Proceedings of the 20th International Academic Conference, Madrid

MAKING CORPORATE SOCIAL RESPONSIBILITY MANDATORY: JOB DONE OR UNDONE

SANJANA ROY, DEERGHA AIREN

Abstract:

The evolution of concept of social responsibility of business has passed through different stages of struggle. Corporate Social Responsibility (CSR) is the process by which the corporation participates in the welfare activities of both internal as well as external community by actively assisting in the improvement in the quality of life of the people in the community in which it operates. Corporates can create social value as much as business value for themselves and the two should always preferably go together. Some companies like British Petroleum, Apple, Wal-Mart, Tata and Birla though appear as the real pioneers of CSR, but this paper delves into the reality of how these companies try to use CSR as a tool to cloak their irresponsibility. The Ministry of Corporate Affairs in India deserves a high mention in this regard, as India became the first country in the world to make CSR mandatory for companies crossing a particular threshold as per its laws. Section 135 of the Indian Companies Act, 2013 has been enforced even after staunch opposition from the corporate sector and remains a watershed achievement for the Indian government. Though many companies have already started flouting the new rules, the government has not risen up to the situation. This paper proposes some reforms by which the new rules could be properly enforced, and the companies can be made aware that by promoting CSR they are giving their due back to the society.

Keywords: Corporate social responsibility, internal and external stakeholder, networth of a company

DOI: 10.20472/IAC.2015.020.084

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