Corporate Social Responsibility Overview

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Questions and Answers

What is the primary goal of Corporate Social Responsibility (CSR)?

To maximize profits for the organization only

To engage in short-term philanthropy

To maximize positive societal impact and minimize negative impact (correct)

To minimize legal compliance requirements

Which of the following best distinguishes CSR from corporate philanthropy?

Philanthropy involves environmental stewardship

CSR is only about donations

CSR meets stakeholder expectations while philanthropy is voluntary (correct)

Philanthropy focuses on long-term sustainability

Which aspect is NOT involved in the CSR methodology assessment?

Employees

Customers

Environmental impact

Market share growth (correct)

What does corporate philanthropy primarily focus on?

Voluntary charitable activities and human causes Signup and view all the answers

Which of the following is a responsibility of corporations in terms of social accountability?

Acting as a good citizen by donating to public causes Signup and view all the answers

In what aspect does CSR promote environmental stewardship?

By assessing environmental impacts and taking responsible actions Signup and view all the answers

How does engaging in CSR benefit a corporation in the long-term?

By enhancing reputation and stakeholder relationships Signup and view all the answers

What are 'the 3 Ps' that CSR focuses on?

People, Profit, and Planet Signup and view all the answers

What is the minimum percentage of average net profits that a company must spend on CSR activities according to the policy?

2% Signup and view all the answers

Which committee is responsible for formulating and recommending the CSR policy to the Board?

CSR Committee Signup and view all the answers

What must the company do if it fails to spend the required CSR amount for a financial year?

Specify the reasons in its report Signup and view all the answers

Within how many days must unspent CSR amounts be transferred to the 'Unspent CSR Account'?

30 days Signup and view all the answers

What is the maximum duration for utilizing the amount in the Unspent CSR Account?

Three financial years Signup and view all the answers

What does the CSR Policy need to include according to the requirements set by the CSR Committee?

Activities specified in Schedule VII Signup and view all the answers

Which model of CSR focuses on a voluntary commitment by companies to public welfare?

Ethical Signup and view all the answers

What should a company prioritize when spending its CSR funds?

Local area and surrounding regions Signup and view all the answers

Which of the following is NOT a responsibility of the Board regarding the CSR Policy?

Monitor employee performance Signup and view all the answers

What is a primary characteristic of the Liberal model of CSR?

Corporate responsibilities are primarily to shareholders. Signup and view all the answers

Which of the following is NOT listed as an advantage of implementing CSR?

Increased monopoly power Signup and view all the answers

According to the CSR regulations in India, what is the minimum net profit a company must have to require a CSR committee?

Rs. 5 crore (Rs. 50 million) Signup and view all the answers

Which driver of CSR pertains to the perceptions and attitudes of the public towards a company?

Public Image Signup and view all the answers

What primary purpose does Section 135(2) of the Indian Companies Act serve?

To require a disclosure in the Board’s Report Signup and view all the answers

What is the penalty for a company that defaults in complying with the CSR provisions?

Twice the amount unspent or one crore rupees, whichever is less Signup and view all the answers

Which of the following is NOT specified as a CSR activity in the content provided?

Investing in technological advancements for businesses Signup and view all the answers

In which model of CSR do companies primarily respond to the needs of various stakeholders?

Stakeholder Signup and view all the answers

Which of the following factors is NOT a recognized driver of CSR?

Technological Advancement Signup and view all the answers

What is one of the specified CSR activities related to women's empowerment?

Promoting gender equality and setting up homes for women Signup and view all the answers

What must a company do if it fails to spend the required amount on CSR activities by the end of the third financial year?

Transfer the unspent amount to a specified Fund within 30 days Signup and view all the answers

Which of the following activities is related to ensuring environmental sustainability as per the content?

Conservation of natural resources and maintaining air quality Signup and view all the answers

What is the maximum penalty for an officer of the company in default of CSR spending?

Two lakh rupees or one-tenth of the unspent amount, whichever is less Signup and view all the answers

Which initiative is associated with the objective of promoting sanitation as outlined in the CSR activities?

Swach Bharat Kosh Signup and view all the answers

Which of the following objectives is aimed at historically significant sites as part of CSR activities?

Protection of national heritage and historical importance Signup and view all the answers

Study Notes

CSR refers to the actions businesses take beyond legal requirements to address their interests and the interests of society.
It's about maximizing positive impact and minimizing negative impact on society.

CSR vs. Philanthropy

CSR aims for long-term sustainability, focusing on profits, people, and planet.
Philanthropy is about charitable activities, often focused on human causes.
CSR is about meeting stakeholder expectations.
Philanthropy is voluntary in nature.

Corporations are accountable to society in a democratic system.
Companies have a responsibility to behave like good citizens and contribute to public welfare.

Elements of CSR

Community outreach: involves investing in the community where the company operates.
Employee relations: encompasses how the company treats its employees.
Employment creation and maintenance: focuses on creating and sustaining jobs.
Environmental stewardship: means protecting the environment and using resources responsibly.
Financial performance: is a core aspect of CSR, as it allows companies to sustain their social and environmental efforts.

CSR Methodology

This process assesses an organization's impact on society and evaluates its responsibilities.
It assesses the impact of the business on various stakeholders including:
- Customers
- Suppliers
- Environment
- Communities
- Employees

Models for CSR Implementation

Ethical Model: Companies voluntarily commit to public welfare (Mahatma Gandhi).
Statist Model: The state determines corporate responsibilities through legal requirements and state ownership (Jawaharlal Nehru).
Liberal Model: Corporate responsibilities are limited to private owners and shareholders (Milton Friedman).
Stakeholder Model: Companies respond to the needs of all stakeholders, including customers, creditors, employees, communities, etc. (R. Edward Freeman).

Advantages of CSR

Improved financial performance.
Enhanced brand image and reputation.
Increased sales and customer loyalty.
Improved ability to attract and retain employees.
Reduced regulatory oversight.
Innovation and learning opportunities.
Enhanced risk management.
Easier access to capital.
Reduced operating costs.

Drivers of CSR

Public image and perception.
Government regulations and policies.
Survival and future growth of the company.
Employee satisfaction and motivation.
Consumer awareness and preferences.

CSR Law in India

Section 135 of The Indian Companies Act 2013: (effective 1st April 2014).
The Companies (CSR Policy) Rules 2014: (effective 27th February 2014).
Circulars, Notifications and FAQs: provide further guidance and clarifications.

Key Provisions of Section 135

Scope: Applies to companies meeting certain financial thresholds (Net Worth of Rs. 500 crore, Turnover of Rs. 1,000 crore, or Net Profit of Rs. 5 crore).
CSR Committee: Companies must establish a committee of at least three directors (including one independent director).
CSR Policy: The committee develops a CSR policy outlining activities and the amount to be spent on CSR initiatives.
Board Approval: The Board approves the CSR policy and discloses its contents in the company's report and website.
Expenditure: Companies must spend at least 2% of their average net profits over the previous three years on CSR activities.
Local Area Preference: Companies should prioritize local areas and areas surrounding their operations for CSR spending.
Unspent Amount: If a company fails to spend the required amount, it must transfer the unspent amount to a specified fund or a dedicated "Unspent CSR Account".
Penalties: Companies failing to comply with the provisions are subject to penalties, including twice the unspent amount or Rs. 1 crore, whichever is less.

Specified CSR Activities (Schedule VII of the Companies Act, 2013)

Eradicating hunger, poverty, malnutrition, promoting healthcare, and providing safe drinking water.
Promoting education, including special education and employment-enhancing skills.
Promoting gender equality, empowering women, setting up homes for women and orphans, and providing facilities for senior citizens.
Ensuring environmental sustainability, ecological balance, and animal welfare.
Protecting national heritage, art, and culture.

### Remember that this should only be considered as an initial stepping stone for your own studies. It gives a good overview of the topic, but there is much more to learn about CSR!

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Description

This quiz explores the concept of Corporate Social Responsibility (CSR) and its differentiation from philanthropy. It examines key elements like community outreach, employee relations, and the importance of social responsibility in corporate accountability.