Authors: Vidushi Sanganeria, Utkarsh Sharma
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Corporate Social Responsibility (CSR) has emerged as a significant aspect of corporate behavior globally, driven by ethical concerns, stakeholder expectations, and regulatory mandates. In India, the integration of CSR into corporate governance practices has garnered increasing attention in recent years. This abstract provides an overview of the examination of CSR in India within the framework of corporate governance. This study aims to explore the intricate relationship between CSR and corporate governance in the Indian context. It delves into the evolving landscape of CSR in India, particularly since the enactment of the Companies Act, 2013, which made it mandatory for certain qualifying companies to allocate a portion of their profits towards CSR activities. The analysis encompasses a review of legislative developments, the evolution of CSR reporting, and the role of stakeholders in shaping CSR strategies.
Background and Context of CSR in India:
The concept of Corporate Social Responsibility (CSR) in India has evolved over several decades and has undergone significant transformations in recent years. Here's a brief overview of the background and context of CSR in India:
II. SIGNIFICANCE OF CSR IN CORPORATE GOVERNANCE
Corporate Social Responsibility plays a crucial role in the context of corporate governance in India and offers several significant benefits:
In conclusion, CSR in India has evolved from a tradition of philanthropy to a more structured and regulated practice, with a significant impact on corporate governance. The integration of CSR into corporate governance frameworks not only aligns with legal requirements but also enhances a company's ethical and sustainable business practices, contributing to the well-being of society and the long-term success of the business.
III. CORPORATE SOCIAL RESPONSIBILITY
Evolution of CSR in India:
IV. CORPORATE GOVERNANCE: PRINCIPLES AND PRACTICES
Corporate governance in India follows several key principles and practices:
V. THE INTERPLAY BETWEEN CSR AND CORPORATE GOVERNANCE
The interplay between CSR and corporate governance in India is significant:
In summary, the evolution of CSR in India, principles of corporate governance, and their interplay have been subjects of extensive research, contributing to a better understanding of how businesses can integrate responsible practices into their governance structures to create value for both shareholders and society.
CSR is the strategy that applies to survey an association's effect on society and assessing their obligations. It begins with an appraisal of the accompanying parts of every business:
The best CSR plans would guarantee that while the associations consent to the regulation, their ventures that additionally regard the development and improvement of the underestimated networks and the climate. CSR should likewise be maintainable - including exercises that an association can maintain without adversely influencing their business objectives.
VII. CORPORATE SOCIAL RESPONSIBILITY IN INDIA
Corporate Social Responsibility (CSR) activities and trends in India have evolved significantly over the years, driven by regulatory changes, increased awareness, and a growing sense of corporate responsibility. Here is an overview of CSR activities and trends in India, along with the relevant regulatory framework:
A. Regulatory Framework
Companies Act, 2013: The Companies Act, 2013, introduced mandatory CSR provisions for certain qualifying companies. Under Section 135 of the Act, companies meeting specified criteria are required to spend at least 2% of their average net profit over the previous three financial years on CSR activities.
CSR Rules, 2014: The Ministry of Corporate Affairs (MCA) released the CSR Rules in 2014, providing detailed guidelines on CSR implementation, reporting, and disclosure. It also outlined eligible CSR activities.
SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015: SEBI, the Securities and Exchange Board of India, mandates that listed companies must provide information about their CSR activities in their annual reports. This aligns with the Companies Act requirements.
National CSR Portal: The MCA launched the National CSR Portal, an online platform for companies to register and report their CSR activities. It enhances transparency and monitoring.
VIII. CORPORATE GOVERNANCE AND CSR
Corporate governance plays a crucial role in promoting Corporate Social Responsibility (CSR) within organizations. Here's a breakdown of how corporate governance influences and interacts with CSR in various aspects:
A. Role of Corporate Governance in Promoting CSR
B. Board Composition and CSR:
C. Transparency and Disclosure in CSR Reporting:
In summary, corporate governance plays a critical role in fostering CSR by setting ethical standards, ensuring accountability, aligning CSR with strategic objectives, and promoting transparency and stakeholder engagement. It also has a role in shaping board composition and executive compensation structures to drive CSR performance. Effective corporate governance can help organizations integrate CSR into their core business practices and create a positive societal impact.
IX. ANALYSIS AND FINDINGS
A. Comparison of CSR Practices Among Different Industries in India
B. Relationship Between Corporate Governance Measures and CSR Performance:
3. Executive Compensation: Some studies indicate a positive relationship between executive compensation linked to CSR performance metrics and improved CSR outcomes. When executive pay is tied to CSR goals, there is a stronger incentive to achieve them.
4. Disclosure and Transparency: Companies with transparent CSR reporting practices tend to have better CSR performance. Investors and stakeholders often use transparency as an indicator of commitment to CSR.
C. Identification of Key Drivers and Barriers to CSR Implementation:
Keep in mind that the specific drivers and barriers can vary among industries and companies. Empirical research can provide more context-specific insights into these factors based on the latest data and trends.
X. LIMITATIONS OF THE STUDY AND AREAS FOR FUTURE RESEARCH
Research on CSR has been reprimanded for both an absence of hypothetical establishments (Wang et al., 2020) and inadequate commonsense effect (Barnett et al., 2020). Notwithstanding the gigantic development of CSR research, we actually question the worth of the field and study its quickness for administrative and hierarchical practices. The "endless" corporate interest concerning time and cash in CSR drives regardless (Davidson et al., 2019), firms actually battle to decide how, where and when to give their social and natural endeavors (Wang et al., 2020). Quantitative CSR specialists ought to push toward more clever hypothetical turn of events, more grounded logical thoroughness, and more extensive applied knowledge as opposed to filling holes in the writing and refining scientific techniques.
In conclusion, Corporate Social Responsibility (CSR) is a critical aspect of modern business practices in India and around the world. The regulatory framework established by the Companies Act, 2013, along with guidelines from regulatory bodies like SEBI, has played a pivotal role in shaping CSR initiatives in India. These regulations have made it mandatory for qualifying companies to allocate a portion of their profits towards socially responsible activities, thereby fostering a culture of corporate citizenship and sustainability. CSR practices in India vary across different industries, with companies tailoring their initiatives to address specific societal needs and align with their business goals. Key sectors such as Information Technology, Pharmaceuticals, Manufacturing, Financial Services, Energy, and Telecommunications have distinct CSR priorities and areas of focus. Corporate governance plays a vital role in promoting CSR within organizations. Boards of directors, with diverse expertise and the establishment of CSR committees, oversee CSR strategies and ensure accountability. Linking executive compensation to CSR performance further incentivizes responsible business practices. Transparency and disclosure are integral to CSR reporting, providing stakeholders with insight into a company\'s social and environmental impact. Materiality assessments, external assurance, and adherence to international standards like the Sustainable Development Goals contribute to robust CSR reporting practices. Stakeholder engagement is paramount to the success of CSR initiatives, as companies collaborate with various stakeholders to identify priorities and ensure that CSR efforts are effective and aligned with societal needs. Key drivers of CSR implementation include regulatory mandates, stakeholder pressure, competitive advantage, and recognition of long-term sustainability benefits. However, barriers such as resource constraints, lack of awareness and expertise, short-term profit focus, and resistance to change can hinder CSR efforts. In today\'s business landscape, CSR is not only a legal requirement but also a strategic imperative. Companies that embrace CSR as an integral part of their operations can enhance their reputation, attract socially conscious investors and customers, and contribute positively to the communities and environment in which they operate. As the CSR landscape continues to evolve, it is essential for organizations to adapt, innovate, and measure their impact to achieve sustainable and responsible growth.
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Copyright © 2023 Vidushi Sanganeria, Utkarsh Sharma. This is an open access article distributed under the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.