2. INTRODUCTION:
Corporate Governance is concerned with holding the balance between
economic and social goals and between individual and communal goals. The
corporate governance framework is there to encourage the efficient use of
resources and equally to require accountability for the stewardship of those
resources. The aim is to align as nearly as possible the interests of individuals,
corporations and society
Corporate social responsibility is concerned with treating the stakeholders of
the firm ethically or in a socially responsible manner. Stakeholders exist both
within a firm and outside. Consequently, behaving socially responsibly will
increase the human development of stakeholders both within and outside the
corporation.
6. There is no universally accepted definition of the word “CSR”, the meaning and
definition of CSR depends upon on mainly two factors; Firstly, context in which it
is used and secondly, stakeholder. The difficulties in defining precisely CSR are in
part reflective of the way in which this topic has developed and the context of its
use. For some, it has grown out of corporate philanthropy with a clear emphasis
on social improvements or strategic investment keeping in view long term goals.
For others, CSR has a much broader definition and is closely related to the
sustainable development and environment issues
7. Relationship between
Corporate Governance and CSR
CSR is gradually getting fused into companies’ Corporate Governance
practices.
Both Corporate Governance and CSR focus on the ethical practices in the
business and the responsiveness of an organization to its stakeholders and the
environment in which it operates.
Corporate Governance and CSR results into better image of an organization
and directly affects the performance of an organization.
CSR is based on the concept of self governance which is related to external
legal and regulatory mechanism, whereas Corporate Governance is a widest
control mechanism within which a company takes it management decisions.
8. Contradiction between CG & CSR
CG is related to profit maximization and protection who have provided capital
to firm
CSR apparently in contrast of profit maximization because it suggest a set of
actions beneficial for external stake holder and may not be good for share
holder
Managers hired focused to maximize the value of firm, would behave
unethically by being socially responsible
They may raise external stakeholder value at the expense of shareholders
wealth maximization
9. Top Ten companies in India’s CSR rankings
Tata Consultancy Services
ITC Ltd
Infosys Technologies
Larsen and Toubro
Reliance Industries
Oil and Natural Gas Corporation
Indian Oil Corporation
Bharti Airtel
Steel Authority of India Ltd
NMDC Ltd.
10. Top Ten Companies‘ in CG in India
Colgate-Palmolive (India) Ltd.
Crisil Ltd.
Gateway Distriparks Ltd.
Glenmark Pharmaceuticals Ltd.
Graphite India Ltd.
H C L Technologies Ltd.
H D F C Bank Ltd.
Hindustan Unilever Ltd.
Infosys Technologies Ltd.
Piramal Healthcare Ltd.
Punjab Tractors Ltd.
South Indian Bank Ltd.
Tata Steel Ltd
Hexaware Technologies Ltd.
11.
12. CONCLUSION
The relationship between CG & CSR are best interpreted by abandoning the
standard view of the firm as a shareholder value maximizer and embracing the
view of a firm as a stake holder maximizer.
Social and ethically responsible firms are often viewed as the most respected and
profitable firms.
CG & CSR are a strong compliments to each other.
The positive relation between CG & CSR on one hand and the market value of the
firm on the other hand suggest that market is somehow able to detect the
corporations which are beyond the traditional bottom line and towards an
extended bottom line.
