Cororale SociaI ResonsibiIily (CSR) is associaled vilh lhe conducl of cororalions and in

arlicuIar vhelher cororalions ove a duly lo slakehoIders olher lhan sharehoIders.

There are a number of faclors reIevanl lo lhe currenl CSR debale, incIuding:
! gIobaIisalion and lhe roIiferalion of cross-border lrade by MNIs resuIling in an increasing
avareness of CSR raclices reIaling lo areas such as human righls, environmenlaI roleclion,
heaIlh and safely and anli-corrulion,
! organisalions, such as lhe UN, lhe Organisalion for Iconomic Co-oeralion and DeveIomenl
(OICD) and lhe InlernalionaI Labour Organisalion (ILO), have deveIoed comacls, decIaralions,
guideIines, rinciIes and olher inslrumenls lhal oulIine norms for accelabIe cororale conducl,
! access lo informalion and media enabIes lhe ubIic lo be more informed and lo easiIy monilor
cororale aclivilies,
! consumers and inveslors are demonslraling increased inleresl in suorling resonsibIe
business raclices and are demanding more informalion as lo hov comanies address risks and
oorlunilies reIaling lo sociaI and environmenlaI issues,
! recenl high rofiIe cororale coIIases have conlribuled lo ubIic mislrusl and lhe demand for
imroved cororale governance, accounlabiIily and lransarency,
! commonaIily of execlalions by cilizens of various counlries vilh regard lo minimum
slandards cororalions shouId achieve in reIalion lo sociaI and environmenlaI issues, regardIess of
lhe |urisdiclion in vhich lhe cororalion oerales, and
! increasing avareness of lhe inadequacy of currenl reguIalions and IegisIalion vilh regard lo
CSR mallers and lhe reguIalion of MNIs.1


The commilmenl of business lo conlribule lo suslainabIe economic deveIomenl, vorking vilh
emIoyees, lheir famiIies, lhe IocaI communily and sociely al Iarge lo imrove lheir quaIily of Iife'
(WorId usiness CounciI on SuslainabIe DeveIomenl).
! 'Oeraling a business in a manner lhal meels or exceeds lhe elhicaI, IegaI, commerciaI and
ubIic execlalions lhal sociely has of business' (usiness for SociaI ResonsibiIily).
! 'A sel of managemenl raclices lhal ensure lhe comany minimises lhe negalive imacls of ils
oeralions on sociely vhiIe maximising ils osilive imacls' (Canadian Cenlre for IhiIanlhroy).
! 'The inlegralion of business oeralions and vaIues vhereby lhe inleresls of aII slakehoIders
incIuding cuslomers, emIoyees, inveslors, and lhe environmenl are refIecled in lhe comany's
oIicies and aclions' (The Cororale SociaI ResonsibiIily Nevsvire Service).


Cororale hislory rovides many examIes of comany's ursing rofil vilhoul regard lo
reIevanl CSR mallers, incIuding:
! Nike faclories in Asia vere crilicised for exlremeIy oor vorking condilions and for
emIoying young chiIdren,11
! NeslIe received crilicism in reIalion lo ils' raclices incIuding unelhicaI markeling and uliIising
a suIy chain lhal uses chiId bonded Iabour,
! }ames Hardie has been crilicised regarding ils faiIure lo rovide adequale comensalion lo
eoIe affecled by asbeslos reIaled diseases resuIling from lhe comany's buiIding roducls,
! Iord Iinlo scandaI vhereby Iord, aIlhough avare of a falaI design fIav, decided il vouId be
cheaer lo ay off ossibIe Iav suils vilh regard lo resuIling dealhs inslead of recaIIing and fixing
lhe affecled cars,12
! SheII's |oinl venlure vilh lhe Nigerian governmenl vhere, in 1995, Ken Saro-Wiva and eighl
olhers vere execuled IargeIy due lo Ieading a non-vioIenl camaign againsl environmenlaI
damage associaled vilh lhe oeralions of muIlinalionaI oiI comanies, incIuding SheII and rilish
IelroIeum. SheII vas crilicised for nol using ils over lo inlercede vilh regard lo lhe execulions.13,
and,
! Inron maniuIaled eIeclricily in order lo maximise rofils al lhe exense of CaIifornian
cilizens.


!!"#$%#%&'()#
The UN Norms on lhe ResonsibiIilies of TransnalionaI Cororalions and olher usiness
Inlerrises vilh regard lo Human Righls (UN Norms) allemls lo eslabIish a comrehensive IegaI
framevork for lhe human righls resonsibiIilies of comanies. The Norms vhich endeavour lo
slandardise exisling slandards are based soIeIy on exisling inlernalionaI Iav regarding human
righls and Iabour slandards and deaI vilh issues such as vorkers righls, corrulion, securily and
environmenlaI suslainabiIily


!!!"#*'!+,!-./)#0&'#1/)-&+)!2./#3+4/)5(/+5#
The IrinciIes for ResonsibIe Inveslmenl (IRI), issued in AriI 2006, is a voIunlary inilialive
vhich slrives lo idenlify and acl on lhe common ground belveen lhe goaIs of inslilulionaI
inveslors and lhe suslainabIe deveIomenl ob|eclives of lhe UN. The audience largeled is lhe
gIobaI communily, hovever lhe focus is on lhe eIeven Iargesl cailaI markels, vilh a goaI of
rolecling lhe Iong lerm inleresls of fund beneficiaries39.


GIobaIisalion and lhe significanl grovlh and infIuence of lhe rivale seclor have highIighled
issues such as CSR and lhe reguIalion of MNIs. WhiIsl considerabIe rogress has been made in
hoIding comanies accounlabIe for lheir environmenlaI erformance, rogress on sociaI issues
such as human righls, corrulion, cororale lransarency and Iabour slandards has been more
Iimiled. AIlhough lhere have been allemls lo viden lhe scoe of slakehoIders direclors may
consider, for mosl comanies CSR consisls of voIunlary inilialives designed lo enhance lhe sociaI
imacl of lheir raclices, vilh some of lhese inilialives acliveIy romoled by governmenl. Many
cororalions have incororaled CSR inlo lheir codes of conducl, soughl lo vork cIoseIy vilh
NGOs in formuIaling cororale oIicy in undeveIoed counlries, subscribed lo lhe UN GIobaI
Comacl and olher UN inilialives, and have incororaled GRI guideIines inlo lheir financiaI
reorling. Hovever desile lhese inilialives, lhere sliII remains a ga erlaining lo IegaI
accounlabiIily reIaling lo CSR raclices, arlicuIarIy in reIalion lo MNI oeralions in |urisdiclions
oulside lheir home slale.



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6%701$1".89%)01#$(*%-."&$)0$+6'10:"$(01'01%)"$.0:"1-%-(";$01$5*")*"1$
+6'10:"/$&)%-/%1/&$02$(01'01%)"$.0:"1-%-("$(089/$,"$%(*+":"/$)*108.*$
%/0')+0-$02$'1+-(+'9"<,%&"/$&)%-/%1/&$02$(0-/8()4$
$
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=00/$(01'01%)"$.0:"1-%-("$+&$(*%1%()"1+>"/$,#$%$2+16$(066+)6"-)$%-/$%/0')+0-$
02$")*+(%9$'1%()+("&$,#$%-$01.%-+>%)+0-$%(10&&$+)&$"-)+1"$:%98"$(*%+-$%-/$+-$%99$02$
+)&$/"%9+-.&$5+)*$%$5+/"$.108'$02$&)%!"*09/"1&$"-(06'%&&+-.$"6'90#""&;$
(8&)06"1&;$:"-/01&;$1".89%)01&$%-/$&*%1"*09/"1&$?+-(98/+-.$)*"$6+-01+)#$
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'1%()+("&$-""/$)0$,"$5*09"<*"%1)"/9#$"6,1%("/4$
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$
Clause 49 of the listing agreement with stock exchanges provides the code of corporate governance
prescribed by SEBI for listed Indian companies. With the introduction of clause 49, compliance with its
requirements is mandatory for such companies.

In comparison with developed countries that impose stringent penal and criminal consequences for poor
corporate governance, penalty levels in India are considered to be inadequate to enforce good
governance.
71 percent of the respondents considered penalty levels to discipline poor and unethical governance to
be low. 22 percent of the respondents were either undecided or did not know if the penalty levels are
low.

Various factors pose challenges to effective corporate governance
in India
We asked the respondents about the bigger risks to corporate governance in India and key reasons for
corporate failures in the West. 35 percent considered weak oversight and monitoring as the biggest risk
to corporate governance. This is lower in comparison to 55 percent of the respondents who participated
in our p
oll and considered this factor to be the single biggest reason for corporate failures in the West.

Corporate governance is about owners and the managers
operating as the trustees on behalf of every shareholderlarge or
small.

Corporate governance indicates the policies and procedures applied by firms to attain
certain sets of objectives, corporate missions and visions with regard to stockholders,
employees, customers, suppliers and different regulatory agencies and the community
at large. The role of governance is to maximize shareholder's wealth. Corporate
governance depends on managerial performance as well as a consideration of social
responsibility, the socio- cultural-environmental dimension of business procedure,
legal and ethical practices with a focus on customers and other stakeholders of an
organization. Corporate governance is gaining importance among policy makers,
entrepreneurs, business personnel, stakeholders and related organizations.

Corporate governance and corporate social responsibility are interrelated. One
technique that is being increasingly introduced to measure corporate social
responsibility of firms is Triple-Bottom-Line (TBL) accounting. The triple bottom
line captures an expanded spectrum of values and criteria for measuring
organizational (and societal) success (http://en.wikipedia) and includes information on
social, environmental and sustainability matters


Wartick and Cochran (1985) depicted the evolution of the corporate social
performance model by focusing on three challenges to the concept of corporate social
responsibility: economic responsibility, public responsibility, and social
responsiveness. They also observed social issues governance as a dimension of
corporate social performance. The corporate social performance model is valuable as
it provides the beginnings of a paradigm for the field. It is of interest in our study to
identify whether corporate social responsibility disclosures made in the Bangladesh
banking sector focus on economic responsibility, public responsibility or social
responsiveness. Further research of a similar nature might be able to pinpoint where
Bangladesh lies in terms of Cochranes evolutionary model

that in order to achieve high standards of corporate governance, internal pressures
such as peers and market competition should be more effective than enforcement by
regulating agencies.

Corporate governance is a number of processes, customs, policies, laws, and
institutions which have impact on the way a company is controlled.
[1][2]
An important theme
of corporate governance is the nature and extent of accountability of people in the business,
and mechanisms that try to decrease the principal-agent problem


here has been renewed interest in the corporate governance practices of modern
corporations since 2001, particularly due to the high-profile collapses of a number of large
corporations, most of which involved accounting fraud. Corporate scandals of various forms
have maintained public and political interest in the regulation of corporate governance. In the
U.S., these include Enron Corporation and MCI Inc. (formerly WorldCom). Their demise is
associated with the U.S. federal government passing the Sarbanes-Oxley Act in 2002,
intending to restore public confidence in corporate governance. Comparable failures in
Australia (HIH, One.Tel) are associated with the eventual passage of the CLERP 9 reforms.
Similar corporate failures in other countries stimulated increased regulatory interest
(e.g., Parmalat in Italy).


Contemporary discussions of corporate governance tend to refer to principles raised in three documents
released since 1990: The Cadbury Report (UK, 1992), the Principals of Corporate Governance (OECD,
1998 and 2004), the Sarbanes-Oxley Act of 2002 (US, 2002). The Cadbury and OECD reports present
general principals around which businesses are expected to operate to assure proper governance. The
Sarbanes-Oxley Act, informally referred to as Sarbox or Sox, is an attempt by the federal government
in the United States to legislate several of the principles recommended in the Cadbury and OECD
reports.
! Rights and equitable treatment of shareholders:
[7][8][9]
Organizations should respect the rights of
shareholders and help shareholders to exercise those rights. They can help shareholders exercise
their rights by openly and effectively communicating information and by encouraging shareholders
to participate in general meetings.
! Interests of other stakeholders:
[10]
Organizations should recognize that they have legal,
contractual, social, and market driven obligations to non-shareholder stakeholders, including
employees, investors, creditors, suppliers, local communities, customers, and policy makers.
! Role and responsibilities of the board:
[11][12]
The board needs sufficient relevant skills and
understanding to review and challenge management performance. It also needs adequate size and
appropriate levels of independence and commitment to fulfill its responsibilities and duties.
! Integrity and ethical behavior:
[13][14]
Integrity should be a fundamental requirement in choosing
corporate officers and board members. Organizations should develop a code of conduct for their
directors and executives that promotes ethical and responsible decision making.
! Disclosure and transparency:
[15][16]
Organizations should clarify and make publicly known the
roles and responsibilities of board and management to provide stakeholders with a level of
accountability. They should also implement procedures to independently verify and safeguard the
integrity of the company's financial reporting. Disclosure of material matters concerning the
organization should be timely and balanced to ensure that all investors have access to clear, factual
information.
India
India's SEBI Committee on Corporate Governance defines corporate governance as the
"acceptance by management of the inalienable rights of shareholders as the true owners of
the corporation and of their own role as trustees on behalf of the shareholders. It is about
commitment to values, about ethical business conduct and about making a distinction
between personal & corporate funds in the management of a company."
[19]
It has been
suggested that the Indian approach is drawn from the Gandhian principle of trusteeship and
the Directive Principles of the Indian Constitution, but this conceptualization of corporate
objectives is also prevalent in Anglo-American and most other jurisdictions.