CSR panel strength: the more the merrier

Bengaluru: Companies are looking at corporate social responsibility (CSR) as more than just a compliance exercise; the first signs of an attitudinal change are visible with their boards attempting to take CSR beyond the mandate stipulated by the government.
The CSR Rules 2014, framed under the Companies Act 2013,
require companies with a net worth of Rs.500 crore or revenue of Rs.1,000 crore or net profit of Rs.5 crore to spend 2% of their average profit in the last three years on social development-related activities. The ministry of corporate affairs (MCA) also laid down clear rules and responsibilities on how firms and their boards should handle their CSR affairs. 
The rules said every company should constitute a CSR committee with at least three members, one of whom has to be an independent director. These members are responsible for approving the CSR policy, making sure the activities are aligned with Schedule VII (list of CSR activities under the Rules that companies can pursue) and put in place a transparent monitoring mechanism for the implementation of projects. 
In fiscal 2016, the second year of mandated CSR, experts found that these CSR committees had gone a step beyond what is required of them. 
Castrol Ltd, Ambuja Cements Ltd, Mahindra and Mahindra Ltd and HDFC Bank Ltd are some of those companies going beyond what is stipulated and laying the ground for best practices. 
One of the things that these companies have done is to go beyond the mandated number of CSR committee members and brought in more members, that too independent directors. 
Castrol, and Mahindra and Mahindra each have five CSR committee members, three of whom are independent directors.

  • news link: http://www.livemint.com/Companies/OHcuAlTOscV5rnzc7ldE8K/CSR-panel-strength-the-more-the-merrier.html

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