of knowledge active the party for potential investors, counterparties and local communities. In the near future, we should also expect that as a result of the globalisation of monetary markets, rarify listed companies will meet investors that are more aware of Corporate Social Responsibility and consumers that invest and co-operate better with companies supporting environmental and social development. The abstract of sentience rates and get ahead in implementing the ideal of Corporate Social Responsibility in the sector of Polish companies c everywhereed all joint stock companies listed in the Warsaw Stock Exchange4, excluding listed banks (covered in the analysis of the banking sector) and nat ional investment funds.Results of the study are based on instruction disclosed and presented in web sites and annual reports of the analysed companies and they refer to the following aspects report on Corporate Governance principles adopted by the confederation, including scrutinise rules reporting on the companys environmental policy, reporting on the companys social policy. The study covered possibilities of an access for investors, local communities, potential business partners to the knowledge about the companys financial standing, and strategies in progress. The principles for reporting on Corporate Governance were stipulated in the resolution of the Stock Exchange Council of October 16, 2002 (58/952/2002) on best practice in public companies in 2002.Pursuant to this document, companies were obliged to come out and deliver, by July 1, 2003, their first statement confirming their will to observe the newly introduced rules. The study carried out by the lend shows that o ver 90 percent of companies publish their reports on incorporating (adopting) principles of Corporate Governance in their business strategies. However, we have to point out that the quality and availability of the information presented in web sites and in annual reports of companies for potential investors and society is relatively low. 4 The analysis was carried out from August October 2003. 5 The Gdansk Institiute for trade EconomicsAmong the listed companies under the study, just now 40 percent disclose and publish detailed information about the structure of their Corporate Governance, and mostly in web sites, where companies present the information about the composition and structure of their management board (74. 4 %) and the composition and structure of their supervisory board (62. 2 %). Chart 1. 1. 1 Do domestic companies publish detailed information about the structure of their supervisory bodies? 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Board structure Supervisory boa rd structure Responsibilities of board member Definition of independence 25,6% 37,8% 51,7% 87,2% 99,4% 99,4% 74,4% 62,2% 48,3% 12,8% 0,6% Any supervisory board Commities 0,6%Individuals responsible for implementation, management and audit of economic, social and environmental policies YES NO Source Own study based on research carried out by the Gdansk Institute for Market Economics. The Institutes studies on the companies informing about the structure and responsibilities of their main bodies in charge of Corporate Governance also show that domestic listed companies have not appointed persons in charge of implementing and supervising their policy related to Corporate Social Responsibility, yet (only 0. 6%), companies usually do not disclose the information about the existing committees at their supervisory boards.Potential investors and business partners willing to establish co-operation with a given entrepreneur want to know external auditors analysing the companys financial sta tements and know whether they are reliable. 6 The Gdansk Institiute for Market Economics The Institutes study shows that 88 percent of domestic public companies presents information related to their audit policy in their web sites. The companies usually give procedures for selecting external auditors, principles for rotation (changes) of external auditors and point out that external auditors are unconditional of the company. Nevertheless, in Poland, companies still do not present statements on audit costs and costs of other services performed by auditors.The Institutes analysis also shows that most listed companies under the study (86. %) have undertaken to respect such shareholders rights specified in the Best Practice like right to express their sagacity and make motions to the companys management board right to see minutes and reports from previous meetings (usually available to the shareholders at the companys office) publishing information on future General Shareholders Me etings and their agenda. Chart 1. 1. 2 Do domestic companies publish information about audit, shareholders rights, implemented principles of their regulation of demarcation do / reckon of Ethics? 100% 90% 80% 70% 60% 12,8% 13,3% 98,9% 50% 40% 30% 20% 10% 87,2% 86,7% 1,1% 0% Does the Company disclose audit related Does the company disclose its policy on information? shareholder rights? Does the company disclose and report on its internal formula of Business Conduct/ Code of Ethics? YES NO Source Own study based on research carried out by the Gdansk Institute for Market Economics.Assessing the awareness and progress in implementing the concept of Corporate Social Responsibility by Polish listed companies, it is worth underlining that still a small percentage of companies has developed and adopted the Code of Ethics and the Code of Business Conduct, 7 The Gdansk Institiute for Market Economics where the companies define, for example, principles for social, environmental policy, is sues related to the protection of human rights, employment policy. The managements have to guarantee that the Code of Business Conduct is effectively implemented, monitored and improved. Therefore, the European Commission promotes companies which adopt and implement the Codes of Business Conduct prepared by international corporations.In the opinion of the European Commission, the Code of Business Conduct should 5 Be based on guidelines of the Convention of the International Labour Organisation, defined in the Declaration on Fundamental Principles and Rights at Work from 1998 and OECDs guidelines for international companies related to social partners and their stakeholders Incorporate mechanisms required to assess and verify the Code implemented Involve social partners and other groups of stakeholders influencing the companys operations in the dialog about the shape of the Code Expand the experience related to best practice in European companies. The concept of Corporate Social R esponsibility also assumes that the company should purposefully get involved in environmental protection. The study shows that domestic listed companies do not gamble it purposeful to present information about actions taken to protect t e natural environment. On the one hand, it h results from the fact that the companies are not aware of potential benefits they could obtain, according to the assumptions of Corporate Social Responsibility, for example if their environmental actions are positively perceived by their stakeholders.The research carried out by the Market and Opinion Research International (MORI) under the CSR Europe campaign on the sample of 12 thousand citizens representing 12 countries shows that around 70 percent of consumers acquire a product or a service take into account the level which a given producer is involved in social and environmental activity to. At the same time, every fifth consumer is ready to pay more for goods produced by a socially responsible compa ny. On the other hand, the lose of information about environmental actions taken by the companies results from relatively low financial expenses borne by these companies for environmental purposes.