Corporate Social Responsibility in India Essay Example for Free

Corporate genial Responsibility in India EssayThe basic principle of the sustainable development and Corporate Social Responsibility is the combining of needs important both(prenominal) from the point of view of an institution, as well as a group of entities operating in its environment (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 integrating economic, cordial and environmental operations.There are many factors that make us interested in Corporate Social Responsibility 2 New problems and expectations of citizens, customers, public 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 c onsumers as well as investors Bigger and bigger care for damages caused to natural environment by business activities Transparency of business activities support by media and IT technologies. Corporate Social Responsibility principles, as well as the quality of knowledge in their web sites and annual reports, the main sources of knowledge just virtually the federation for probable investors, counterparties and local communities. In the near afterlife, we should also expect that as a result of the globalisation of financial markets, Polish listed companies will gratify 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 analysis of awareness rates and improvement in implementing the innovation of Corporate Social Responsibility in the sector of Polish companies covered all joint stock companies listed in the Warsaw stockpile Exchange4, excludi ng listed banks (covered in the analysis of the banking sector) and national investment funds.Results of the study are based on information disclosed and modeled in web sites and annual reports of the analysed companies and they refer to the hobby aspects account on Corporate Governance principles adopted by the lodge, including inspect 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 information 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 obligate to publish and deliver, by July 1, 2003, their first statement confirming their will to observe the newly introdu ced rules. The study carried out by the Institute shows that over 90 share 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 Market EconomicsAmong the listed companies under the study, only 40 pct 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? speed of light% 90% 8 0% 70% 60% 50% 40% 30% 20% 10% 0% progress structure Supervisory board 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, oversight 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 lively committees at their supervisory boards.Potential investors and business partners willing to establish co-operation with a given entrepreneur w ant to know external auditors analysing the companys financial statements 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 independent of the company. Nevertheless, in Poland, companies remedy 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 opinion 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 of fice) publishing information on future General Shareholders Meetings and their agenda. Chart 1. 1. 2 Do domestic companies publish information about audit, shareholders rights, implemented principles of their label of Business take / Code of morality? 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 Code 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 exam ple, principles for social, environmental policy, issues related to the protection of human rights, employment policy. The managements have to guarantee that the Code of Business Conduct is efficaciously 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 i n European companies. The concept of Corporate Social Responsibility also assumes that the company should purposefully get involved in environmental protection. The study shows that domestic listed companies do not find 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 inquiry International (MORI) under the CSR Europe campaign on the sample of 12 thousand citizens representing 12 countries shows that around 70 percent of consumers buying a crossway 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 mor e for goods produced by a socially responsible company. On the other hand, the lack of information about environmental actions taken by the companies results from relatively low financial expenses borne by these companies for environmental purposes.