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Volume. XVIII No. 10/2013 October 2013 India Expected Annual CSR Spending of ` 20,000 Cr ‘Companies must see India's new Company Law 2013, as an investment opportunity to create a better work environment, rather than a forced expenditure', Sachin Pilot, HON'BLE SACHIN PILOT Minister of State for Corporate Affairs 8th International Conference on Corporate Social on 17-18 January 2014, Responsibility at Hotel ITC Windsor Manor, Bengaluru (India) 2% spend would be mandatory for companies with a net worth of more than Rs 500 crore or a turnover of more than 1,000 crore or a net profit of more than Rs 5 crore The amount has to be spent around the areas of operation of the company. Companies to spend Rs.15,000-20,000 crore a year on CSR Profiting from your Business by turning it into a Cause Sachin Pilot Rajashree Birla P- 5 P- 8 Building Now! Tomorrow’s Get Quality Times on our website IOD www.iodonline.com Institute of Directors Boards Golden Peacock Awards® A Strategic tool to Lead the Competition IOD strongly believes that competition brings out the best in all. 2% spend would be Golden Peacock Awards set by it two mandatory for decades back have achieved companies with a “ much affection, admiration and adulation net worth of more from business and industry. than Rs 500 crore Golden Peacock Awards have become the most sought after badge or a turnover of of excellence more than 1,000 crore or a net profit of more than Rs 5 crore ” The amount has to be spent around the areas of operation of the company. Hon’ble Dr. M. Veerappa Moily Union Minister of Petroleum and Natural Gas, Govt. of India addressing the Golden Peacock Awards Nite in Bengaluru. APPLY NOW Golden Peacock Awards, instituted by Institute of Directors in 1991, are now regarded as benchmark of Corporate Excellence worldwide. GOLDEN PEACOCK AWARD Today Golden Peacock Awards Secretariat receives over 1,000 entries per year (both National & Global) for for various awards, from over 25 countries worldwide. The Golden Peacock Awards have been instituted to celebrate and honour the best of best, as recognition of their unique achievements to build a brand. CORPORATE The selection is an elaborate process done by a team of professional independent assessors. The short-listed finalist applicants are then submitted to a Jury of eminent people , known for their independence and impartiality headed by Dr Ola SOCIAL Ullsten, former Prime Minister of Sweden and Justice P. N. Bhagwati former RESPONSIBILITY Chief Justice of India, & GOLDEN PEACOCK AWARD FOR INNOVATION MANAGEMENT LAST DATE for Submission of Application Awards will be presented during the 8th International Conference on Social Responsibility 28th NOVEMBER 2013 on 17-18 January 2014, at Hotel ITC Windsor Manor, Bengaluru (India) Hon'ble P. Chidambaram, Union Finance Minister of India Mrs. Rajashree Birla receiving Golden Peacock Azim H. Premji, Chairman, Wipro Limited receiving the addressing the Golden Peacock Awards Nite in New Delhi Lifetime Achievement Award Golden Peacock Leadership Award Instituted by Details: Golden Peacock Awards Secretariat Building Institute of Directors Tomorrow’s M-52 (Market), Greater Kailash Part - II, New Delhi-110048, India Tel: 011 - 41636717, 41636294, 41008704 • Fax: 41008705 Registered Trademark Registered IOD Institute of Directors Boards Email: [email protected] • www.goldenpeacockawards.com ® FROM THE EDITOR The Government of India is aggressively working towards enactment of Companies Act 2013. The release of second set of draft norms for Companies Act ,covering 24 chapters of the 29 chapters included in the Act, for comments by the public shows the determination to make the impact of the Companies Act felt at the earliest. The general impression created by this action obviously is to make business regulation smooth and faster. In principle, such an action is expected to remedy economic structural weakness. Every new rule has admirable aims like inclusivity, environmental preservation and fair land acquisition. No new law does cost benefit analysis. Yet good governance required laws that Measuring and provide enough financial and administrative resources to actually work. Otherwise, you land up in unending delay, cynicism and corruption. The Cabinet very often meets to clear projects worth lakhs of crores of rupees. MANAGING In any good system, the cabinet makes policy and the project-by-project implementation is done by the ministries. Its rules and regulations make it CORPORATE possible for ministries to clear projects, the answer cannot be cabinet Contribution to meetings alone and there is an urgent need to overhaul so that the clearances occur predictably within a fixed time frame. Historically, the Sustainable government build infrastructure with long delays. Expecting that the situation to change overnight, without sufficient incentives to the private EDITORIAL BOARD Development sector is a far cry. Even the Public Private Partnerships have been Lt Gen JS Ahluwalia, PVSM (Retd.) accompanied by accusations. Pradeep Chaturvedi A special event was organized by GRI during the UN Global Compact Leaders' Summit in New York on 19 Manoj K. Raut Ashok Kapur, IAS (Retd.) September 2013 with the theme: “Corporate Reporting Beyond 2015: Measuring and Managing Companies' Sustainable Development”. The report of the High Level Panel of Eminent Persons on the Post-2015 EDITOR Development Agenda gave a first indication of where consensus might be found on some of the most pressing Pradeep Chaturvedi sustainable development issues, including expectations on business as a central actor to bring about change. Key among these is the need for businesses to demonstrate accountability and transparency by publicly disclosing their SUB EDITOR sustainability impacts. Reji Mathew GRI provides the most widely used guidelines for sustainability reporting, which thousands of companies have MANAGER DESIGN applied to varying extents over the last decade. With the latest iteration of its guidelines – G4 – companies have a Teena Lejo newly enhanced tool to improve their sustainability performance, report to their stakeholders and drive better decision making; be it in terms of employment, policy, consumption or investment. The event emphasized on the vital connection between corporate sustainability reporting and the future framework for sustainable IOD (HEAD OFFICE) development. Delhi The Institute of Directors, IOD is organizing London Global Convention during October 1-4, 2013 with the theme: M-52, (Market) Greater Kailash - II, ”Boardroom Effectiveness for Principled Corporate Governance and Sustainability”. A number of issues that are New Delhi-110048 crucial for the economic growth and proper participation of public sector and the private sector in national Tel: 011-41636294,41636717 development are likely to be discussed. The Global Convention will emphasize on the crucial issue of impact of Fax: 011-41008705 E-mail: [email protected] sustainability on corporate governance. The demonstrable accountability and transparency expected to be Website: www.iodonline.com established through following the GRI-G-4 guidelines will certainly give a fillip to economic growth in the country. REGIONAL OFFICES Mumbai 1092-C Wing Oberoi Garden Estate, Chandivali Andheri – East, Mumbai 400 072 (Pradeep Chaturvedi) Tel : +91- 22-40238141 / 42 / 43 CONTENTS Fax : +91-22-67582231 E-mail: [email protected] Bengaluru Companies to spend Rs.15,000-20,000 crore a year on CSR 5 # 201, Oakland Apts, Ulsoor Road, Sachin Pilot Next to Vidyadeep College, Bangalore - 560 042 Profiting from your Business by turning it into a Cause 8 Board Nos: 080: 25092234 . Rajashree Birla Fax: 080: 25583490 Email: [email protected] STATE CHAPTERS Knowledge Management And The Boardroom 13 Kerala: (M) 09446488181 Colin Coulson-Thomas Tamil Nadu: (M) 09840295802 SUBSCRIPTION RATES FOR QT Corporate Governance: International Models And Legal Environment 17 Vivek K. Agnihotri India Life Subscription Rs 6000 Annual Subscription Rs 500 Each Issue Rs 45 Ignorance is Not Bliss 23 Overseas Jennifer Sundberg Annual Subscription $ 80 Life Subscription $ 400 Integrated Approach for Environmental Sustainability 29 Published by : Institute of Directors Pradeep Chaturvedi Printed at Maximum Packers Okhla Phase-1, New Delhi London Global Convention 2013 35 Programme Total Pages - 44 Sachin Pilot close to 9,000-10,000 companies. The CSR committees of the respective boards of the companies would need to Companies to spend prepare the CSR policy, specifying the projects and programmes to be Rs.15,000-20,000 crore undertaken as also their execution modalities and implementation a year on CSR schedules. The companies can collaborate or pool Expecting an annual CSR spending of Rs. 15,000-20,000 crore by resources with others to undertake their CSR activities jointly and any India Inc, Corporate Affairs Minister Sachin Pilot has asked expenditure incurred on such collaborative efforts would qualify for companies to see the new law as an investment opportunity to create computing the CSR spending. a better work environment, rather than a forced expenditure. The government has also proposed to allow the companies to set up The minister also said that the government has left the canvas wide trusts or other separate non-profit entities to facilitate implementation open for the companies to decide on their own about the CSR of their CSR activities. Besides, CSR programmes can also be (Corporate Social Responsibility) activities they wish to undertake