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Corporate Social Responsibility

Corporate Social Responsibility. Team Members: Bimal Daga Dharendra Rayamajhi Gopi K. Khanal Govinda Gyawali Sandip Timsina Sushant Limbu. How is CSR defined?. Is a form of corporate self-regulation integrated into a business model.

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Corporate Social Responsibility

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  1. Corporate Social Responsibility • Team Members: • Bimal Daga • Dharendra Rayamajhi • Gopi K. Khanal • Govinda Gyawali • Sandip Timsina • Sushant Limbu

  2. How is CSR defined? Is a form of corporate self-regulation integrated into a business model. Also known as corporate responsibility, corporate citizenship, responsible business, sustainable responsible business (SRB), or corporate social performance No formal act of legislation in Nepal.

  3. But what is CSR? But what is CSR? • Self-regulating mechanism whereby business would monitor and ensure their adherence to law, ethical standards, and international norms. • Common approach of CSR is through the giving of aid to local organizations / communities • Realizing responsibility for the impact of their activities on the environment, consumers, employees, communities, stakeholders and all other members of the public sphere.

  4. But what is CSR? (contd..) • Proactive promotion of public interest by encouraging community growth and development, and voluntarily eliminating practices that harm the public sphere, regardless of legality. • It is the deliberate inclusion of public interest into corporate decision-making, and the honoring of a triple bottom line: People, Planet, Profit. • Achieving multiple benefits `by operating with a perspective broader and longer than their own immediate, short-term profits.

  5. But what is CSR? (contd..) • Believed to be a watchdog on behalf of government over powerful multinational corporations • It is Social accounting • Covered by annual reports of companies covering Sustainable Development

  6. Potential business benefits from CSR • CSR can significantly improve long-term corporate profitability • Businesses may not be looking at short-run financial returns when developing their CSR strategy.

  7. Potential business benefits from CSR: • CSR within a company will likely rest on one or more of these arguments: • Human resources • National Sovereignty and local communities • Labor • Consumer Protection • Environmental Aspect • Economic CSR Aspect

  8. CSR in Nepal • Weak capital market • Family run business • No distinction between principal and agent • Lack of corporate governance • Carteling and exploitation

  9. CSR in Nepal • ChaudharyGroup • Touching life everyday initiative • Norvic Hospital’s Mega camp • CG Scholarship • DaburNepal • Agroforestry • Bee-keeping

  10. CSR in Nepal • Surya Nepal • Surya Nepal Prakriti • Surya Nepal Aasha • Surya Nepal Suswastha • Surya Nepal KhelParyatan • NIC Bank • Community Programs • Banking on Youth

  11. Legal Provision • CSR is not legally enforceable in Nepal • More than CSR, Company Act 2063 highlights on the roles of board of director.

  12. Legal Provision • Section 60(1): Directors are held responsible for the loss of net worth of the company. • Chapter 5 of Company’s act 2063 has guidelines to conduct the meetings of the company which directs a company to hold a) Annual general meeting and b) Extra-ordinary general meeting

  13. Legal Provision • Section (1) has a provision to fix the receivable by the directors for attending a meeting, their monthly remuneration, daily allowance and traveling allowance or other facility shall be as determined by the general meeting. • Section 92(1)(a) requires directors to disclose if he or his close relative has direct involvement or any kind of personal interest in any kind of sale and purchase or other kind of contract related with the transaction of the company.

  14. Legal Provision • Section 95 of Company Act-2063 speaks on the powers and duties of board of directors. • Section 99 has guidelines on the responsibilities and duties of the directors. It clarifies that no director of a company shall do anything to derive personal benefit through company or in the course of conducting business of the company.

  15. Legal Provision • Section 105 puts restrictions on the authority of directors and it restricts directors of a company receiving loans from selling, donating, giving gifts or otherwise disposing of more than seventy percent of one or more undertakings being operated by it. • Chapter 7 and 8 has guidelines to maintain books of account, appointment of auditor.

  16. Legal Cases • Shatrughan Prasad Gupta Vs. Everest Paper Mills Pvt. Ltd • The sewage chemicals that are directly drained to Babahi River without any treatment led to the pollution of the nearby villages. Due to the toxic nature of the wastes, there has been adverse effect on the people living in those village, animals, birds and the cultivable land. • Verdict • The company would be allowed to operate only after it meets the prescribed standards either by implanting the refinement machinery and the installation and implementation will be monitored by a committee of specialists. Only after the recommendation of the specialist committee the company shall be allowed to work.

  17. Legal Cases • Surya Pd. Dhungel Vs. Godawari Marble Industries Pvt. Ltd. The plaintiff filed that the defendant were posing serious environmental threat in the historical area located at GodawariAdharsha Village Development Committee and around 15 square meter of its periphery. It further stated the activities of the defendant also posed threat to the life and property of the people living in the area, the company also restricted the investigation to be carried out by the plaintiff which caused him personal inconvenience.

  18. Legal Cases • Verdict • The court held that the license granted to the company was ambiguous. It allowed the company to carry detonation activities but it did not clarify how frequently the detonation could be carried out neither did it specify the maximum strength of the detonation.

  19. CSR Criticisms • Distracts businesses from fundamental economic role. Perhaps! is a hindrance to free trade • Nothing more than superficial window-dressing • Annual reports of companies portraying CSR activities considered mere lip service • Companies acting on social matters may be showing element of insincerity and hypocrisy.

  20. CSR Criticisms • CSR programs may be undertaken by companies to distract the public from ethical questions posed by their core operations (eg. British American Tobacco (BAT), the petroleum giant BP). • Companies claim to promote CSR and be committed to Sustainable Development BUT simultaneously engaging in harmful business practices. • Critics suggest that better governmental and international regulation and enforcement, rather than voluntary measures

  21. THANK-YOU

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