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

addressing theGoldenPeacock Awards NiteinNewDelhi Hon'ble Instituted by addressing theGoldenPeacock Awards NiteinBengaluru. Union MinisterofPetroleumandNaturalGas,Govt.India Hon’ble Dr. M. Veerappa Moily on 17-18January2014,atHotelITC Manor, Windsor Bengaluru(I Awards willbepresentedduringthe INNOVATION MANAGEMENT RESPONSIBILITY SOCIAL CORPORATE (both National&Global)for GOLDEN PEACOCKAWARD GOLDEN PEACOCKAWARD FOR APPLY NOW P. Chidambaram,UnionFinanceMinisterofIndia IOD Institute of Directors “ of excellence badge the mostsoughtafter Golden Peacock Awards havebecome from businessandindustry. much affection,admirationandadulation decades backhaveachieved Golden Peacock Awards setbyittwo brings outthebestinall. IOD stronglybelievesthatcompetition & Boards Tomorrow’s Building ” Golden Peacock Awards A StrategictooltoLeadtheCompetition 8th InternationalConferenceonSocialResponsibility Mrs. RajashreeBirlareceivingGoldenPeacock Email: [email protected] • Tel: 011 -41636717,41636294,41008704 •Fax:41008705 M-52 (Market),Greater KailashPart-II,NewDelhi-110048, Ind Institute ofDirectors Golden Peacock Awards Secretariat Details: Lifetime Achievement Award the company. areas ofoperation be spentaroundthe The amounthasto of morethanRs5crore crore oranetprofit more than1,000 or aturnoverof than Rs500crore net worthofmore companies witha mandatory for 2% spendwouldbe ndia) Chief Justice of India, Bhag P.N. Justice and Sweden of Minister Prime former Ullsten, eminent people , known for submit their then independence and are impartiality applicants finalist short-listed The assessors. The selection is an elaborate process done by a team of profess of best the honour and recognition of celebrate their unique to achievements to build instituted a brand. been have Awards Golde The worldwide. countries 25 over from awards, various for TodayPeacock Golden Awardsent 1,000 over receives Secretariat regarded as benchmark of Corporate Excellence worldwide. in Directors of Institute by Awards,instituted Peacock Golden www.goldenpeacockawards.com Azim H.Premji,Chairman,WiproLimitedreceiving the Golden PeacockLeadership Award

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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 undertaken by the company through non-related trusts, societies, or to comply with the new norms. other non-profit companies with an established track record of at least He said the few areas prescribed under the law are only suggestive in three years. nature and it should not be seen as a restrictive list. Activities which may be included by the companies in their CSR Under the new Companies Act, 2013, which has replaced nearly six- programme can be related to "eradicating extreme hunger and decade old legislation governing the way corporates function and are poverty, promotion of education, promoting gender equality and regulated in India, all profitable companies with a sizeable business empowering women, and reducing child mortality and improving would have to spend every year at least 2 per cent of three-year maternal health". average profit on CSR works. Other such activities can include combating human This would apply to the companies with turnover of Rs. 1,000 crore immunodeficiency virus, acquired immune deficiency syndrome, and more, or net worth of Rs. 500 crore and more, or a net profit of malaria and other diseases; ensuring environmental sustainability, Rs. 5 crore and more. employment enhancing vocational skills and social business projects. The new rules, which would be applicable from the next fiscal 2014- The permitted CSR would also include contributions to the Prime 15, also requires the companies to set up a CSR committee of their Minister's National Relief Fund or any other government fund for board members, including at least one independent director. socio-economic development and relief, and funds for the welfare of the Scheduled Castes, the Scheduled Tribes, other backward classes, "This money would not come to the government of India. It is the minorities and women. companies' money and they can spend as per the decision taken by the CSR committee of their board. But they must report the same," Mr. Pilot said that the draft rules have been framed keeping in mind Mr. Pilot told PTI in an interview. the main legislation and the government would incorporate the public suggestions as much as possible. "Our assessment is that if every company that is qualified for doing the CSR does so, then Rs. 15,000-20,000 crore would be spent in a "India is the first country in the world to have CSR provisions in the year in various projects such as environment, skill development, statute. water, sanitation etc. "We have left it very open on how the companies would want to do "We have left the canvas very wide as we thought it would not be their CSR. But at the same time, they must make public their CSR proper to make it restrictive," Mr. Pilot said. The companies have details public for the benefit of their shareholders and the public at been asked to give preference to their local area of operations for large," he added. such CSR activities, while those not being able to spend the required Expecting full cooperation from the corporate sector on the CSR amount would need to specify the reasons for the same in their rules, the Minister said: "It is one thing to sponsor events like cricket annual CSR report. matches and get some benefits out of the same. But CSR should be According to the draft rules, which would be finalized after taking about creating goodwill. into account the suggestions from all stakeholders and the general "There is a perception of there being a trust deficit between the public, the CSR should not be seen as "charity or mere donations". companies and the people of the area where large factories are It has been proposed that the CSR activities should not be located. There are concerns that the companies are making huge exclusively for the benefit of employees of the company or their benefits through activities like mining etc. family members, while only those CSR activities would be taken “That perception needs to be corrected and the companies can create a into consideration that are undertaken within India. good perception through their CSR initiatives.” The companies would need to create a CSR corpus comprising of 2 "In a way, CSR can be an investment opportunity, as the companies per cent of net profit, while any income from this corpus and the would be able to create in their areas of operation a healthier surplus arising out of CSR activities would need to be credited back workforce, people would have much less grouse, the community to the CSR corpus. around the area would be happier and such an environment would As per industry estimates, the mandatory CSR rules would apply to produce much better output and would be much more conducive for doing business," he said

Courtesy : PTI 5 Making Companies Law 2013 Work Key Highlights A RECIME CHANGE FOR DIRECTORS AT LEAST AT LEAST

3 Directors 2 Directors I Directors PUBLIC COMPANY PRIVATE COMPANY 1 PERSON COMPANY

MAXIMUM DIRECTORS I5( Can be increased through a special resolution) Certain companies Big public companies to Independent directors required to have at least have at least have to bring certain specified I I 3 qualifications women director Independent directors A TIGHT FRAMEWORK FOR ADUIT AND AUDITORS An individual auditor can Reappointment only Company can prescribe have a maximum term of after end of FIVE rotation of auditing partner FIVE YEARS, an audit firm YEARS, after an auditor & team within the audit firm TEN YEARS completes its first term

Incoming auditor should Certain classes of not be associated with companies to appoint the outgoing auditor: no an internal auditor common auditor or partner

DETAILED NORMS CSR

The rules will be 2% mandatory CSR For first CSR reporting three applicable from spending would be financially years ending on or FY 2014-2015 computed as 2% of before 31st March 2014 would the average net profits made be considered

Annual reporting CSR committee will frame It will detail the CSR from the CSR policy of the projects the company will 2014-2015 company take up during the year

CSR will not include It lays down a list CSR activity activities exclusively of activities that can be has to be for the benefit of Included in CSR within staff or their family India

That kind of became an unwritten edict in the Birla family. It is a legacy which continues even today. My husband Adityaji fostered this philosophy. My son Kumar Mangalam has a zealous, evangelical approach. He has made the philosophy of caring, giving, developing and empowering an underserved people as part of our Group's DNA. He feels we have a tremendous responsibility Profiting from your Business to give back to society. AN ARTICULATED VISION

by turning it into a Cause In fact we have an articulated Vision which is: “To actively contribute to the social and economic development of the communities in which we operate. In so doing build a better, sustainable way of life for the weaker sections of society”. Our social vision is integrated into our business vision. It is rooted in our values and it makes a difference to the way we do business. We have charted our path according to our beliefs. While we do not turn business into a cause, we do “social cause marketing”. We turn it into a lever, where the ROI or return on investment lies in the transformation of a people's lives. Later I will focus on how this activity in itself translates unambiguously to a competitive advantage, giving us an edge over others. TODAY MORE THAN EVER IT IS NECESSARY TO LOOK INTO SOCIETAL ISSUES. Rajashree Birla This is in the face of high levels of insecurity and poverty – a part of which is the impact of globalization. Since the last two decades, Over three decades ago, Milton Friedman, the Nobel Prize Winner – India as a nation has been successful in pulling out a significant a name with which all of you must be extremely familiar, had said number of people from below the poverty line. Unfortunately, we “there is one and only one social responsibility of business – to use still have quite a large number of our people living below the its resources and engage in activities designed to increase its poverty line, that is less than 1.25 dollar a day. This is a profits”. Prior to him, in the early 1920s, Prof. John Keynes had said monumental problem. The Government of India has an ambitious “The business of business is to do better business and transfer its vision for inclusive growth. But the Government alone cannot benefits to its consumers and stockholders”. handle this issue. Therefore, Corporates like ours have to take complementary action to address key challenges such as providing Of course, both Keynes and Friedman were talking in the context of education, economic self-reliance/women empowerment, the Western Nations. These never had to face major societal issues. sustainable livelihood, healthcare, sustainable development, and Over the last decade, the ground has shifted considerably. A high water conservation. You will be surprised to learn that in quite a sense of business ethics, corporate social responsibility, inclusive of few villages in our country women still have to walk about 5 accountability to multiple stakeholders – such as shareholders, kilometers to fetch water. These are our focus areas. These are not customers, employees and the community – is on top of every top-down initiatives but flow out of the participatory rural progressive management's agenda. appraisal process that we follow. We work in 2,500 villages and reach out to 6 million people. CSR is a priority at all our Social and economic policies are becoming inextricably manufacturing Units. All of our projects at our various Group intertwined. Economic debates are increasingly influenced by Companies are carried out under the aegis of the Aditya Birla societal issues such as health, education, and livelihood. Centre for Community Initiatives and Rural Development. I am Even as the theme of our session is “Profiting from your business by privileged to spearhead this Centre. Mr. Askaran Agarwala and turning it into a cause”, my fundamental premise is that because we Dr. Pragnya Ram and I form the apex team. Collectively, we have been so involved in cause marketing, which is essentially provide the strategic direction and the thrust areas for our work and making a difference to the lives of the marginalized, we have gained ensure performance management. We have a dedicated team of enormously. And that is the bottom-line, which I will elaborate. 250 CSR people in this domain. It is anchored by our Group's Corporate Communication's & CSR Cell. We view our social But first, let me set the context by giving you an overview of our projects very seriously, far transcending mere cheque-book Group. We are a US$ 30 bn corporation. The Aditya Birla Group is philanthropy. Corporate Social responsibility is accorded as much in the league of Fortune 500 companies. We have an extraordinary importance as our business projects. Therefore, our social vision force of 1,30,000 employees, of 30 nationalities, operating in 25 forms an integral part of the business vision of all of our Group countries. Companies. That said - Ours is a 120 years old organization, rooted in history. A FEW EXAMPLES OF OUR INITIATIVES Our roots go back to the early 1900s and the Nation's struggle for freedom. It was during this formative period in history that the In education, we run 42 Schools, where 45,000 children are Legendary, Mr. G.D. Birla, my grandfather-in-law worked shoulder provided quality education. Of these 18,000 children receive free to shoulder with Mahatma Gandhi. He believed implicitly in the education. We have enrolled 20,000 children at our Balwadis trusteeship concept espoused by Gandhiji. This meant that a part of (Nurseries). We reach out to more than 29,000 people through our your profits be always ploughed back for the larger good of society. adult literacy and bridge education programs. Over 8,000 students

8 in the villages are awarded merit scholarships. Nearly 15,000 Gindwania in Nagda (MP), rain-water collected from the roof of students are enrolled at our vocational training centres. Our Centres the village school is diverted to a water pipe. of technology excellence include – (Birla Institute of Technology and Science) BITS, Pilani; BITS, Dubai; BITS, Goa; BITS, • Installation of hand-pumps at intervals of 10-15 houses and Hyderabad and a Technology Institute at Mesra. From BITS, which providing training in their maintenance and repair. is a globally recognizpremier Institute, we get some of the best recruits for our Companies. Over 10 years ago to put Indian • Conservation at the community level by harvesting the excess business success stories as case studies for global leaders in the runoff through catering to micro needs, for instance kitchen making, we set up the Aditya Birla India Centre at London Business gardens and soak-pits. School. It is contributing not only to India's image but ours as well. Let me share with you the story of Shakuntala, one of the To provide health-care to the people, every year we conduct more beneficiaries, which is both touching and inspirational. than 3,500 medical camps, treating over 5 million patients for Shakuntala lives in the Dudhi Block, of Renukoot in Uttar various ailments, such as AIDS, TB, Cancer diagnosis, cataract, Pradesh. A mother of five children, she along with other village cleft-lips, among others. We have helped immunize 6 million women would trudge 5 kilometers to fetch four pots of water for children against polio in the last one year, sponsoring and managing the family, and even that would barely suffice. Voicing her opinion 23,000 booths. in timid tones, she would say that women in the villages are children of a lesser God, given the hardships faced by them. Our Let me tell you the story of Vishnu who lives in Nagda in Madhya team took this up as a challenge. Backed by our Group's resources Pradesh. Vishnu, now a 20 year old lanky girl, is a great farm-hand. and UNICEF, they installed hand pumps at an interval of every 10 From sunrise to near sundown, like a lark she sings in the field while houses in 110 villages, giving water to over a 100,000 people. No helping her parents on their two acre farm. You can see shoots of longer did women have to spend hours on end collecting water. The wheat, almost golden in colour swaying in the wind. Vishnu UNICEF collaboration entailed that the hand pumps be maintained apparently is enjoying herself. She says, “Once upon a time I was by women. Shakuntala was the first woman volunteer. Today, she is only three feet tall because I had to bend over and grip my legs while a qualified hand pump mechanic earning 650 Dollars, in the dragging my feet which were crippled. My parents were always summer months, when the pumps need to be repaired. praying that I should walk again. And then a miracle happened as I underwent polio-corrective surgery, persuaded by your teams. After She has, in turn, trained another 80 women as hand pump months of physiotherapy, much anguish and physical pain, now I mechanics. These women who cannot read or write earn a good can almost walk straight again”. Sure she does walk well. The little deal of money by rural standards. Today, Shakuntala very proudly limp that she has is barely visible. We should not let any child get to remarks that from being a seeker of charity, she is now a teacher. this stage at all. She says that the Group has been a life changer not only for her but for all the 110 villages who now have easy access to water – their In Vishnu's case fortunately we were able to turn the clock back as life force. Yet another 45,000 women across India feel we saw a lot of hope when the surgeons reviewed her case. empowered, working in 4,500 self-help groups set up by our Reconstructive surgery in acute cases is not even attempted. Then teams. They are making a living. These women like Shakuntala we try to rehabilitate polio victims with the Jaipur foot which believe that they are now in charge of their own destiny. accords them mobility to a large extent and reduces their dependents on the family. In a way it also restores their dignity and sense of self- In a far wider move in India, we have aligned with FICCI esteem. Since almost a decade, polio eradication has been and (Federation of Indian Chambers of Commerce & Industry) and set continues to be a priority. up the FICCI – Aditya Birla CSR Centre for Excellence. The vision of our Centre, the first of its kind in the world is – “To Besides this, we have mother-and-child care projects reaching out to incubate, nurture and accelerate a paradigm of sustainable and women and children. Our 18 hospitals all over the country cater to inclusive CSR in India and thereby raising the Human more than 5,00,000 poor people almost free of cost. At the world- Development Index through poverty alleviation”. class Aditya Birla Memorial Hospital in Pune, 15% of the beds are earmarked for the poor. Through tele-medicine facilities, we We have recently sponsored the Columbia Global Centre's Earth connect the rural poor to our hospitals as well. Institute in Mumbai, India. We believe that the Earth Institute will go a long way in making sustainable development in India a ground WATER - THE LIFE FORCE. reality and help us in poverty alleviation. With a view to create both employability and entrepreneurship, we Water which is the life force of people, regardless of geographies has are working on a major project, namely – “Nation Building”, in been a perennial problem in India's villages, plagued often by South India. Our project encompasses a diverse range of droughts. We have been providing water on a continual basis to the disciplines that will foster inclusive, sustainable growth, and create villagers that are in proximity to our Plants. But this is for their basic employability for the nation's youth. needs. At the heart of all these interventions, our primary goal is poverty We evolved a multi-pronged strategy based on an integrated alleviation and long term sustainability. development plan. Engaging the community influentials at every stage, we worked with water as the pivotal factor: Like India, in Egypt too, poverty is there. We have adopted 2 schools. The El Khalidin School which is close to our plant and the • Replacing traditional wells with bore wells dug 400 feet down the Kafr El. Sheikh School for vocational training, where University belly of the earth to tap the natural underground water aquifers. Professors go and teach the students. We have set up a tailoring • Recharging underground water sources, such as - tube wells and centre for women, largely divorcees and widows. We are reaching open wells through rain-water harvesting. Construction of check out to children in two orphanages. We have set up the intensive- dams in as many villages as possible facilitated the process so at care-unit at the cancer hospital for children in collaboration with

9 the Government. Work” by the Hewitt – Fortune Magazine Study, across the Asia Pacific Region. In Thailand, we have established the Aditya Birla Knowledge Centre. This is also a vocational training centre for the weaker Secondly, our work has created and continues to create sections of society. tremendous goodwill among consumers, far in excess of the price tag. Consumers look upon our Group and its Companies as At our Canadian Company Novelis, headquartered in Atlanta, we having a social conscience. So there is a marked preference for our have mounted a massive recycling education program involving our products. In all of the sectors that we operate in – say cement, people and the local communities. Over 35 billion cans – coke, aluminium, copper, viscose staple fibre, carbon black, we are pepsi, beer, spirit among others are recycled every year. Novelis is among the top most in industry. And these undoubtedly are the world's largest recycler of used beverage cans. profitable businesses. Let me now move on to how our engagement with underserved Thirdly, our 3 million shareholders and investors are proud of communities has profited us. Profit not in the normal sense of the our Group. They feel that this is a Group that they would term – quantified monetarily but far beyond the bottom-line definitely like to support. In all of our Group Companies Annual mentality. We know what we are doing is benefiting society. So our Reports, we provide a quantified evidence of our social and motivation is very different. Our CSR deployment has translated environment performance. I have seen at the Annual General into four distinct advantages. Meetings, the special pride that shareholders take in their involvement with our Companies on this score. Investors also Firstly, our activities provide us with a great reputational lever flock to our Group. that translates into a distinct values-led company image. This enables us to attract, retain and energize talent. Professionals feel a Fourthly, social projects are also a means of sharing with the sense of comfort when they see how our Group transcends business community, the values that we as an organization stand for. It and is genuinely committed to social upliftment. Today's young is a way of telling them that we care about you, that your concerns want to ensure that the benefits of capitalism percolate down. Like are ours as well, and that we are a principled people led by a moral us, talent believes that wealth creation is a noble pursuit. They feel compass. that wealth can be best enhanced by distributing it. A new ethos of generosity is surfacing. This is clearly seen in the willingness to I do hope I have made a strong case of how mainstreaming CSR build a society that works for everyone. They prefer to work for into our businesses and delivering societal value has given us companies who are strong in CSR. Our employees and potential tremendous profits, albeit of a different kind. employees think of us as a Group that is cast in that mould, a Group that mirrors their personal values. Our reward lies in the fact that we have been named “The Best Employer in India and among the top 20 * Rajashree Birla, Chairperson in Asia”, by the Hewitt / Economic Times Wall Street Journal Study The Aditya Birla, Centre for Community in 2007. In 2009, we were ranked 6th in “Great Place for Leaders to Initiatives and Rural Development GET DIRECTORS SUBSCRIBE NOW EVERY VIEW MONTH 12 issues of Quality Times Each Year Subscription Terms Cover Price ( ) You Pay Only You Save On Cover Page

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...... UPCOMING EVENTS……..

LONDON GLOBAL CONVENTION 2013 on CORPORATE GOVERNANCE & SUSTAINABILITY and presentation of Golden Peacock Awards for Corporate Governance, Sustainability, (both National & Global) and HR Excellence 1 – 4 October 2013, London (UK)

8TH INTERNATIONAL CONFERENCE ON CORPORATE SOCIAL RESPONSIBILITY and presentation of Golden Peacock Awards for Corporate Social Responsibility, (both National & Global) and Innovation Management 17 - 18 January 2014, ITC Hotel Windsor Manor, Bengaluru (India)

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www.iodonline.com range of activities. Much of what is assembled is often 'commodity knowledge' available to competitors. It does not differentiate or represent a source of competitive advantage. It might not be relevant to new priorities, challenges or opportunities. Past initiatives have often been expensive, time consuming and disruptive. Better and faster results may need to be achieved with Knowledge Management limited budgets and with existing people, structures and cultures. Does the focus of knowledge management in your company need to change? Many organisations are also capturing and sharing the wrong sort of knowledge. Knowledge of how best to undertake and the Boardroom particular tasks and confront specific issues can be more important than general understanding, especially so in relation to key jobs that deliver key objectives sought by the board. A switch of emphasis is required from 'knowledge about things' to 'knowing how to do things', and from the storage of knowledge to its access and use. Directors should question whether the knowledge management team is serving the needs of C-suite executives or helping front-line work-groups to excel. The management team may need to switch is attention from 'top-down' motivation and management to 'bottom-up' support and key work- group performance. UNDERPINNING RESEARCH & EXPERIENCE

Colin Coulson-Thomas The author's underpinning research has identified critical success factors for important activities such as winning business. Twenty How a company manages its corporate know-how and the studies found a clear distinction between how 'winners' (top knowledge of its people can have a significant impact upon growth quartile performers when those examined were ranked in order of and development. When knowledge management is discussed in the results achieved) and bottom quartile 'losers' tackle key jobs. Once boardroom what are the key questions that a director should ask? determined, critical success factors and winning ways can be Should directors challenge contemporary approaches? If knowledge explained and/or built into work processes and various forms of management is not on the boardroom agenda should it be? performance support. A five-year investigation led by the author suggests that boards Has sufficient effort been devoted to capturing and sharing should be concerned. Many knowledge management initiatives have knowledge of how to excel at key tasks? been excessively general and overly complex, and they have not delivered hoped for benefits. Encouragingly, a more affordable route The evidence suggests there is considerable potential to boost the to better results has been identified, but a change of emphasis is performance of even the work-groups in the top quartile of required. A board needs to ensure that a company's management is attainment. For example, in relation to winning competitive bids, embracing what is required rather than defending past practices. those in the top quartile of achievement were only very effective at less than a half of the identified critical success factors. The This article presents some key findings from the investigation's performance of every organisation examined could be improved. report Transforming Knowledge Management which sets out a more focused, flexible and affordable approach that can quickly Knowledge-based performance support - whether simple paper impact upon performance, deliver multiple objectives and provide checklist, mobile phone application or multi-media tool - can clear benefits for companies and corporate stakeholders. The enable average performers to emulate 'superstars', and that this report suggests a new approach to corporate leadership which puts can be done by working with the groups and teams one has, i.e. more emphasis upon ensuring that people are engaged and without needing to replace people, or change attitudes, cultures provided with better support. or values. A board needs to ensure that management provides the people of an organisation with the tools to do what is expected of CHANGING THE FOCUS OF KNOWLEDGE them. Performance tools can address identified issues, help people to do difficult jobs and boost the achievements of average MANAGEMENT performers. How affordable and flexible are the approaches which have been adopted? Directors should question the cost-effectiveness of KNOWLEDGE MANAGEMENT AND knowledge management initiatives. More effort has often been PERFORMANCE devoted to implementing them than measuring their impacts. Data, information and knowledge collected is not always relevant or Knowledge-based performance support addresses deficiencies of accessible as and when required. Some approaches also require 'traditional' knowledge management and delivers additional 'culture change', while requirements and priorities can change benefits. It is relatively easy to adopt and its implementation does during implementation. not require a change of systems or structure. Its focus can be upon key work-groups, it can embrace channel and supply chain 'Traditional' approaches can require significant upfront investment partners, and it represents an affordable route to a high in capturing and storing information and knowledge covering a wide performance organisation. It can also be personalised and adapt to

13 changing requirements. Some boards champion innovation. Performance support is particularly suited to launching new products and initiatives. Performance support can build confidence and understanding, and Details and animations and images showing new offerings in use may be easy to disseminate to business partners in multiple can be quickly communicated around the world. Automating locations. Directors should ensure that the support provided to routine tasks frees up time for differentiation and tailoring that may people for whom they are responsible is current and relevant. This justify a price premium, or for addressing implementation issues. can be ensured by appropriate social networking and automatic updating when users are on-line. People can be helped to cope with Knowledge-based performance support can provide a solid base change. Building checks into tools can help to ensure quality and for future sales, service and corporate communications. In addition compliance. to speeding up adoption and cutting costs, it can reduce commercial, regulatory and quality risks. The ability to present In comparison with costly and protracted alternatives, performance information in different formats can enhance understanding and support can be quickly adopted to address particular problems. It can the assimilation and application of new knowledge. be provided in ways that best meet the needs of those to be helped, and can evolve as requirements change, new issues emerge, and REDUCING RISK & ENABLING COMPLIANCE additional funding becomes available. Applications can support mobile activities and new ways of working and learning, delivering Ensuring compliance is a concern of many boards. Knowledge commercial success for organisations and personal satisfaction for workers and professionals often operate in areas that are individuals. intrinsically risky and where non-compliance with relevant policies, laws, regulations, rules and guidelines can have serious A board could encouraging the more strategic use of performance consequences. Performance support can help people to identify, support. The unit costs of providing help fall with larger assess and address risks, and take consistent, fair and compliant communities of users. Once set up, the cost of downloading, decisions. It can build trust, competence and confidence. duplicating or otherwise sharing a support tool can be minimal. A social networking facility can encourage knowledge sharing. Risk-aversion can be counter productive. It can increase the chance Automatic updates can help to keep support current. of more effective options and approaches being overlooked. A desire to avoid risk may actually result in missed opportunities to RESPONSIBILITY FOR KNOWLEDGE-BASED achieve significant savings and deliver substantial increases in SUPPORT productivity and performance. The right knowledge-based support can liberate, facilitate innovation and enable responsible risk Directors and the CEO should think carefully before allocating taking. knowledge management responsibilities. Past initiatives have often been implemented by IT professionals and led by the chief Performance support can help to ensure compliance and achieve a technology officer. If a board feels there needs to be more focus on direct impact upon 'front line' behaviour and measurable outputs. particular jobs that contribute to priority corporate objectives then When unfamiliar situations arise and re-skilling is required, others may need to be put into the driving seat. performance improvements are therefore easier to measure than is the case with 'traditional' approaches in areas where costs - for While implementation may be delegated to management, a board example of training - are easier to determine than the benefits. should ensure its priorities are observed. Adoption involves assessing important roles and tasks; identifying steps in work 24/7 LEARNING SUPPORT OF KNOWLEDGE processes that have the greatest impacts; and ensuring that people in WORKERS these 'key' and demanding jobs are enabled to excel by providing them with appropriate performance support that captures and shares A balance has to be struck between performance today and future critical success factors and what high performers do differently, and potential, and between support of a selected few and 'helping the helps them to succeed. many'? Many companies try to equip perceived high fliers for future roles. Knowledge-based performance support can help Directors should question whether new challenges could be handled people to both excel today and tackle whatever might be by existing people if they were better supported. Hiring people encountered tomorrow. It can complement or replace 'traditional' and/or using external consultants to support innovation or new approaches to mentoring and training, and provide assistance to offerings can be expensive, especially where developments occur on scattered communities, as and when required. a regular basis. Dipping into the external market as a fresh requirement arises can be costly. It may also not be practical if a Personal coaching and/or mentoring larger numbers of people can company wishes to launch a new offering at the same moment in be a challenge. Performance support can overcome scalability time across a global market place. barriers and cost-effectively provide good practice, and up to date and personalised help to people throughout an organisation, and SUPPORTING BUSINESS DEVELOPMENT AND internationally, on a 24/7 basis. Those supported can learn from NEW INITIATIVES each use, enabling them to remain current.

A company may not necessarily need expensive new hires in order to Are people in different locations and when out of the office and on expand. Knowledge-based support can be much more cost effective the move receiving adequate assistance? Performance support is a than options such as external recruitment. It can enable existing form of 24/7 and on-demand mentoring. It can take help that is people to understand, sell and support a new product or service and provided to a few and make it available to large numbers of people, help customers to responsibly innovate and buy. Prospects can wherever they might be, and whenever assistance is required. assess new options that better meet their needs. They can feel in Individual users can benefit from the advice of not just one person, control and may order more than when sales staff are present. but many - if not a galaxy - of superstars, each of whom may excel in particular areas.

14 Knowledge-based performance support is especially relevant to the Boards should favour approaches that deliver multiple objectives. problems confronting many public services. With staff costs Traditional 'top-down' leadership practices in many companies are representing a high proportion of total expenditure and the time it not delivering the advantages which a change of emphasis and takes to train new professionals, performance support can make the focus could bring. 'New leadership' and a 'bottom-up' approach to best of available resources and deliver multiple outcomes in a creating high performance organisations and achieving practical and cost-effective way. People usually see better support as simultaneous progress on several fronts are required. helpful and implementation can be manageable, affordable and achievable. Knowledge-based performance support, whether simple checklists or more complex tools, offers financial, scalability, COMMUNICATING AND BUILDING flexibility and sustainability advantages over 'traditional' options. Relevant and current support can be provided wherever help is RELATIONSHIPS needed, at a place of work, out of the office, or on the move. Users Are mutually beneficial relationships being forged with key can benefit from the advice of whoever has the most relevant and stakeholder groups? Performance support can have a significant and effective way of addressing problems that arise at each stage of a beneficial impact on corporate communications and engagement. complex task. 24/7 support can be provided when and wherever required. Delivery can be via a laptop, palmtop, mobile phone, or via the internet, and CONCLUSIONS integrated with web communications and social networking. Contemporary approaches should be challenged. A board should Customers are often unaware of the impacts of their buying be vigilant when proposals for new knowledge, talent or change decisions upon themselves, others and the environment. Sales and management programmes are received. An initiative that does not purchasing support tools can show buyers the implications of offer a quick payback, multiple benefits and a high ROI, or whose different courses of action, and enable them to select the option results are difficult to measure, should be questioned. It may not be which has the least harmful effect. They can increase the focused, use contemporary tools, or be justified. performance of key work-groups such as front-line sales teams, Directors should question whether the approaches of high account managers, service and customer support staff, and make it performers have been captured in a form that enables them to be easier for people to take difficult buying decisions. accessed by others whenever and wherever required, and shared, Many people and boards would like to address challenges such as utilised and developed. They should ensure that people and teams sustainability and climate change, but they lack a practical way of delivering key corporate objectives are engaged and appropriately doing so. Performance support represents a flexible and cost- supported. effective way of demonstrating corporate social responsibility and Performance-focused knowledge support could improve the quickly impacting upon behaviour. In doing what they feel is the implementation of board policies, ensure compliance, reduce risk, right thing people can benefit themselves, their supplier and the boost productivity, avoid trade-offs and more quickly deliver planet. Corporate performance, and employee and customer multiple objectives. It could also enable corporate leaders to set satisfaction can all gain. people free to innovate and bespoke responses to the changing ‘NEW LEADERSHIP’ requirements of customers and other stakeholders

'Top-down' and 'all encompassing' central initiatives can be expensive and time consuming. They can result in more complex and inflexible solutions that take much longer to have an impact *Prof Colin Coulson-thomas upon performance than 'bottom-up' applications of performance A member of the business school team at support to address particular problems and burning issues. Knowledge-based tools can impact relatively quickly upon key the University of Greenwich, U.K and an corporate objectives and can be used to both increase performance adjunct professor at Manipal University. and generate additional external income.

HAWKISH RAJAN TURNS UP THE HEAT MUMBAI: Reserve Bank of India (RBI) governor Raghuram Rajan in his policy-making debut on Friday came out as a hawk on the side of inflation in the same mould as his predecessor D Subbarao, belying hopes that he might be inclined to push growth at the

NEW & VIEWS & NEW risk of inflation. Addressing a press conference here shortly after unveiling his maiden monetary policy, Rajan, said: “The hike in the repo rate should not be interpreted to mean that growth has taken back seat and is not a priority. Inflation and growth are both priorities for RBI.”. The 0.25 percentage point increase in the repo rate will not have any significant impact on growth rates, he said, adding: “Containing inflation, along with various other measures, will support economic growth.” Rajan also said that steps taken by RBI on July 15 to tighten liquidity will be gradually withdrawn as stability returns to the financial system. “The intent of the policy today is primarily to say the cost of funding is very high; we need to withdraw these liquidity (tightening) measures as soon as the markets allow it... there will immediately be a reduction in the cost of funding to the financial sector,” he said.

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“Sharing relevant knowledge is the best aspect of this course”. THE COMPANIES———— BILL, 2011 T.R. Doongaji, MD TATA Group Services ARRANGEMENT———— OF CLAUSES rd of CHAPTER I “My greatest appreciation for the manner in which you presented your RELIMINARY P material, rich in content, depth of experience and overall expertise including international matters was mind boggling”. * Felix D’Souza, Head Corporate Governance, Abu Dhabi CLAUSES may prescribe the minimum number of 149.(3) Every listed public company shall have at least one-thi of “It was a great learning experience” the total number of directors as independent directors and the Prof. Gregorio Flores, Texas, USA Central Government independent directors in case of any class or classes of public “I would like to recommend each companies. Director to undergo this training program” director may be selected from a dataified F.K. Siddiqi Director, Hinopak Motors, Karachi 150. (1) Subject to the provisions contained in sub-section (5) use section 149, an independent bank containing names, addresses and qualifications of persons who are eligible and willing to act as independent directors, maintained by any body, institute or association, as may by not by the Central Government, having expertise in creation and maintenance of such data bank and put on their website for the Building by the company making******************************** the appointment* Only relevant of parts such have directors been highlighted. Pl view details on www.iodonline.com or http://www.mca.gov.in/ IOD Tomorrow’s www.iodonline.com Institute of Directors Boards There has been renewed interest in the corporate governance practices of modern corporations, particularly in relation to accountability, since the high-profile collapses of a number of large corporations during 2001–2002, 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 Corporate Governance: Corporation and MCI Inc. (formerly WorldCom). Their demise is International Models And Legal Environment 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 Principles of Corporate Governance (OECD, 1998 and 2004), and the Sarbanes-Oxley Act of 2002 (US, 2002). The Cadbury and OECD reports present general principles 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 Vivek K. Agnihotri government in the United States to legislate several of the principles recommended in the Cadbury and OECD reports. INTRODUCTION • Rights and equitable treatment of shareholders: Organisations should respect the rights of shareholders Corporate governance refers to the system of rules, principles, and help shareholders to exercise those rights. They can practices and processes by which a company is governed. They help shareholders exercise their rights by openly and provide the guidelines as to how the company can be directed or effectively communicating information and by controlled such that it can fulfil its goals and objectives in a manner encouraging shareholders to participate in general that adds to the value of the company and is also beneficial for all meetings. stakeholders in the long term. Stakeholders in this case would include everyone ranging from the board of directors, management, • Interests of other stakeholders: Organisations should shareholders to customers, employees suppliers, financiers, recognize that they have legal, contractual, social, and government and the community. Corporate governance, therefore, market driven obligations to non shareholder essentially involves balancing the interests of the many stakeholders stakeholders, including employees, investors, creditors, in a company. Since corporate governance also provides the suppliers, local communities, customers, and policy framework for attaining a company's objectives, it encompasses makers. practically every sphere of management, from action plans and • Role and responsibilities of the board: The board needs internal controls to performance measurement and corporate sufficient relevant skills and understanding to disclosure. review and challenge management performance. It also The governance structure of a corporate entity specifies the needs adequate size and appropriate levels of distribution of rights and responsibilities among different independence and commitment. participants in the corporation (such as the board of directors, • Integrity and ethical behaviour: Integrity should be a managers, shareholders, creditors, auditors, regulators, and other fundamental requirement in choosing corporate officers stakeholders) and specifies the rules and procedures for making and board members. Organizations should develop a code decisions in corporate affairs. Governance provides the structure of conduct for their directors and executives that promotes through which corporations set and pursue their objectives, while ethical and responsible decision making. reflecting the context of the social, regulatory and market environment. Governance is a mechanism for monitoring the • Disclosure and transparency: Organizations should actions, policies and decisions of corporations. Governance clarify and make publicly known the roles and involves the alignment of interests among the stakeholders. responsibilities of board and management to provide stakeholders with a level of accountability. They should Most companies strive to have a high level of corporate governance. also implement procedures to independently verify and These days, it is not enough for a company to merely be profitable; it safeguard the integrity of the company's financial also needs to demonstrate good corporate citizenship through reporting. Disclosure of material matters concerning the environmental awareness, ethical behaviour and sound corporate organization should be timely and balanced to ensure that governance practices. all investors have access to clear, factual information.

17 CORPORATE GOVERNANCE MODELS Many US states have adopted the Model Business Corporation Act, AROUND THE WORLD but the dominant state law for publicly traded corporations is Delaware, which continues to be the place of incorporation for the majority of publicly traded corporations. Individual rules for corporations are based upon the corporate charter and, less authoritatively, the corporate bylaws. Shareholders cannot initiate changes in the corporate charter although they can initiate changes to the corporate bylaws. INDIA MODEL

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. It has been There are many different models of corporate governance around suggested that the Indian approach is drawn from the Gandhian the world. These differ according to the variety of capitalism in principle of trusteeship and the Directive Principles of the Indian which they are embedded. The Anglo-American "model" tends to Constitution, but this conceptualization of corporate objectives is emphasize the interests of shareholders. The coordinated or Multi- also prevalent in Anglo-American and most other jurisdictions. stakeholder Model associated with Continental Europe and Japan Companies Act, 2013 has brought renewed focus on corporate also recognizes the interests of workers, managers, suppliers, governance. The first tranche of draft rules, now open to public customers, and the community. A related distinction is between comments, is spurring companies to assess their preparedness for market-orientated and network-orientated models of corporate the new regime. governance. DIVERSITY AND INDEPENDENCE CONTINENTAL EUROPE MODEL The requirement for at least one woman director applies to listed Some continental European countries, including Germany and the companies and other public companies exceeding a threshold limit Netherlands, require a two-tiered Board of Directors as a means of of paid-up capital or turnover. While listed companies have one improving corporate governance. In the two-tiered board, the year to comply, others have three years. Executive Board, made up of company executives, generally runs day-to-day operations while the supervisory board, made up In public companies exceeding the threshold limit of paid-up entirely of non-executive directors who represent shareholders and capital, turnover, outstanding loans and so on, Independent employees, hires and fires the members of the executive board, Directors should comprise one-third of the Board. determines their compensation, and reviews major business decisions. The other classes of companies would continue to be governed by the relevant regulations. The Board composition of listed THE UNITED STATES AND THE UNITED companies would continue to be governed by clause 49 of the KINGDOM MODEL Listing Agreement. The Securities and Exchange Board of India has floated a consultation paper to align clause 49 with the new The so-called "Anglo-American model" of corporate governance company law. emphasizes the interests of shareholders. It relies on a single-tiered Board of Directors that is normally dominated by non-executive CSR INITIATIVES directors elected by shareholders. Because of this, it is also known The draft rules emphasise that corporate social responsibility (CSR) as "the unitary system". Within this system, many boards include should not be limited to donation or charities, but have a larger some executives from the company (who are ex officio members of social objective. Activities that solely benefit employees and/ or the board). Non-executive directors are expected to outnumber their family members, or which are in the normal course of business executive directors and hold key posts, including audit and would not constitute CSR. Companies have a fair degree of compensation committees. The United States and the United flexibility in structuring initiatives — they can set up a trust, Kingdom differ in one critical respect with regard to corporate foundation or society to implement the CSR programme. governance: In the United Kingdom, the CEO generally does not Alternatively, it could be implemented through other organisations also serve as Chairman of the Board, whereas in the US having the that have a track record of at least three years in related areas. dual role is the norm, despite major misgivings regarding the impact on corporate governance. The CSR Committee set up by the Board should prepare a transparent monitoring mechanism. The companies should report, In the United States, corporations are directly governed by state in the prescribed format, their CSR initiatives in the Directors' laws, while the exchange (offering and trading) of securities in Report and on the company Web site. Only activities within India corporations (including shares) is governed by federal legislation.

18 will qualify. Tax deduction for CSR spend will depend on provisions OECD PRINCIPLES under the Income Tax Act. Reporting should be yearly from financial year 2014-15. One of the most influential guidelines has been the OECD Principles of Corporate Governance, published in 1999 and revised The Government has adopted the 'comply or explain' approach, and in 2004. The OECD guidelines are often referenced by countries no specific penalties are prescribed for non-compliance, provided developing local codes or guidelines. Building on the work of the there is adequate disclosure on reasons for failure. However, OECD, other international organisations, private sector responsible corporate citizens would like to set benchmarks for associations and more than 20 national corporate governance socially responsible behaviour, and would be wary of reporting a codes formed the United Nations Intergovernmental Working failure. Group of Experts on International Standards of Accounting and Reporting (ISAR) to produce their Guidance on Good Practices in BOARD DISCLOSURES Corporate Governance Disclosure. This internationally agreed benchmark consists of more than fifty distinct disclosure items The Board of directors should provide several mandatory across five broad categories: disclosures in its report related to risk management policy, compliance monitoring process, CSR initiatives, contracts with • Auditing; related parties, and so on. It should ensure that robust internal processes are in place to support the disclosures; non-compliance • Board and management structure and process; could have severe repercussions. • Corporate responsibility and compliance; One hopes that the final set of rules notified by the Government • Financial transparency and information disclosure; would address the grey areas and lay ambiguities to rest, giving and corporate governance a major boost. • Ownership structure and exercise of control rights. LEGAL ENVIRONMENT Former Chairman of the Board of General Motors John G. Smale Corporations are created as legal persons by the laws and regulations wrote in 1995: "The board is responsible for the successful of a particular jurisdiction. These may vary in many respects perpetuation of the corporation. That responsibility cannot be between countries, but a corporation's legal person status is relegated to management." A board of directors is expected to play fundamental to all jurisdictions and is conferred by statute. This a key role in corporate governance. The board has responsibility allows the entity to hold property in its own right without reference for: CEO selection and succession; providing feedback to to any particular real person. It also results in the perpetual management on the organization's strategy; compensating senior existence that characterizes the modern corporation. The statutory executives; monitoring financial health, performance and risk; and granting of corporate existence may arise from general purpose ensuring accountability of the organization to its investors and legislation (which is the general case) or from a statute to create a authorities. Boards typically have several committees (e.g., specific corporation, which was the only method prior to the 19th Compensation, Nominating and Audit) to perform their work. century. The OECD Principles of Corporate Governance (2004) describe In addition to the statutory laws of the relevant jurisdiction, the responsibilities of the board; some of these are summarized corporations are subject to common law in some countries, and below: various laws and regulations affecting business practices. In most jurisdictions, corporations also have a constitution that provides • Board members should be informed and act ethically and individual rules that govern the corporation and authorise or in good faith, with due diligence and care, in the best constrain its decision-makers. This constitution is identified by a interest of the company and the shareholders. variety of terms; in English-speaking jurisdictions, it is usually • Review and guide corporate strategy, objective setting, known as the Corporate Charter or the Memorandum and Articles of major plans of action, risk policy, capital plans, and annual Association. The capacity of shareholders to modify the budgets. constitution of their corporation can vary substantially. • Oversee major acquisitions and divestitures. The U.S. passed the Foreign Corrupt Practices Act (FCPA) in 1977, with subsequent modifications. This law made it illegal to bribe • Select, compensate, monitor and replace key executives government officials and required corporations to maintain and oversee succession planning. adequate accounting controls. It is enforced by the U.S. Department • Align key executive and board remuneration (pay) with of Justice and the Securities and Exchange Commission (SEC). the longer-term interests of the company and its Substantial civil and criminal penalties have been levied on shareholders. corporations and executives convicted of bribery. • Ensure a formal and transparent board member The UK passed the Bribery Act in 2010. This law made it illegal to nomination and election process. bribe either government or private citizens or make facilitating payments (i.e., payment to a government official to perform their • Ensure the integrity of the corporations accounting and routine duties more quickly). It also required corporations to financial reporting systems, including their independent establish controls to prevent bribery. audit.

19 • Ensure appropriate systems of internal control are • Balance of power: The simplest balance of power is very established. common and it requires that the President be a different person from the Treasurer. This application of separation of power is • Oversee the process of disclosure and communications. further developed in companies where separate divisions check • Where committees of the board are established, their and balance each other's actions. One group proposes company mandate, composition and working procedures should be wide administrative changes, another group reviews and can well-defined and disclosed. veto the changes, and a third group checks that the interests of people (customers, shareholders, employees), outside the Corporate governance mechanisms and controls are designed to three groups, are being met. reduce the inefficiencies that arise from moral hazard and adverse selection. There are both internal monitoring systems and external • Remuneration: Performance-based remuneration is monitoring systems. Internal monitoring can be done, for example, designed to relate some proportion of salary to individual by one (or a few) large shareholder(s) in the case of privately held performance. It may be in the form of cash or non-cash companies or a firm belonging to a business group. Furthermore, payments such as shares and share options, the various board mechanisms provide for internal monitoring. superannuation or other benefits. Such incentive External monitoring of managers' behaviour occurs when an schemes, however, are reactive in the sense that they independent third party (e.g. the external auditor) attests the provide no mechanism for preventing mistakes or accuracy of information provided by management to investors. opportunistic behaviour, and can elicit myopic conduct. Stock analysts and debt holders may also conduct such external • Monitoring by large shareholders and/or monitoring monitoring. An ideal monitoring and control system should by banks and other large creditors: Given their large regulate both motivation and ability, while providing incentive investment in the firm, these stakeholders have the alignment toward corporate goals and objectives. Care should be incentives, combined with the right degree of control and taken that incentives are not so strong that some individuals are power, to monitor the management. tempted to cross lines of ethical behavior, for example by manipulating revenue and profit figures to drive the share price of In publicly traded U.S. corporations, boards of directors are largely the company up. chosen by the President/CEO and the President/CEO often takes the Chair of the Board position for him/her-self (which makes it INTERNAL CORPORATE GOVERNANCE much more difficult for the institutional owners to "fire" him/her). CONTROLS The practice of the CEO also being the Chair of the Board is known as "duality". While this practice is common in the U.S., it is Internal corporate governance controls monitor activities and then relatively rare elsewhere. In the U.K., successive codes of best take corrective action to accomplish organisational goals. Examples practice have recommended against duality. include: EXTERNAL CORPORATE GOVERNANCE • Monitoring by the board of directors: The board of directors, with its legal authority to hire, fire and CONTROLS compensate top management, safeguards invested External corporate governance controls encompass the controls capital. Regular board meetings allow potential problems external stakeholders exercise over the organization. Examples to be identified, discussed and avoided. Whilst non include: executive directors are thought to be more independent, they may not always result in more effective corporate governance • Competition; and may not increase performance. Different board structures are optimal for different firms. Moreover, the ability of the board to • debt covenants; monitor the firm's executives is a function of its access to • demand for and assessment of performance information information. Executive directors possess superior knowledge of (especially financial statements); the decision-making process and, therefore, evaluate top management on the basis of the quality of its decisions that • government regulations; lead to financial performance outcomes, ex ante. It could • managerial labour market; be argued, therefore, that executive directors look beyond the financial criteria. • media pressure; and • Internal control procedures and internal auditors: • takeovers. Internal control procedures are policies implemented by an entity's board of directors, audit committee, FINANCIAL REPORTING AND THE management, and other personnel to provide reasonable INDEPENDENT AUDITOR assurance of the entity achieving its objectives related to reliable financial reporting, operating efficiency, and The board of directors has primary responsibility for the compliance with laws and regulations. Internal auditors corporation's external financial reporting functions. The Chief are personnel within an organization who test the design Executive Officer and Chief Financial Officer are crucial and implementation of the entity's internal control participants and boards usually have a high degree of reliance on procedures and the reliability of its financial reporting. them for the integrity and supply of accounting information. They

20 oversee the internal accounting systems, and are dependent on the information is the cost of processing it, especially to a corporation's accountants and internal auditors. small shareholder. The traditional answer to this problem is the efficient market hypothesis [in finance, the efficient Current accounting rules under International Accounting Standards market hypothesis (EMH) asserts that financial markets and U.S. GAAP allow managers some choice in determining the are efficient], which suggests that the small shareholder methods of measurement and criteria for recognition of various will free ride on the judgments of larger professional financial reporting elements. The potential exercise of this choice to investors. improve apparent performance increases the information risk for users. Financial reporting fraud, including non-disclosure and • Supply of accounting information: Financial accounts form a deliberate falsification of values also contributes to users' crucial link in enabling providers of finance to monitor information risk. To reduce this risk and to enhance the perceived directors. Imperfections in the financial reporting process will integrity of financial reports, corporation financial reports must be causeimperfections in the effectiveness of corporate audited by an independent external auditor who issues a report that governance. This should, ideally, be corrected by the accompanies the financial statements. working of the external auditing process. One area of concern is whether the auditing firm acts as both the CONCLUSIONS independent auditor and management consultant to the firm they are auditing. This may result in a conflict of interest which places the Whichever way we look, governance, public as well as corporate, integrity of financial reports in doubt due to client pressure to appears to be in a perpetual crisis mode. Public governance is appease management. The power of the corporate client to initiate unable to meet the rising expectations of the people, and often and terminate management consulting services and, more suffers from policy paralysis on account of being pulled in different fundamentally, to select and dismiss accounting firms contradicts direction by warring interest groups. This, no doubt, affects the concept of an independent auditor. Changes enacted in the corporate governance, which is beset with its own malaise of a United States in the form of the Sarbanes-Oxley Act (following peculiar kind of innovative greed. As Mahatma Gandhi said, there numerous corporate scandals, culminating with the Enron scandal) is enough on this earth for everyone's need but not for everyone's prohibit accounting firms from providing both auditing and greed. management consulting services. Similar provisions are in place under clause 49 of Standard Listing Agreement in India. To control the corporate greed, various countries are making more and more stringent laws to introduce transparency in their SYSTEMIC PROBLEMS OF CORPORATE functioning and enforce accountability. However, laws will never GOVERNANCE be enough, as novel methods to bypass them are being found all the time. The need of the day is to internalise the universal message of Some of the systemic problems of corporate governance may be sustainability in all its dimensions. The earlier we do it the better it listed as follows: would be for long term survival of all concerned. • Demand for information: In order to influence the directors, the shareholders must combine with others to *Dr. V.K. Agnihotri is an IAS officer of 1968 form a voting group which can pose a real threat of batch. He has Masters degrees in English carrying resolutions or appointing directors at a general Literature and Political Science from the meeting. University of Allahabad. • Monitoring costs: A barrier to shareholders using good

CSR spending likely to be Rs. 27,000 cr a year According to the Indian Institute of Corporate Affairs, of the 1.3 million companies in India, about 6,000-7,000 companies are covered under the new CSR rule as it is applicable only to companies that have a minimum net worth of ' 500 crore, turnover of ' 1,000 crore or net profit of ' 5 crore. The new Companies Act, 2013, which proposes that 2% of profits earned by a certain class of companies must be spent on corporate social responsibility (CSR) activities, would mean an estimated ' 27,000 crore will flow into grassroots development and social enterprise sectors every year. It is currently estimated that the average CSR spend currently is 1-1.25% of profits, while the Companies Act, 2013, prescribes 2%. While the new Act does not make this kind of a CSR spending compulsory, it mandates reporting any failure in meeting this target, creating social pressure on companies. While corporate affairs minister Sachin Pilot insists the new CSR rule is driven by the principles of self-regulation and self-disclosure, corporate leaders like Bajaj Group chairman Rahul Bajaj and Infosys vice-chairman Kris Gopalakrishnan have raised concerns over the government dictating terms on philanthropic initiatives of companies.

21 Are you looking for INDEPENDENT DIRECTORS We have a large database of qualified directors/professionals across all major industries to meet your requirements of suitable Independent Directors ENROLL NOW

Organization of Non-Executive Independent Directors (ONEID) is a wing of Institute of Directors (IOD) to promote and maintain a panel of suitable qualified Independent Directors for Corporate Boards. The new Company Law which is likely to be cleared soon by the Parliament, will make it mandatory for all registered companies, whether listed or unlisted, to have one-third of the Are you a Board as Independent Directors. IOD has already started receiving requests for CERTIFIED suitable CV's by organizations in different sectors. Initially, we proposed to panel all the professionals who have gone through and DIRECTOR? qualified in Masterclass for Directors, organized by IOD during the last over 9 years. In view of this, those desirous of joining the pool of Independent Directors are required to complete the ONEID Application form and send to us along with the full CV.

Organization for Non Executive Independent Directors (ONEID) INSTITUTE OF DIRECTORS M-52 (Market), Greater Kailash Part-II New Delhi – 110048, India Board Nos. : +91-11- 41636294 , 41636717, 41008704 Fax: +91-11- 41008705 • Email: [email protected] www.iodonline.com KNOWLEDGE IS POWER

To be equipped for the job at hand, directors need to know what's going on inside and outside of their organisation. Since it's the company secretary's role to ensure 'good information flows within the board and its committees and between senior management and non-executive directors' – they have a key role to play here. But getting this right isn't easy. Directors need two sources of Ignorance is Not Bliss information: the information that's regularly reported to them via the board pack and the information that they need to get out and source for themselves. Although the company secretary can support them with the latter, there's only so much they can do to encourage directors to talk to the men on the ground. Where the company secretary's role really comes to the fore, is ensuring that the formal, regular information that directors receive is of a high quality. And whilst there will be limits to what any board pack can achieve, it has an important role to play. The board pack can be instrumental in developing an organisation's information culture. And what gets discussed in the board meeting will be driven by the information in the board pack. A board pack that rarely reports the 'bad news', barely touches on Jennifer Sundberg developments outside of the business and doesn't go near the topic of company culture, is unlikely to stimulate a conversation about such things. It's a close call to know which profession is least trusted: the politician, the banker or the estate agent. This year saw politicians But despite the best of intentions, board packs tend to be the result pip the number one slot in an Ipsos MORI poll, with just 18% of of the data that's to hand. And with an overload of backward respondents 'trusting them to tell the truth'. But they only secured the looking financials and operational detail, it can be hard to see the top spot by a whisker: hot on their heels were Britain's business wood for the trees. To enable your board to have a forward-looking leaders. discussion about the things that really matter, they need the right information and in a readable form. So how do you get there? Given Libor rigging, the London Whale and horsemeat as blots on our corporate report card, it's not surprising that business leaders WHAT GOOD LOOKS LIKE? were a serious contender for the top spot in the poll. Big business has Instead of asking 'what do you want in your board pack?' – which earned itself a bad name. And the people at the helm of these tends to generate a shopping list of requests and an even larger organisations, would do well to remedy this mistrust. board pack – the right place to start is to ask 'what do you want from your board?' To help answer this question we recommend using the In the media furore that followed each of these scandals, business 'Six Conversations' model. leaders claimed ignorance. Jamie Dimon famously said “There was no lying” when JP Morgan's $2 billion trading losses came to light – The model helps the directors to consider the full gamut of their the board had simply been in the dark. And when cross-examined by role and to pinpoint in plain English, the value their board will add the Treasury Select Committee, Marcus Agius, Barclay's then to the company's strategy, performance and conduct – and from chairman, said he simply “didn't know” who had made the decision both a supervisory and stewardship standpoint. By asking the to sanction the Libor rate rigging. board how it wants to weight its time across the Six Conversations and what their distinct priorities are within each, you'll generate a Whilst it's comforting to know that corporate malpractice isn't rounded and robust brief for your board pack. necessarily the work of the board, their ignorance is alarming. And equally alarming are the boards that have been caught out by Board Intelligence 'Six Conversations' Model competition, changing consumer demands or technology. Kodak, HMV and most of the music majors all failed to respond to the Strategy Performance Conduct changing world around them, with their boards pursuing business models and strategies that were well past their sell by date. 1 2 3 What culture and policies should Do we have the right strategy ? Do we can work smarter ? define the way we work ? The people who ought to have known the ins and outs of their Stewardship organisation and their market didn't know or understand what was going on. For trust to be restored in the corporation and indeed, in the 4 5 6 business leaders themselves, society needs to be confident that we Is our Strategy on track ? Will we hit this year’s targets ? Are we working in the right way ? Supervision have the right people on our boards - and that they're equipped for job.

23 Being a director on a unitary board is no mean feat. They need to management you remove a monopoly on information and reduce juggle the two roles of 'supervisor' and 'steward'. And they need two the inclination to conceal critical developments in the first place. distinct forms of information to support them in this. As well as looking deep inside the organisation, Management As 'supervisor', they need to be able to see quickly and clearly Reports should look outside to benchmark performance against whether the company's strategy and the plans are tracking as peers and to monitor whether the market assumptions expected and – as highlighted by recent events – they also need to underpinning the strategy remain intact. By the time the boards of see whether business is being done 'in the right way'. This is what an HMV and the music majors faced up to the changing world around effective Management Report should do: it should help to keep the them, they were firmly on the back foot. Boards need to pick up on board's finger on the pulse and keep them abreast of what's going on trends as they emerge and a good board pack will help to enable within the business. that. By contrast, directors need quite a different style of information as DECISION AND DISCUSSION PAPERS 'steward'. Stewarding is not about 'policing', it's about shaping and enabling. A well-constructed set of Decision and Discussion Papers To take well informed decisions, the board need to be well briefed (often known as Non-Standing Items) should stimulate debate and in advance of the board meeting with a set of clear and robust enable smart decision making. Decision and Discussion Papers. THE MANAGEMENT REPORT Each paper should start by setting out on the first page the context for the paper, the question it addresses and the conclusion it An effective Management Report should begin with a company reaches. And of course it should also make explicit what you want dashboard to deliver the key messages that the rest of the report will from the board. All of this should be clear to the reader within the then expand upon, helping the board to isolate what really matters. first 30 seconds and the rest of the paper that follows should set out The body of the Management Report that follows must be broad the analysis that underpins the conclusion the author has reached. enough in scope to answer the questions on the mind of the board whilst being sufficiently clear and concise that it can be read from These papers must each be short enough that in combination with cover to cover in advance of the meeting. all of the other papers going up to the board they can be read and digested. For most papers, 2-3 carefully constructed pages The Management Report will consider progress against supported by a short appendix, should suffice. And rather than performance targets for this financial year and visibility of the dotting these papers throughout the board pack, they should be drivers of performance, to provide a clue as to the outlook for the grouped together to help the board focus on its stewardship role. business. But that's not all it must do. It should monitor progress against the major strategic initiatives, irrespective of the impact they RISING UP THE SCOREBOARD may have in this financial year, to encourage the board to think long, It goes without saying that a well-configured board pack isn't the as well as short, term. silver bullet for restoring trust in business. But what a high quality And the best Management Reports will capitalise on insight from board pack will do, is give directors visibility of the things that the workforce. A piece of research undertaken by Cass Business matters and enable them to take smarter, faster decisions. School exploring the near-death experiences of 21 companies from Only when our boards can demonstrate that they're in the know and Coca-Colato Shell, found that the source of their problems had been not crossing their fingers that something bad doesn't happen on well known within the organisation “but unknown to its leadership”. their watch, can we expect confidence in business to be renewed. Given the ease with which web-based surveys can be run, we And only then will we see business leaders rise up the trust score recommend polling a cross-section of your workforce every month board. to make it easy for them to flag the risks and opportunities that they can see, that management and the board cannot. *Jennifer Sundberg is the Managing A system of monthly surveys will also help to create a culture of Director of Board Intelligence, a openness and proactive reporting. By moving away from a system business she has led since its inception where information only flows through the single tracks of line in 2002.

Tough draft norms for Executive Pay Disclosure

In a stringent set of executive pay disclosure norms, the government on Friday, September, 20, 2013 proposed to make it mandatory for listed companies to give their rationale behind salaries and hikes given to top management personnel in comparison with business performance. The companies have already been asked to provide a ratio of the top management remuneration and the median employee salary on a yearly basis under the new Companies Act. Releasing detailed draft rules for the provision related to the appointment and remuneration of managerial personnel, the corporate affairs ministry proposed various measures like mandatory disclosure of parameters for any variable component of remuneration availed by the directors.

24 Building IOD Tomorrow’s Institute of Directors Boards

8th International Conference on CORPORATE SOCIAL RESPONSIBILITY on 17-18 January 2014, at Hotel ITC Windsor Manor, Bengaluru, India

Theme: 'Strategy To Leverage CSR For Competitive Advantage'

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 preferably spent near or around the areas in which the company operates

Also Presentation of Golden Peacock Awards for CSR (both National & Global) & Innovation Management

Chairman Chairperson Institute of Directors Global Steering Committee Justice M.N. Venkatachaliah Hon’ble Dr. M. Veerappa Moily The Rt. Hon. Baroness Verma Chairman, IOD Advisory Council Union Minister of Petroleum Parliamentary Under Secretary of & former Chief Justice of India and Natural Gas, Govt. of India State for Energy & Climate Change, UK

Supported by

The Institute of Cost Accountants of India www.iodonline.com Hon. P. Chidambaram, Union Saleh Ahmed Janeeh, Chairman, Dubai Quality Group, Shaikh Ahmed Bin Saeed Al Maktoum, President of Dubai Civil Aviation Authority, Chairman of Dubai Airports, and Finance Minister of India Chairman and Chief Executive of Emirates Airline at the IOD India’s Global Convention on CSR in Dubai. Also seen Justice M.N. Venkatachaliah, Chairman, IOD India addressing the Golden Peacock Awards Nite in New Delhi and former Chief Justice of India, H.E. Lokesh M Kapanaiah, Indian Ambassador to United Arab Emirates at the International Conference on CSR in Dubai Theme:'Strategy To Leverage CSR For Competitive Advantage' Justice M.N. Venkatachaliah Chairman, IOD Advisory Council and OBJECTIVES former Chief Justice of India • Boards to provide sound leadership and strategy for leveraging CSR, for the success of the enterprise. Invitation • Aligning and embedding CSR in business Strategy • Sustainability - an ethical imperative, based on Integrity Engagement, Accountability and Dear All, Social Responsibility. I have great pleasure in inviting you to the 8th • Diversity Disclosure and Transparency Social prerequisites for global trust and successful International Conference on Social Responsibility, being held on 17-18 January team work in 21st Century. 2014, at Hotel Windsor Manor, Bengaluru. The theme of this international conference is 'Strategy to Leverage CSR for Competitive Advantage'. • Corporate Ethics - Realigning the moral compass of the board. The International Standards organizations (ISO) issued the International • Social Accountability and need for an integrated Corporate Reporting System. Standard ISO-26000 in Nov, 2010, covering 'Guidance on Social Responsibility' , followed by Government of India’s (Ministry of Corporate Affairs) issued of National Voluntary Guidelines on Social, Environmental and Economic TOPICS Responsibilities of Business in July 2011. The guidelines use the term 1. Making CSR an Actionable Business Agenda 'Responsible Business' instead of CSR. Businesses have to endeavor to become responsible actors in society, so that every action leads to sustainable growth and a. CSR – A bridge between business and society. economic development. b. Social Responsibility Agenda - An emerging corporate strategic approach to building brands, reputation and trust. The best approaches to CSR have been so fragmented and disconnected from business and strategy, as to obscure many of the greatest opportunities for c. Business case for social responsibility companies to benefit society. If, instead, corporations were to analyze their d. Profiting from your business by turning it into a cause. prospects for social responsibility, using the same framework that guide their e. Budgeting CSR - Need of Company Act 2013 & Role of Govt. core business choices, they would discover that CSR can be more than a cost, a 2. Strategizing CSR – Creating Shared Value constraint, or a charitable deed - it can be a source of opportunity, innovation, and competitive advantage. a. Aligning and embedding CSR in business strategy. b. Business Social initiatives and community involvement strategy. The deliberations of our last International Conference on Social Responsibility, c. Strategy and society - the link between competitive advantage and CSR. held in Dubai on 'Making Corporate Social Responsibility an Actionable d. Business case for diversity in a social Resp Context. Business Agenda', underscored the importance of social issues in boosting the e. Dynamic nature of CSR Agenda capital markets. It was noticed that companies engaged in CSR, and clean and f. CSR- Reaching directly or through NGO’s green issues were thriving, despite a worldwide meltdown. From drawing board to boardroom, and to shop-floor, in this Conference we 3. Social Innovation for Economic growth and Business Sustainability. would like to examine the corporate strategies of a number of companies at the a. Social Innovation – Practical challenges and barriers in managing Strategic CSR. forefront of strategic CSR, as well as their alliance partners, and explore the b. Social dimension of business - Corporate conscience. evolution of corporate citizenship, and attempt to peep over the horizon to what's c. CSR a journey, an 'enlightened self-interest' - not a destination. next. The choice is no longer one of 'whether or not?' but rather of 'How to?' and d. Impact of CSR on equitable economic and social development. 'To what extent?' e. Socially responsible lobbying and investment, for developing sustainable social The reason for selecting Bengaluru as the venue is the unprecedented business programmes. opportunities offered by this fast growing entrepreneurial IT capital of India. f. Role of media in creating social innovations - the drivers of Economic growth. This international conference will provide a platform to interact with movers and g. Social Impact Assessments & Social Media shakers and CSR professionals, from around the world. 4. Corporate citizenship – CSR as new agenda beyond governance There are many ways you can contribute and benefit from the Congress - a. How to build brand through CSR initiatives. presenting your Business solutions and case studies for sustainability through b. Harness innovative energies of business for creating social value. social responsibility or, show casing your products, profiling your brand as a sponsor, exhibitor or advertiser or becoming a partner to promote the conference c. New culture of society centered business growth. among your contacts. Together, we could help promote your business strategy to d. Business social initiatives and community involvement strategy. include ‘CSR, as an Actionable Business Agenda’. e. CSR – stakeholders perspectives, transparency, ethics and trust. st I look forward to welcoming you, at this International Conference. 5. Social Accountability in 21 century a. Stake holder mapping and engagement for sustainability of business Yours sincerely, b. Engaging with stake holders and building partnerships. Justice M.N.Venkatchaliah c. Performance indicators for the societal and corporate benefits of CSR. d. Global CSR standards : Utilizing ISO 26000, SA-8000 and AAA-1000. e. Corporate Toolkit for CSR. f. Social Programmes - Monitoring & Evaluation. 6. Integrated Corporate Reporting a) Concept and principles of integrated reporting framework. b) Interconnected nature of environmental, social economic and governance factors in organization's reporting. c) Measuring benefits of CSR and Environment Management – Universal integrated standards for reporting on sustainability. R.Seetharaman Group Chief Executive Officer, Yogesh Chander Deveshwar, Chairman, Doha Bank, Qatar ITC Ltd, Addressing at IOD’s Conference Guidelines For Paper Presenters

All paper presenters are required to send their papers by e-mail to [email protected]. A brief CV of 100 words with passport size colour photograph are also required. Speaker guidelines are available on our website www.iodonline.com

Who Would Benefit

Ÿ Company chairmen, directors, presidents, CEOs, CFOs, bankers, fund managers, company secretaries, NGOs, investors, chartered accountants, management analysts, management students, financial consultants & academics Ÿ All stakeholders interested in protection of the well- being of society, generating profits and improving the quality of life. Ÿ Legislators, lawyers, jurists and all those concerned with efficient and ethical conduct of corporate and good governance. Ÿ Policy makers, political leaders, government officials and decision makers in emerging and developed economies. Ÿ Businesses - Corporate Large and Small & Medium Enterprises (SMEs)

Marketing Options

(a) Sponsorship The International Conference offers a unique opportunity to project your A Conference Souvenir Book will be released on the Inaugural Day of the c onference . organisation’s commitment to Corporate Social Responsibility. The event will be These will also be distributed to, members and associates, industry leaders, concerned attended by eminent corporate heads, social scientists, NGOs and opinion leaders govt departments, decision makers, eminent persons, NGO’s organizations, and standards from across the globe. institutions etc. worldwide. The tariff for A-4 size paper, colour Advertisement (297mm x 210mm with 3mm Sponsorship Rates are bleed all round) in the Conference Souvenir, is as under: Categories Indian (in ) International (in US $) Place Rate INDIAN (`) US ($) Principal Sponsor 10,00,000 17,000 Back Cover 75,000 1250 Platinum Sponsor 7,50,000 12,500 Inside Front Cover 60,000 1000 Gold Sponsor 5,00,000 8,500 Inside Back Cover 50,000 840 Silver Sponsor 3,00,000 5000 Full Page Color 40,000 670

Golden Peacock Awards The selection of award winners is an elaborate process done by a team of professional independent assessors. The short-listed finalist applicants are A Strategic Tool to Lead the Competition then submitted to a Jury of eminent people , known for their independence and impartiality headed by Dr Ola Ullsten, former Prime Minister of Sweden and Justice P N Bhagwati former Chief Justice of India,

Currently the Golden Peacock Awards Secretariat is inviting applications for the following institutional awards for the year 2013. • GOLDEN PEACOCK GLOBAL AWARDS

Golden Peacock Global Award for Corporate Social Responsibility • GOLDEN PEACOCK NATIONAL AWARDS

Mrs Rajshree Birla Receives Golden Peacock Golden Peacock Award for Corporate Social Responsibility Lifetime Achievement Award Golden Peacock Innovation Management Award Golden Peacock Awards, instituted by Institute of Directors in 1991, are now regarded as benchmark of Corporate Excellence worldwide. The above Golden Peacock Awards will be conferred during the Today Golden Peacock Awards Secretariat receives over 1,000 entries per year for 8th International Conference on CSR at Bengaluru on 17 January 2014 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 LAST DATE FOR SUBMISSION : 28th November 2013 achievements to build a brand.

The application forms and self-assessment criteria can be downloaded from website www.goldenpeacockawards.com

Presentation of Golden Peacock Awards on CSR in Dubai Audience REGISTRATION FORM

I am interested in participating in the “8th International Conference on Corporate Social Responsibility 2014" programme as a Delegate / Speaker / Sponsor / Partner / Advertiser ______

To register, please complete this registration form in BLOCK LETTERS and return it to the Conference Secretariat at the address below by email/post/fax, together with payment of all fees. Registration will not be effective, until the payment has been received. To register by email, please fill in Registration Form and e-mail to [email protected]. To book online, visit www.iodonline.com.

Name Dr/Mr/Ms______Designation ______Organization ______Address ______Postal Code______Country______Telephone ______Mobile ______Fax ______E-mail ______

FOR OVERSEAS PARTICIPANTS (who would need visa invitation letters) Name (as mentioned in the passport)______Passport No.______Valid up to______Citizenship______

Are you a member of IOD, India (Yes / No): ……………………………………………………......

PAYMENT DETAILS The total amount for INR ` /US $ ______may be paid by either of the following (please tick appropriate payment box): (A) Cheque at Par or Demand Draft payable to a bank in New Delhi, India , payable to Institute of Directors , New Delhi (B) Bank Transfer to Corporation Bank , M 3&4 , Greater Kailash Part-II , New Delhi- 48, India,Tel No. 011- 29210667 , Account Name : Institute of Directors ,A/C Type: Current A/C, 9-Digit Code No of the Bank and Branch (MICR Code) : 110017005 ,Account Number: 028600201002954, IFSC CODE: CORP0000286, PAN No. : AAABI0002J , SWIFT CODE:CORPINBB286 (C)Credit Card: Please log on to www.iodonline.com for online payment. ( Please enter the amount in INR)

(Signature ) Date: Name

Institute of Directors, India : Registration Package (Non-Residential Convention) Established in 1990, Institute of Directors, India is an independent, non-profit apex association of professional corporate directors. It has since grown to Includes Lunch, Dinner, Tea / Coffee, Refreshments and Literature for Conference associate with more than 30,000 senior executives representing prominent Proceedings & Souvenir etc. organisations from both the Private & Public Sectors and Govt. from India and abroad and is now globally, regarded as one of the premier organizations for Rate Indian (in `) International (in US $) development, training and networking of corporate directors to attain their Categories leadership role. Delegates 14,000 250

Institute of Directors, India's ‘Masterclass for Directors’, the training for Paper presenters 8000 150 ABOUT US corporate directorship and Golden Peacock Awards in 12 different disciplines and other flagship initiatives aim to improve the competitiveness of individual Students* 5000 100 Directors and their organizations. The 'Masterclass' programme prepares Accompanying Spouse 5000 100 participants to become Independent Directors of listed companies. Both have become global benchmarks. No business award today receives the kind of *For Student Registration - a Certificate from the Head / Registrar / Director indicating Studentship at the Institution / University would be required recognition and adulation among peers that the Golden Peacock does.

INSTITUTE OF DIRECTORS (India): M-52 (Market) Greater Kailash Part-II, New Delhi - 110048, India, Tel. +91-11- 41636294, 41636717, Fax:+91-11-41008705, Email: [email protected] Building Regional Offices: Tomorrow’s Mumbai: 1092-C Wing Oberoi Garden Estate, Chandivali, Andheri – East, Mumbai 400 072 IOD Ph: 022-40238141 / 40238142 / 40238143 • Email: [email protected] Institute of Directors Boards Bangalore: #201 , IInd Floor Oakland Apartments, Ulsoor 1st Cross Bangalore - 560042 Ph: 080-25092234, 255817101•Email: [email protected] world's citizens. I have the privilege of being active participant in developing inputs for this report at Asia-Pacific Region and Global Levels and discussing personally at regional level UN-meetings. These consultations elicited wide participation and engagement. THE SYNTHESIS OF ALL THESE IS Integrated Approach for PRESENTED IN THE REPORT The objective of this report is to provide a summary of the key Environmental Sustainability messages that emerged from the Global Thematic Consultation on Environmental Sustainability. Opportunities for engagement in the Consultation included a call for Discussion Notes, a Leadership Meeting, and 11 online discussions. With over 5,000 online members, the Consultation brought together a range of participants, including leading thinkers, members of academia and representatives from civil society and the private sector from around the world. Preliminary findings of the Consultation contributed to the preparation of the final report of the High-Level Panel on the Post-2015 Development Agenda, 'A New Global Partnership: Eradicate Poverty and Transform Economies through Sustainable Development'. The Panel's report contributed to ongoing intergovernmental processes aimed to help world leaders craft a universal agenda beyond 2015, an agenda that reflects the Pradeep Chaturvedi aspirations of people from around the world. Processes that will benefit from the Panel's report include the Open Working Group on the Sustainable Development Goals and the September 2013 The Post-2015 Agenda provides an opportunity to mobilise Special Event of the General Assembly on the Millennium partnerships, investment and urgent action to drive transformational Development Goals. change to put the world on a trajectory that stays within planetary boundaries. Environmental sustainability is simply not optional for The Environmental Sustainability Thematic Consultation has had the “World We want”. People around the world are calling for this two phases. During the exploratory first phase, stakeholders and ready to be part of the change. prioritized many topics for the dialogue. These topics were subsequently unpacked during the second phase. The result is a The narrative on environmental sustainability provides particular dialogue focused on the interlinkages of environmental reason for renewed optimism. No longer is the discussion focused sustainability and the economic and social considerations that primarily on preventing harm to the environment but also about how face the global community. environmental sustainability is fundamental to human development and wellbeing. There is recognition that poverty eradication is not a ROLE OF MARKETS AND PRIVATE SECTOR pre-condition for environmental sustainability but that these IMPORTANT ambitions must advance simultaneously. Environmental sustainability can no longer be addressed in a Silo. Based on the outcomes of the first phase and the Leadership Meeting, the second phase discussions centred on linkages Those engaged in this consultation chose to focus the discussion on between environmental sustainability and on key issues such as the linkages between environment sustainability and human poverty reduction, human rights, peace and security and equality. development rather then identifying a wish list of environmental The dialogue brought forward views on the role of markets and the goals. At the forefront of the discussions was the need for the Post private sector, underscored the importance of education in shaping 2015- Agenda to be based on the principles related to integrated a responsible citizenry and discussed the levels at which action approaches to development, equality, human rights and resilience in needs to take place. Contributions called for an ambitious and order to fully embed environmental sustainability. Expert universal agenda that retains sufficient flexibility to reflect consultations have finalized report titled “Breaking Down the different societal needs. Most importantly, it reflected the need for Silos”. The report focuses on Integrating Environmental transformation to address the challenges of inequality and resource Sustainability in the Post 2015 Agenda. degradation in order to realize the future people want within and across generations. THERE IS UNPRECEDENTED ENGAGEMENT IN SHAPING A UNIVERSAL POST-2015 The consultations have reflected a consensus that if AGENDA... we are to achieve the secure and sustainable future The United Nations (UN) has undertaken a wide-ranging, open people want, then the universal post-2015 agenda consultation to include the voices of people from around the globe in should apply an integrated approach, with crafting and implementing a sustainable, integrated, inspiring and environmental sustainability as a central tenet. While universal post-2015 agenda that is based on the aspirations of the this report aims to synthesize on the Thematic Consultation, the

29 conversation and engagement will need to continue—not only to education, health care, housing and security. 'Poverty eradication' keep the global community engaged, but also to translate the shared is not a precondition for 'environmental sustainability'—the two vision into a framework that can ensure environmental must advance simultaneously. However, policies and approaches sustainability by mobilizing global action and driving to providing immediate basic needs often fail to minimize their transformational change. impact on environment.8This has put development on an unsustainable trajectory. Therefore, getting this linkage right will ENVIRONMENTAL SUSTAINABILITY IS A be the 'make or break' of the post-2015 agenda. PRIORITY FOR ALL 'Poverty is the Greatest Polluter' Statement is being Challenged: From the many submissions to the Consultation, it is clear that Assumptions regarding linkages between poverty and people share a common vision for our future. This shared agenda environmental degradation are also being challenged. Though demonstrates that environmental sustainability is a priority for the poverty may force people to take desperate measures to eke out a North and South, women and men, old and young, private and public living, the statement that 'poverty is the greatest pollutant' needs to sector. The global discourse reaffirms that integration of the social, be refuted. In fact, contributors shared many examples, economic and environmental dimensions of sustainable experiences and initiatives of poor communities that built on development leads to multiple benefits. The discussion has traditional knowledge, land stewardship and technology in order to graduated from focusing on preventing harm to the environment to identify solutions for environmental sustainability. considering environmental sustainability to be fundamental to Population dynamics features significantly. Apart from increasing human development and well-being for the future people want. population numbers, the rapid movement of people to unplanned The urgency of transformational change was a message that comes urbanization was highlighted as a factor that is entrenching out strongly. This should translate into action at the country and conditions of poverty, environmental degradation and unhealthy local levels, action that over time will require a flexible and adaptive lifestyles. Given that two-thirds of the global population will live global and universal agenda. in cities by 2050, the post-2015 framework should ensure sustainable and healthy urban environments and include action on Therefore, rather than defining specific goals, participants directed slum improvements. Additional elements for consideration the dialogue towards the 'conceptual issues' and 'core principles' that include action on sustainable transport and urban living, including need to be embedded in the post-2015 agenda's set of goals, targets clean air and green spaces. and indicators. The linkages between environmental sustainability and the The dialogue broke environment out of its silo focusing on the ideal growing challenge of food and water insecurity are important and of integrated development solutions. This is embodied in the crucial. Sustainable agriculture and food security have been following four core principles needed to underpin the post-2015 identified as critical challenges for the post-2015 agenda, agenda—integrated development, equality, human rights, and particularly in the face of growing world population and increasing resilience. per capita food production. Food production is often environmentally destructive, causing groundwater depletion, Integrated Development: Integrating environmental sustainability topsoil loss, greenhouse gas emissions, pollution from fertilizers into development priorities (e.g. poverty reduction, health, energy, and pesticides, loss of habitat and declining biodiversity. Food sustainable livelihoods and food and water security) will influence a stocks today could feed all 7 billion people on Earth, but much food fundamental change in development and growth. The linkages is being wasted and food distribution is uneven. Regions among environmental and human development issues, particularly experiencing food scarcity today will remain vulnerable to food poverty and environment, are well understood and can be viewed insecurity particularly because of climate change, depletion of from several perspectives. The viewpoint on poverty and fresh water supplies and land erosion. These challenges must be environment linkages has shifted from recognizing that they exist to addressed by pursuing an environmentally sustainable providing integrated development solutions. intensification of agriculture – particularly among smallholder To capture the linkages between poverty and environment, poverty farmers, investments in the resilience to climate change, drastically needs to be viewed multi-dimensionally, involving deprivation of reduced losses in the food production chain, and promoting the resources for survival, livelihoods and well-being. Natural rapid, voluntary reduction of fertility. resources and ecosystem services were recognized as a fundamental Linkages between health and the environment were also identified. contribution to meeting basic needs (e.g. providing livelihoods, For example, there is the need to address and share responsibilities shelter, food and fresh water) and reducing income inequalities, for health risks from pollution and environmental degradation both in rural and urban settings. Recurring themes included equal associated with extractive industries. access and distribution of natural resources and getting the energy, food and water nexus right (in both the developed and developing Equality: Equality was identified as a principle for integrating world). It became evident that “environmental sustainability is non- environmental sustainability into the next development agenda. negotiable” for the continued provision of these services to people The importance needs to be realized of equal access to natural and to secure the future people want. resources, land rights and the benefits of a healthy environment as well as engagement in related decision making. The discussions The challenge is to ensure that environmental sustainability is also noted the challenges of increasing income inequality within factored into improving the lives of the poor, which entails and between countries. To ensure that development agenda increasing necessities such as food, water, energy, sanitation,

30 benefits everyone there is importance of monitoring and reporting ability to resist tomorrow's shocks without reversing today's mechanisms that use population data and indicators (e.g. achievements in human well-being. disaggregated by sex, age, rural/urban location, educational background and economic quintile). It was recognized that poverty The natural resources and ecosystems have a vital role to play in is also an expression of the inequalities within and between building resilience. Healthy natural environments (environments countries. The unsustainable consumption patterns and lifestyles of that have well functioning ecosystem services and species diversity those who benefit from today's development model are directly and abundance) are best able to support the poor. Secure land linked to poverty generation, the growth of inequality and threats to tenure, adaptive capacity, and healthy ecosystems reduce people's ecosystem services. Many participants repeatedly called for vulnerability to the effects of climate change and other shocks. This environmental justice due to unequal or unfair exploitation and the is particularly true for those living in poverty. commercialization of local natural resources related to corrupt The linkages between environmental sustainability and the power structures and private control over natural resources. resilience of communities also reinforce the importance of The unsustainable use of our planet's resources, stemming partly equality. It has been recognized that a resilient community is above from relentless consumption, production patterns and population all an equitable community. Profound inequalities and inequitable dynamics, pushes planetary boundaries to their limits and puts power structures cannot support environmental sustainability and intergenerational equality at risk. Though these risks are well- are therefore likely to undermine resilient communities. known, development continues to diminish our natural resource Considering the scale and impact of increasingly frequent wealth. environmental shocks, particularly as a result of climate change, There is further need to simultaneously advance gender equality and communities will continue to face an increasing cost from these environmental outcomes though actions such as improving access to shocks. Cities around the world, along with their crowded slums, clean water and sanitation, combating land degradation and are often located along coastlines and are particularly vulnerable to reducing deaths due to disasters and pollution. Backed by the 2011 floods, sea level rise and the increasing intensity of severe weather Human Development Report findings and evidence that women events. Extended drought periods empty national and regional food tend to show more concern for the environment and to support pro- stocks, and increasingly drive an exodus of disenfranchised environmental policies, it was concluded that increasing women's farmers to cities. It was recognized that if we are to foster greater involvement in decision-making is instrumental to addressing resilience, we need to live within our planetary boundaries. environmental degradation. Therefore, greater resilience recognizes the urgency and scale of the action needed to successfully protect and manage natural Human Rights: A key argument in favour of a human rights resources (e.g. dramatic reductions of greenhouse gas emissions in approach to sustainable development issues more broadly is that it order to stabilize and reverse the global warming trend). Local elevates the entire spectrum of sustainability, development and ecosystem based initiatives need to be fostered, as they promote environmental issues to fundamental values of society. A human innovation and build resilience in the three dimensions of rights-based approach to environmental sustainability recognizes sustainable development. that the realization of human rights depends on a healthy environment. For example, livelihoods of the rural poor often MDG DID NOT REFLECT LOCAL depend on natural resources and ecosystem services, so enjoyment SUSTAINABILITY MANIFESTATIONS OR of human rights is at risk from environmental hazards. Likewise, IMPLICATIONS urban dwellers, particularly those living in informal settlements, are disproportionately at risk from natural disasters, their vulnerability One of the most important reflections made on the MDGs, MDG-7 further exacerbated by the growing urban population, threatening in particular, was the poor integration of environmental the fulfillment of their human rights. sustainability and poverty reduction. Poverty reduction resources and efforts did not always include an environmental dimension. Furthermore, many recognized that a human rights approach Similarly, environmental measures operated in a silo, not relating provides minimum substantive standards for environmental to the root causes of poverty. Ultimately, poor integration of the sustainability, particularly when formulated as the human right to a environment into other sectors, development policies, institutions healthy environment. It was noted that although these standards and investment decisions has hampered and even reversed need to be clarified, Regional and national tribunals have begun to development achievements at all levels. build an extensive jurisprudence explaining the environmental duties that human rights place on States and other actors. Further As the international community focuses on a new global clarification of these obligations, from domestic policy to development agenda, there is a realization that the world has international negotiation, is needed for States and others to changed since the MDGs were formulated. In this regard, three understand them and ensure that they are met. It was also suggested specific challenges to environmental sustainability were that National Human Rights Institutions (NHRIs) should be consistently highlighted throughout the Consultation: population recognized as important actors in moving towards a human rights dynamics, consumption and production patterns and climate based approach to environmental sustainability. change. Resilience: Another fundamental principle often raised for fully Population Dynamics: The planet's population has been growing integrating environmental sustainability into the post-2015 exponentially over the past decade, and is likely to increase to over development agenda was the resilience of communities—their 9 billion people by 2050. Likewise, two thirds of the population is

31 predicted to live in cities by 2050. Taking population dynamics into ECONOMIC TRANSFORMATION account (including population size, growth, urbanization, ageing and migration) is necessary to understanding the scale and scope of The current growth-led economic model remains the most the development challenges to be faced during the lifetime of the significant challenge to sustainable development. An post-2015 development agenda. overemphasis on economic growth, has resulted in inequitable human development and can be detrimental to sustainable Consumption and Production Patterns: A related issue repeatedly development. referred to was the current and projected consumption and production patterns. Per capita consumption is expected to increase There are norms and values underpinning capitalist, socialist and as a consequence of continued communist systems as alternative economic output and growth. economic models that could bring Consumers and producers are “It was recognized that current, about greater equality. unsustainably diminishing the growth-led economic models Both the economic models and planet's natural resources—depleting generate environmental education systems need to integrate fish stocks, losing fertile soil and environmental sustainability more shrinking forests—and there are externalities that threaten the effectively in order to drive change. An already signs of the devastating effect foundations of these models. economic model needs to hbe promoted this will have on societies and Therefore, it is essential to adopt that would foster innovation and economies. This will crowd out the respond quickly to emerging challenges prospects of the poor and exacerbate approaches that decouple economic related to sustainability. inequalities that increase the risk of growth from environmental conflict. degradation in order to shift to a It was recognized that current, growth- led economic models generate Climate Change: Climate change is sustainable global development environmental externalities that the greatest threat to poverty trajectory” threaten the foundations of these reduction. It is also symptomatic of a models. Therefore, it is essential to fundamental developmental and adopt approaches that decouple economic growth from economic crisis. It is a 'threat multiplier', amplifying existing social, environmental degradation in order to shift to a sustainable global political, and resource stresses. The impacts of crossing 'planetary development trajectory. There is renewed optimism this is possible boundaries', especially climate change, hit people living in poverty if urgent action is taken. There are experiences and key innovations first and hardest, as they often depend directly on natural resources that could help drive change, and that as part of the post-2015 for their livelihoods and have the least resources available to agenda we need to urgently assess what is hindering the wider undertake adaptive action. application of such approaches so that barriers can be removed and Climate change and its development repercussions were noted and appropriate incentives put in place. recognized as exacerbating inequalities and poverty. Many Four key areas need to be highlighted to promote a transformative participants mentioned its impacts, particularly on food security and agenda: health. Furthermore, climate change was identified as a potential source of instability by leading to resource scarcity and mass • multi-dimensional measurements of growth and natural assets; migration, putting peace and security at risk. • inclusive green economy: There was overwhelming agreement on the need for urgent action and transformational change to put the world on a sustainable • private sector responsibility; and development trajectory that fully integrates environmental • sustainable consumption and production. sustainability and human development. A trajectory that moves the world to a future that applies integrated approaches to decisions that The multidimensional measurements of economic growth and affect human well-being, fully respects human rights, makes natural assets could be key drivers for transformation. As natural equality the norm rather than the exception and fosters societies that capital is traditionally unaccounted for in economic decision- are resilient to change and that operate within planetary boundaries. making, it remains greatly undervalued and depleted at unsustainable rates. It was noted that a continued focus on Key Areas where Change is Needed in Order to Address the Barriers economic growth as measured by Gross Domestic Product (GDP) and Drive the change: However, the full potential of these existing will not support the changes that are needed to foster capacities and experiences often remains untapped. There are environmental sustainability. There was thus a call to move beyond several key areas where change is needed in order to address the GDP. barriers and drive the change needed to unlock this potential: economic transformation, governance and accountability, local Public and private decision-making needs to have a stronger focus action and empowerment, and education. on valuing natural assets (e.g. natural resources, biodiversity and ecosystem services). Methods, tools and examples to accomplish We need to look at the ecological crisis we are faced with not only as this shift already exist, including applying integrated bottom-line a constraint, but also as an opportunity to leap forward. The crisis approaches, natural capital accounting and payment for ecosystem should not drive people apart, nor make them more unequal. A new services. However, some experts express concerns about placing and shared vision of mankind shall help us meet this challenge. an economic value on natural resources, highlighting the

32 difficulties inherent to accounting for natural asset's intrinsic change towards an environmentally sustainable future. The current cultural and aesthetic value. consumption and production patterns are not sustainable. Innovation in production, such as cradle-to-cradle, circular The role of governments to provide incentives for the private sector, economy and biomimicry, are approaches that need to be promoted consumers and investors to value environmental sustainability and and mainstreamed. Additionally, consumer education and access to natural assets need to be particularly highlighted. For example, information is of paramount importance. because there is no such thing as a value-neutral tax, taxes serve as an incentive or a disincentive. Therefore, tax systems should be GOVERNANCE AND ACCOUNTABILITY adjusted to ensure they are incentivizing sustainable behaviour. Governance shortcomings emerged as a significant barrier to A systemic change is needed to transition to an inclusive green achieving environmental sustainability. Environmental damage is economy—a sustainable and equitable economy. An inclusive green viewed as often being related to corruption, inadequate legislation, economy would need to be based on a premise of conservation of dysfunctional institutions, poor enforcement of existing biodiversity and ecosystems to be considered 'green'. legislation, insufficient information and inappropriate and A green economy should not be used to justify the transition to incomplete data informing ineffective policies and plans. renewable energy and reduced greenhouse gas emissions through However, governance is also seen as fundamental to driving means that could cause displacement, food insecurity, human rights transformational change, including through strengthened abuses, deforestation or irreversible damage to our health and the institutions, rule of law, transparency and accountability, social and planet. Rather, transitioning to an inclusive green economy needs to environmental justice and peace and security. simultaneously address inequalities and apply a multi-actor and Strengthened institutions and capacities across all levels are shared social responsibility approach. needed to provide an enabling The concept of natural capitalism was environment for multi-stakeholder referenced as an example of a staged “The businesses that are green and multi-level governance and engagement to support effective approach for economic transformation and champions and innovators are transitioning to an inclusive green and integrated decision-making. economy. Such an approach begins with outperforming those that do not Methods include incentives for dramatic increases in efficiency to buy collective action, finance time to implement more profoundly adapt quickly enough to the mechanisms that support sustainable measures, then moves to challenges of a changing integrated approaches and capacity building. redesign of how all goods and services are environment and produced and delivered, and finally a “Local civil society institutions transition to manage all institutions to be resource scarcity.” provide entry points for restorative of human and natural capital. development interventions to Private sector responsibility is critical to reach typically marginalized driving the change needed. Globally interconnected markets and constituents, including women, corporations powerfully influence natural resource decisions. All indigenous peoples, youth, and those prejudiced against on the types of businesses, including micro-, small, and medium basis of geography, caste, or ethnicity.” The rule of law and the role enterprises are the essence of economic societies, creating jobs and of governments in setting a policy and regulatory frameworks with providing households and public procurers with goods and services. clear rules were also identified as fundamental ingredients of A focus needs to be placed on corporate environmental and social success. Acceptable social and environmental standards for the responsibility. There was also a need for strengthening safeguards in private sector should be set and enforced at the local, national, the private sector in order to ensure protection of people and the regional and global levels. A global mechanism may be considered planet. that could establish, advocate and enforce minimum social and environmental standards. In particular, the need for enforcement of The businesses that are green champions and innovators are environmental standards related to trade and commerce needs to be outperforming those that do not adapt quickly enough to the emphasised. Environmental chapters of trade agreements are often challenges of a changing environment and resource scarcity. not enforced and not linked to binding global legislation, which Business response to demands and consumers' expectations varies presents a key challenge to achieving an environmentally widely, creating new opportunities for change. As the world sustainable future. evolves from private-sector accountability to private-sector engagement on matters of environmental sustainability, Additionally, legal empowerment of the poor is necessary to ensure governments must provide incentives for environmentally access to natural resources and land rights. The governments could responsible and growth-centric behaviours. In particular, proactively invest in land and resource tenure for local governments should create a business climate to encourage and communities as a pre-emptive measure to secure food, water and support sustainability innovation and leadership in micro-, small resources for the communities. and medium enterprises. Related to this is a strong call for full transparency and Related to the transition to an inclusive green economy, sustainable accountability in decision-making at all levels, with specific consumption and production are key drivers of transformational reference to natural resource management and extraction, trade and commerce. Access to information and public disclosure was seen

33 on'ble Shri Oscar Fernandes, Union Cabinet Minister, Government Of India Conferred the prestigious “Energy HAnd Environment Foundation Global Excellence Awards 2013” on Shri Pradeep Cahturvedi, Vice President, World Environment Foundation on the occasion of 4th World Renewable Energy Technology Congress-2013 on 25th September 2013, New Delhi, India. The Award is hosted by the energy and Environment Foundation

Shri Pradeep Chaturvedi Receives the Award (L to R) Shri Pradeep Cahturvedi , Hon’ble Shri Oscar Fernandes, Minister for Roads & Highways, Shri Anil Razdan, former Secretary (Power) and Shri Deepak Gupta, former Secretary, MNRE

as critical not only to enable stakeholders to engage in decision- inclusive rather than exclusive and should reflect diverse making, but also to inform individual decisions and behaviour (e.g. development pathways and implementation capacities. The empowering consumers with information on products). challenge then lies in contextualizing environmental sustainability and making the post-2015 agenda flexible so that it addresses Social and environmental justice and legal empowerment/remedies needs across countries and ensures that the common vision can needs to be emphasised. Several experts suggest the need for a translate into collective action. higher-level overseeing body, such as an international criminal court for environmental crimes, International Codes of Conduct (e.g. on The results of this global consultation make an important water issues), a global bill of rights supported by international legal contribution to laying the conceptual groundwork needed to mechanisms and global watchdogs, to supervise the state of the ensure that environmental sustainability is fully embedded in the environment and to ensure equitable distribution of environmental post-2015 agenda, both as a cross-cutting issue and as a resources. These would enable civil society to hold the public and development priority to be reflected in the next set of goals, targets private sector accountable for environmental impacts, affecting their and indicators. lives, livelihoods and health. Additionally, experts suggest strengthening legal empowerment for local communities through the Other issues, such as states' common but differentiated establishment of local environmental courts. Within the context of responsibilities, financing and means of implementation, the role social and environmental justice, linkages with environmental and impact of trade, financial markets and others need further sustainability and the role of governance in safeguarding peace and discussion and clarification before a comprehensive agenda can be security is significantly relevant. identified. These are daunting challenges that cannot be solved by member states acting alone. Fortunately, the process made it clear WHAT DOES THIS MEAN FOR THE POST-2015 that there is renewed optimism and that governments can count on AGENDA? civil society to be an active partner in shaping and implementing the post-2015 development agenda. The process elicited A vision for the future people want has been shared and there is unprecedented levels of participation in the World We Want consensus that achieving it requires environmental sustainability to consultations, demonstrating that people from around the globe be fully embedded in the post-2015 agenda. From the many inputs, want to work alongside governments to make the post-2015 it was possible to identify at least four fundamental principles that agenda reflective of their needs and aspirations and drive the bind together human development and environmental sustainability collective action that is urgently called for. and will thus need to underpin the post-2015 agenda To address the global challenges we face, all countries must embrace responsibilities and ownership. Participants agreed that the post- *Pradeep Chaturvedi is Vice-President, 2015 agenda needs to be a universal one: action and goals will be World Environment Foundation & Institute needed in all countries, not just developing countries, should be of Directors, India.

34 Building IOD Tomorrow’s Institute of Directors Boards

Institute Of Directors, India LONDON GLOBAL CONVENTION 2013 Incorporating 13th International Conference on Corporate Governance & Sustainability Presentation of Golden Peacock Awards & Global Business Meet 01 – 04 October, 2013, Hotel The Tower – A Guoman Hotel, London, E1W 1LD *PROGRAMME

Theme: “Principled Corporate Governance and Sustainability for Boardroom Effectiveness”

TUESDAY, 1ST OCTOBER, 2013 GLOBAL BUSINESS MEET & WELCOME DINNER 1900 – 2000 hrs

Venue: House of Lords, London SW1A 1LR - Peer's Dining Room

Welcome Address Lt Gen J S Ahluwalia, PVSM ( Retd), President, Institute of Directors, India

Chairperson The Rt. Hon. Baroness Verma, Parliamentary Under Secretary of State for Energy & Climate Change, Govt of UK

Special Address Dr. Sutanu Behuria, IAS, Secretary, Dept. of Heavy Industries, Govt. of India Ron Somers, President, US–India Business Council Sunil Kanoria, Vice Chairman, SREI Infrastructure Finance & Sr. Vice President, ASSOCHAM, India R. K. Dubey, Chairman & Managing Director, Canara Bank, India R.K. Gupta, Chairman-cum-Managing Director, WAPCOS Ltd.,India Navin Raheja Chairman and Managing Director, Raheja Developers, India

Guests of Honour Lord Rana MBE, Baron of Malone and MD, Andras House Ltd., UK Cllr Tony Ball, Leader of the Basildon Borough Council, UK Hon'ble Mr A. A. Jinnah, Member of Parliament, India

Chief Guest Hon'ble Mr Ajit Singh, Union Cabinet Minister for Civil Aviation, Govt. of India

BANQUET DINNER 2030 hrs

35 WEDNESDAY, 2ND OCTOBER, 2013

Venue: Hotel The Tower – A Guoman Hotel, St. Katharine's Way, London E1W 1LD

Registration & Welcome 0800 – 0845 hrs Morning Refreshments

Plenary Session I Opening Session 0900 –1000 hrs

Welcome address Lt Gen J S Ahluwalia, PVSM ( Retd), President, Institute of Directors, India Special Address The Rt Hon Lord Swraj Paul, PC, Chairman, Caparo Group, UK Vindi Banga, Sr. Partner, Clayton Dubilier & Rice and Independent Director of Thomson Reuters, Marks & Spenser, Maruti & former Chair Hindustan Unilever

Guest of Honour Hon'ble Mr A. A. Jinnah, Member of Parliament, India Chief Guest The Rt. Hon. Baroness Verma, Parliamentary Under Secretary of State for Energy & Climate Change, Govt of UK 1000 - 1015 hrs Special Session 1A India's New Company Law 2013 Nesar Ahmad, Advisor, Institute Of Directors, India and Immediate Past President, Institute of Company Secretaries of India

Principled Corporate Governance and Sustainability for Plenary Session II 1015 – 1115 hrs Boardroom Effectiveness

Panel Discussion ·Leveraging a high performance Board for Sustainability ·Principle based Corporate Governance – emerging dimensions. ·Rethinking Governance for Sustainability – Towards Board Leadership

Chair / Moderator Jon Sibson, Pro- Vice Chancellor & Dean, Business School, University of Greenwich, UK and former Partner at PricewaterhouseCoopers

Panelists Mohd. Abdullah Yusuf, Chairman, Pakistan Institute of Corporate Governance Anoop Mittal, CMD, National Buildings Construction Corporation. India R. K. Dubey, Chairman & Managing Director, Canara Bank, India S. C. Mohanty, President, The Institute of Cost Accountants of India Ken Rushton, Senior Consultant, Board Insight & former Director of Listing and Head of the UK Listing Authority at Financial Services Authority (FSA)

Tea / Coffee 1115 – 1145 hrs

Plenary Session – III Leadership for Creating Value through Good Governance and 1145 – 1300 hrs Business Excellence

Panel Discussion ·Creating value through Corporate Governance ·Evolving effective board leadership and governance structures ·Organizational leadership and challenges of Business Excellence ·Role of Social media in engaging with stakeholders and supply chain ·Role of Boards and CEO's in the turn-round of enterprises

Sue Milton, Corporate Governance Lead, Incoming Thought Ltd, UK and Chair / Moderator former Advisor at Bank of England

36 Panelists Navin Raheja Chairman and Managing Director, Raheja Developers, India Prof Colin Coulson-Thomas, Chairman, Adaptation Ltd. UK Paul Moxey, Head of Corporate Governance and Risk Management, ACCA, UK Dr Rosamund Thomas, Director Centre for Business & Public Sector Ethics UK Nish Kotecha, Chairman, Asian Business Association, London Chamber of Commerce, UK

Lunch 1300 – 1400 hrs

Plenary Session – IV Boardroom Strategies for Managing Risk and Preventing Frauds 1400 –1515 hrs

Panel Discussion • Board Level Risk Review Process-risk centric internal audit • Corporate Strategy for fostering risk management culture, to prevent fraud and Corruption • Increasing rising role of CFOs in Sustainability & Social Innovations • Board Evaluation Practices

Chair / Moderator Jennifer Sundberg, Managing Director, Board Intelligence, UK

Panelists Dr Paul Robertson, Director, Crisis Leadership, PricewaterhouseCoopers, UK Sanjay Anand, Chairperson, SOX, GRC and CMP Institutes, USA Margherita Bianchini, Deputy Director General and Head of Corporate Legal Affairs, Assonime, Italy Cristina Ungureanu, Corporate Governance Advisory, Sodali, Italy

Tea / Coffee 1515 – 1545 hrs

Plenary Session – V Rejuvenating economy through Sustainability 1545 – 1700 hrs

Panel Discussion • Transforming strategy to scale up green Growth solutions • Sustainability strategy – Post Rio + 20 & Beyond • The Social Template – Strategic Planning for Social Sustainability

Chair / Moderator Jennifer Copestake, Senior Producer, BBC World Service, UK

Panelists Dr. R. Seetharaman, Group Chief Executive Officer, Doha Bank, Qatar Jonathan Garrett, Director CSR, Jaguar Land Rover, UK Fiona Woods, Head of HR, Europe, Cognizant Technology Solutions, USA Ann Cairns, President - International Markets, MasterCard, USA Philip Monaghan, Founder, Infrangilis, UK & Author of Lobbying for Good Joss Tantram, Partner, Corporate Sustainability, Terrafiniti LLP, UK

Plenary Session - VI The Future of Sustainability Reporting 1700 – 1800 hrs

Panel Discussion • International integrated Reporting Initiative – A Paradigm shift

37 • IFRS and Financial disclosure – Assessing Corporate Performance and profitability, Triple Bottom Line accounting, pricing natural and social capital in development • Global Reporting Initiatives (GRI) – Making compliance and performance more accountable through non-financial reporting and Business Responsibility Reports Chair / Moderator Sunil Misser, CEO, AccountAbility

Panelists Jessica Fries, Director, International Integrated Reporting Committee, UK Eileen Kaufman, Executive Director, Social Accountability International, USA David Pritchett, Head of Europe, AccountAbility Charlotte Wolff, General Manager– Corporate Responsibility, ArcelorMittal, UK Manoj Sonawala, GM & Company Secretary, TATA Services Ltd, India

Cocktails & Networking 1800 – 1845 hrs

Plenary Session - VII GOLDEN PEACOCK AWARDS NITE 1845 hrs

Introduction Dr. Graham Wilson, Leadership and Organization Development ,OXFORD, UK

Welcome Address Lt Gen J S Ahluwalia, PVSM (retd), President, Institute of Directors, India

Special Address Atul Chaturvedi IAS, Chairman, Public Enterprises Selection Board, India Milind Kangle, Group CEO, Lycamobile, UK Guest of Honour The Rt. Hon. Baroness Verma, Parliamentary Under Secretary of State for Energy & Climate Change, Govt of UK

Chief Guest Hon'ble Mr Ajit Singh, Union Cabinet Minister for Civil Aviation, Govt. of India

IOD's Distinguished Atul K Chauhan, President, Amity Education Group, India Fellowship & acceptance address Leadership Award & Subaskaran Allirajah, Executive Chairman, Lycamobile acceptance address Presentation of Golden Peacock Awards for Corporate Governance, Sustainability & HR Excellence

Banquet Dinner 2045 hrs

THURSDAY, 3RD OCTOBER, 2013

Venue: Hotel The Tower – A Guoman Hotel, St. Katharine's Way, London E1W 1LD

Morning Tea / Coffee & 0800 hrs Refreshments

Stories of Good Corporate Governance Practices Plenary Session - VIII Case study presentations by Award Winners 0830 – 1000 hrs

Chair G. Sai. Prasad, IAS, Joint Secretary, Ministry of Power, Govt. of India, Chairman and Managing Director, NHPC Ltd.

38 Presenters 1. E. I. DuPont India Pvt. Ltd 2. The New India Assurance Company Limited 3. Mahindra & Mahindra Financial Services Ltd. 4. Oil & Natural Gas Corporation Ltd., India

Plenary Session – IX Social, Economic and Environmental Sustainability 1000 - 1115 hrs

Panel Discussion • Sustainable Capitalism – creating shared values • Sustainable Business Growth through Green Economy • Investing in Environmental skills and Occupational Health & Safety • Drivers of social and environmental dimensions of Sustainability

Chair / Moderator Yvo de Boer, KPMG's Special Global Advisor on Climate Change and Sustainability, and former Executive Secretary of the United Nations Framework Convention on Climate Change

Panelists Tim Balcon, Chief Executive, Institute of Environmental Management and Assessment (IEMA) Manish Singh, Regional Head- Health & Safety, South Asia, MENA, Standard Chartered Bank Stephanie Draper, Executive Director, Forum for the Future, UK Jae Mather, Director of Sustainability, HW Fisher & Company Dr Gilbert Fayl, President, The Global Round Table, Belgium Sune Skadegaard Thorsen, CEO, GLOBAL CSR, Denmark Harpreet A De Singh, Head -Corporate Quality, Safety & EMS, Air India Ltd.

Tea / Coffee 1115 – 1130 hrs

Driving effective Leadership & Governance for Public Plenary Session – X Sector Enterprises 1130 – 1215 hrs

Special address Sir Leigh Lewis KCB, former Permanent Secretary at the Department for from UK Perspectives Work and Pensions. Currently visiting fellow at University of Greenwich and Independent Director on the Boards of Aviva, Serco and PricewaterhouseCoopers

Special address Ashishkumar Chauhan, MD & CEO, Bombay Stock Exchange, India from India Perspectives Special Address Helen Brand OBE, Chief Executive, ACCA (Association of Chartered from Global Perspectives Certified Accountants)

Plenary Session - XI Stories of Good Corporate Governance Practices 1215 – 1315 hrs Global Prospective

Chair Nigel Boardman, Partner, Slaughter and May, UK

Speakers R.K. Gupta, Chairman-cum-Managing Director, WAPCOS Ltd.,India Kathleen Gibson, VP and Corporate Secretary, Campbell Soup Company, USA Iñigo Elorriaga, Head - Corporate Governance, IBERDROLA, Spain Peter Swabey, Director – Policy & Research, Institute of Chartered Secretaries and Administrator, UK

Lunch 1315 – 1400 hrs

39 Principled Corporate Governance: A Game Changer for Plenary Session – XII Sustainable Strategies 1400 – 1500 hrs

·International Corporate Governance at the Crossroads ·Extending Governance to SMEs and Family Businesses ·Engaging Stakeholders & Improving Stakeholder's communications

Chair / Moderator Deepak Lalwani, OBE, Founder & Director, Lalcap Ltd.

Panelists Prof Isobel N Sharp CBE, Adviser to Deloitte LLP, UK Peter Bonisch, Managing Director, Paradigm Risk, UK Paul Palmarozza, Partner, Principled Business, UK Rakesh Singh, Immediate Past President of the Institute of Cost Accountants of India Harby Janagol, International Director, Invest UK

Plenary Session – XIII Peterborough Environment City: A Role Model for Business 1500 – 1600 hrs

Chair / Moderator Gr. Uff. Cllr Marco Cereste, Leader of Peterborough City Council

Supported by Steve Bowyer, Head of Economic Development, Opportunity Peterborough, UK

Panelists Nitin Patel, Chief Executive Officer, Redring Xpelair, UK A case study from a major Peterborough-based environmentally-focused manufacturing company

John Harrison, Managing Director, Blue Sky Peterborough, UK A look at the UK's first public sector green micro-utility

Charles Crawford, Director, LDA Design LLP, UK A case study from a successful local energy services company Tea/ Coffee Break 1600 – 1630 hrs

Sustainability in Action: Success Stories Plenary Session – XIV Case study presentations 1630 – 1745 hrs

Chair Harbhajan Singh, IAS, Jt. Secretary, Deptt. of Heavy Industry, Govt. of India and Chairman & Managing Director, HMT Ltd., India Presenters 1. Mahindra & Mahindra Automotive Sector 2. Engineers India Ltd. 3. Volkswagen AG, Germany 4. TATA Steel Limited, Mines Division, India 5. Reliance Industries Ltd., Nagothane Manufacturing Division 6. NTPC Limited

Close of Programme on 3rd Oct.

40 FRIDAY, 4TH OCTOBER, 2013

Business Study Tour & Industry Visit to Basildon Borough Council Basildon Borough Council, St. Martin's Square, Basildon, Essex SS14 1DL

Home to more than 6,500 businesses employing over 77,000, and over 175,000 residents, Basildon is the second largest economy in the Thames Gateway region outside of Canary Wharf. The borough is also home to a large number of SMEs as well as international names such as Ford Motor Company (automotive research and development), Selex ES (military guidance systems and civil aeronautics), Konica Minolta (printing) and New Holland Agriculture (leading tractor manufacturing). Just 8 miles from the M25, the major motorway around London, the borough is within easy reach of London City, London Southend and London Stansted airports and is only 5 miles from the site of DP World's London Gateway port, the UK's newest deep-sea port. Basildon presents a modern face for modern times.

Visit Programme

Coach to Basildon Coach departs from Tower Hotel (near Tower Bridge) 0845 hrs Basildon Council officers to join delegation on coach, giving a tour of the borough en-route Arrive in Basildon 0945 hrs

Welcome Address Cllr Tony Ball 1000 - 1130 hrs Leader, Basildon Borough Council Bala Mahendran Chief Executive, Basildon Borough Council

Special Address Richard Howitt MEP, European Parliament, UK R.K. Gupta, Chairman-cum-Managing Director, WAPCOS Ltd., India

Industry Visit Tour of Prospects College – leading vocational training provider 1130 - 1230 hrs Tea/ Coffee Refreshments

Coach Tour Group departs on Coach tour of Basildon 1230 - 1330hrs Coach tour of Basildon including visit to Housing Development Projects

Networking Lunch Wat Tyler Green Centre for Buffet Lunch 1330hrs Welcome and networking with members of Basildon Business Group End of Visit, Depart to London

41 Golden Peacock LEADERSHIP AWARDS

NOMINATIONS OPEN Apply Now

The Rt. Hon. Baroness Verma Kumar Mangalam Birla Anil Agarwal Azim H Premji Analjit Singh Dr. Ramdas M. Pai Sir Adrian Cadbury Rajashree Birla

Kishore Biyani A.M. Naik Ravi Kant M.G. George Muthoot Vinita Bali Alexandre Jetzer Malvinder Singh Naina Lal Kidwai

Golden Peacock Awards, instituted by Institute of Directors in 1992, The complete profile needs to be submitted along with all achievements are now regarded as benchmark of Corporate Excellence worldwide. at [email protected] Today Golden Peacock Awards Secretariat receives over 1,000 entries per year for various awards, from 25 countries worldwide. The Golden Award Presentation during the Peacock Awards has been instituted to celebrate and honour the best of best as recognition of their unique achievements to build a brand. 8th International Conference on The selection is an elaborate process done by a team of professional Corporate Social Responsibility independent assessors. The short listed finalist applicants are then on 17-18 January 2014, submitted to a jury of eminent people known for their independence and at Hotel ITC Windsor Manor, Bengaluru (India) impartiality headed by Dr Ola Ullsten, former Prime Minister of Sweden and Justice P N Bhagwati former Chief Justice of India. Individual Leadership Awards are determined through nomination only, based on complete career profile and achievements.

DETAILS: www.goldenpeacockawards.com

Details: Building Golden Peacock Awards Secretariat Institute of Directors IOD Tomorrow’s M-52 (Market), Greater Kailash Part - II, New Delhi-110048, India Institute of Directors Boards Tel: 011 - 41636717, 41636294, 41008704 • Fax: 41008705 Email: [email protected] • www.goldenpeacockawards.com

Date Publication: 5th October 2013 Postal Registration No.: DL (S)-01/3051/2013-2015 Date of Posting: 6th - 7th October 2013 RNI No.68701/95

Printed and published by J.S.Ahluwalia, President on behalf of Institute of Directors at Maximus Packers. 49 - DSIDC Okhla Phase - 1, New Delhi and published at M-52 (Market), Greater Kailash-II, New Delhi - 110048