Corporate Social responsibility
The Concept of mandatory contribution towards Corporate Social responsibility (CSR) might be very new to us but in India, the concept of ‘Social responsibility‘ very much older. If we talk about social Responsibilities of a person then different religions have their own philosophies and doctrines about social responsibilities in different context. In Hinduism, the concept of “dharma” (governance) includes the responsibility of a person towards the society, similarly in Sikhism the concept of “Vand Chakna” actually means sharing one’s earning with others. In Islam the concept of “Zakat” is a form of obligatory charity, it means to give a part of your earning for the benefit of society. All of these doctrines of different religions have one thing in common that is “to give back to the society, what you have earned”. It is because a person lives in a society, uses the resources of the society for his own benefit and earn his living with the help of society, so it should be the duty of the person to give back a part of his earning to the society.
A corporate is also an artificial person. So, there must be some ethos (guiding beliefs) and duties of a corporate person. A corporate also exist in a society, uses the resources of the society to earn its revenue, so it must be a duty of a corporate of take care of the society in which it exits and to give back a part of its earning for the benefit of the society. Now, the emerging concept of “corporate governance” broadly talks about following the “best set of rules and practices by a corporate while doing their business activities”. Corporate social responsibility is one of the major aspects of a good corporate governance.
The Companies Act, 2013 (“ACT”) formally introduced the legal provisions regarding the “Corporate social responsibility (CSR)” in the year 2014 for facilitating the concept of CSR. The legal provisions of Act read with related rules includes the provisions regarding the applicability of CSR on certain companies, constitution of CSR committee, amount to be contributed toward CSR, activities which are eligible for CSR contribution, provisions regarding Non compliance and other related matters. Since 2014 till 2021, several provisions of CSR have been changed by various amendments in the Act and rules.
Truly speaking, we should not see the “Corporate Social Responsibility” as a legal compulsion but it should be seen as a duty of corporate or more exactly it should be a part of company’s “ethos”. The emerging need of corporate governance will eventually help the corporates to understand the need of Corporate social responsibility.
– Kunal Madhukar
Author Bio
