Saturday, July 16, 2011

National Voluntary Guidelines on Social, Environmental & Economic Responsibilities of Business (ESG Guidelines)

http://www.mca.gov.in/Ministry/latestnews/National_Voluntary_Guidelines_2011_12jul2011.pdf
Introduction to guidelines
The  Guidelines  presented  herein  are  a  refinement  over  the  Corporate  Social
Responsibility  Voluntary  Guidelines  2009,  released  by  the  Ministry  of  Corporate
Affairs  in  December  2009.  Significant  inputs,  received  from  diverse  stakeholder
groups  across  the  country  have  been  duly  considered,  and  based  on  these  inputs;
appropriate changes have been made in the original draft Guidelines produced by the
Guidelines Drafting Committee. This document therefore represents the consolidated
perspective  of  vital  stakeholders  in  India,  and  accordingly  lays  down  the  basic
requirements  for  businesses  to  function  responsibly,  thereby  ensuring  a  wholesome
and inclusive process of economic growth.

Mandate  and  process: These Guidelines  have  been  developed through  an  extensive
consultative  process  by  a  Guidelines  Drafting  Committee  (GDC)  comprising
competent  and  experienced  professionals  representing  different  stakeholder  groups.
The  GDC was  appointed  by the  Indian  Institute  of Corporate Affairs  (IICA) with  a
clear  brief that the Guidelines  must  provide  a  distinctively  'Indian' approach,  which
will  enable  businesses  to  balance  and  work  through  the  many  unique  requirements
of  our  land.  The  process  that  was  followed  in  developing  these  Guidelines  relied
heavily  upon  developing  a  consensus  on  various  ideas  that  emerged  from  various
stakeholder  groups.  Leading  trade  and industry  chambers,  who  were  represented  in
the  GDC  as  well  as  actively  engaged  in  the  consultative  process,  have  been  key
partners in the development of this consensus.
Applicability: The Guidelines are designed to be used by all businesses
irrespective  of  size,  sector  or  location  and  therefore  touch  on  the  fundamental
aspects  –  the  'spirit'  -  of  an  enterprise.  It  is  expected  that  all  businesses  in  India,
including multi-national  companies that  operate in the  country,  would  consciously
work towards  following the  Guidelines. The  Guidelines  also  provide  a  framework
for  responsible  business  action  for  Indian  MNCs  planning  to  invest  or  already
operating  in  other  parts  of  the  world.  Businesses  are  encouraged  to  move  beyond
the recommended minimum provisions articulated in the document.
For  business  leaders  and  managers  entrusted  with  the  task  of  deploying  the
principles  of  Responsible  Business,  it  is  worthwhile  to  understand  that  business
boundaries  today  extend  well  beyond  the  traditional  walls  of  a  factory  or  an
operating  plant  and  all  the  way  across  the  value  chain.  Businesses  are  therefore
encouraged to ensure that not only do they  follow the Guidelines  for areas directly
within  their  immediate  control  or  within  their  sphere  of  influence,  but  that  they
encourage  and  support their  vendors,  distributors,  partners  and  other  collaborators
across their value chains to follow the Guidelines as well.
The  Guidelines  are  applicable  to  all  such  entities,  and  are  intended  to  be  adopted
by them comprehensively, as they raise the bar in a manner that makes their valuecreating  operations  sustainable.  It  needs  to  be  emphasized  that  all  Principles  are
equally important  and  non-divisible  – this implies that if  a  business  endeavours to
function  responsibly, it would have to adopt each of the nine  (9) principles in their
entirety rather than picking and choosing what might suit them.

CORPORATE SOCIAL RESPONSIBILITY VOLUNTARY GUIDELINES 2009

http://www.mca.gov.in/Ministry/latestnews/CSR_Voluntary_Guidelines_24dec2009.pdf

Fundamental Principle
Core Elements:
Each  business  entity  should  formulate  a  CSR  policy  to  guide  its
strategic planning and provide a roadmap for its CSR initiatives, which
should be an integral part of overall business policy and aligned with its
business goals. The policy should be framed with the participation of
various level executives and should be approved by the Board.
The CSR Policy should normally cover following core elements:
1. Care for all Stakeholders:
The  companies  should  respect  the  interests  of,  and  be  responsive
towards all stakeholders, including shareholders, employees,
customers, suppliers, project affected people, society at large etc. and
create value for all of them. They should develop mechanism to actively
engage with all stakeholders, inform them of inherent risks and mitigate
them where they occur.
2. Ethical functioning:
Their  governance  systems  should  be  underpinned  by  Ethics,
Transparency and Accountability. They should not engage in business
practices that are abusive, unfair, corrupt or anti-competitive.

GUIDELINES
Ministry of Corporate Affairs3. Respect for Workers' Rights and Welfare:
Companies  should  provide  a  workplace  environment  that  is  safe,
hygienic  and  humane  and  which  upholds  the  dignity  of  employees.
They  should  provide  all  employees  with  access  to  training  and
development of necessary skills for career advancement, on an equal
and  non-discriminatory  basis.  They  should  uphold  the  freedom  of
association  and  the  effective  recognition  of  the  right  to  collective
bargaining  of labour,  have  an  effective  grievance  redressal  system,
should  not  employ  child  or  forced  labour  and  provide  and  maintain
equality of opportunities without any discrimination on any grounds in
recruitment and during employment.
4. Respect for Human Rights:
Companies should  respect human  rights for all and avoid complicity
with human rights abuses by them or by third party.
5. Respect for Environment:
Companies  should  take  measures  to  check  and  prevent  pollution;
recycle, manage and reduce waste, should manage natural resources
in a sustainable manner and ensure optimal use of resources like land
and  water,  should  proactively  respond  to  the  challenges  of  climate
change by adopting cleaner production methods, promoting efficient
use of energy and environment friendly technologies.
6. Activities for Social and Inclusive Development:
Depending  upon  their  core  competency  and  business  interest,
companies  should  undertake  activities  for  economic  and  social
development of communities and geographical areas, particularly in the
vicinity of their operations. These could include: education, skill building
for  livelihood  of  people,  health,  cultural  and  social  welfare  etc.,
particularly targeting at disadvantaged sections of society.
Implementation Guidance:
1.  The  CSR  policy  of  the  business  entity  should  provide  for  an
implementation strategy which  should include  identification of
projects/activities, setting measurable physical targets with timeframe,
organizational  mechanism  and  responsibilities,  time  schedules  and
monitoring.  Companies  may  partner  with  local  authorities,  business
associations  and  civil  society/non-government  organizations.  They
may  influence  the  supply  chain  for  CSR  initiative  and  motivate
employees for voluntary effort for social development. They may evolve
a  system  of  need  assessment  and  impact  assessment  while
undertaking CSR activities in a particular area. Independent evaluation
may  also  be  undertaken for  selected  projects/activities from time to
time.
2. Companies should allocate specific amount in their budgets for CSR
activities.  This  amount  may  be  related  to  profits  after  tax,  cost  of
planned CSR activities or any other suitable parameter.
3.  To  share  experiences  and  network  with  other  organizations  the
company  should  engage  with  well  established  and  recognized
programmes/platforms which encourage responsible business
practices and CSR activities. This would help companies to improve on
their CSR strategies and effectively project the image of being socially
responsible.
4.  The  companies  should  disseminate  information  on  CSR  policy,
activities and progress in a structured manner to all their stakeholders
and the public at large through their website, annual reports, and other
communication media.

Wednesday, July 6, 2011

Why Corporate Governance is So Important to China - Eric Jackson - Tech and China - Forbes

Why Corporate Governance is So Important to China - Eric Jackson - Tech and China - Forbes: "Corporate governance has to do with how organizations are run.� Organizations with proper corporate governance have accountability and transparency.� People in authority at those organizations know that their actions will be seen and judged by others.� Therefore, those leaders are more likely to act in ways that benefit the organization’s stakeholders.� They are also less inclined to act in ways that benefit themselves personally at the expense of the organization.

China has always been a country that celebrates hard work and success in business.� To succeed in China, the winning companies face enormous competition domestically to get to the top and stay there.� They are generally not able to be incompetent or corrupt and succeed in the long-term.

But there is a growing crisis in China involving bad corporate governance that needs to be addressed immediately in order to prevent a major economic crisis in the future."

Monday, July 4, 2011

Compact Disc investors disappointed over delisting plan; bank serves recovery notice - Moneylife Personal Finance site and magazine

Compact Disc investors disappointed over delisting plan; bank serves recovery notice - Moneylife Personal Finance site and magazine: "Compact Disc India (CDI) has left its retail investors fuming over its delisting plans. The shareholders are questioning the company's motives, as it has not paid the dividends it announced over the past two years, but it now seems to have the funds to buy back shares.

Interestingly, the company has been restrained from initiating any process of delisting of shares by the Debts Recovery Tribunal-II, Delhi, after its banker, HSBC, filed a suit for recovery. This is again strange, that the company does not have funds to pay its banker, but apparently has money to undertake a share buyback.

The stock reacted negatively to these developments, losing 16% since 6th June till the close of trading on Friday."

Suspended animation of scrips: Investors suffer and errant companies are let off the hook - Moneylife Personal Finance site and magazine

Suspended animation of scrips: Investors suffer and errant companies are let off the hook - Moneylife Personal Finance site and magazine: "After Moneylife wrote earlier about some 1,500 scrips being in suspended animation, even as the Securities and Exchange Board of India (SEBI) is set to tweak the takeover and delisting rules, intermediaries and investors are writing to protest the lack of action.

Suspension of scrips, or delisting them, punishes investors and helps companies who want to ditch their retail shareholders after raising funds from them. Companies merely need to violate the listing rules by refusing to pay the fees or making correct disclosures. Meanwhile, investors are stuck. They continue to pay the annual depository charges and cannot even close the DP account without transferring the shares; re-materialising them involves a further cost on what could be a worthless share."

BSE finds Compact Disc India non- compliant with SEBI Listing Agreement - Moneylife Personal Finance site and magazine

BSE finds Compact Disc India non- compliant with SEBI Listing Agreement - Moneylife Personal Finance site and magazine: "It is reliably learnt that the Bombay Stock Exchange (BSE) has found multimedia and animation company Compact Disc India non-compliant with several provisions of Clause 49 of the SEBI Listing Agreement. It has sought clarification and explanation from the company on this matter.

Apparently, the stock exchange has observed that the company has only a single independent director out of a total of three directors and is thus non-compliant with the requirements under Clause 49 (i) (a) of the Listing Agreement. As per the guidelines, at least 50% of the company’s board should be independent directors.
Further, the company has also failed to constitute its audit committee under clause 49(ii) (a) as per which two-thirds of the members should be independent directors."