unit 2 : Ethical theories and CSR
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This document discusses various ethical theories and their relationship to corporate social responsibility (CSR). It describes virtue ethics, utilitarianism, Kantianism, and contrasts individual versus social ethics. The document then defines CSR and explains how CSR relates to the triple bottom line of economic, social and environmental obligations. It discusses the drivers of CSR both from internal stakeholders like management as well as external stakeholders. The document also outlines the CSR requirements under the Indian Companies Act of 2013.
unit 2 : Ethical theories and CSR
- 1. ETHICAL THEORIES & CSR. Prepared by Mr. B.M.Naik, Teaching Asst. Dept. of Studies in Commerce Rani Channamma University, Belagavi PG Centre, Jamkhandi.
- 4. Virtue ethics: • Concept of virtue ethics: it speaks about traits or character of organisation or individual that directly or indirectly impact on behaviour of organisation of individuals. • Virtue ethics is a broad term for theories that emphasize the role of character and virtue in moral philosophy rather than either doing one’s duty or acting in order to bring about good consequences.
- 5. Contents of virtue ethics: • Positive attitudes • Courage and forgiveness • Friendliness • Loyal, self control • Creativity • Tolerance • Broad minded • Straight forward
- 7. Socialism v/s Individual Ethics: • Socialism :a political and economic theory of social organization which advocates that the means of production, distribution, and exchange should be owned or regulated by the community as a whole. • The term socialism refers to any system in which the production and distribution of goods and services is a shared responsibility of a group of people. Socialism is based upon economic and political theories that advocate for collectivism. In a state of socialism, there is no privately owned property.
- 8. It states that, • Proper utilisation of society resources • Creation of job opportunities • Not encourage to pollute the environment • Contribution towards infrastructure • Act within the rules and regulations • Preservation of scarce resources • Fair practices relating to manpower management
- 9. Individual Ethics: • Personal ethics is a category of philosophy that determines what an individual believes about morality and right and wrong. ... These branches of ethics come from outside organizations or governments, not the individual's conscience. •
- 10. • Every individual or employees should have the following characteristics or individual ethics as follows: Dedication, Integrity, Accountability, Collaboration, Personal values, Transparent, love and kindness. the organization should adopt all these ethical values in our business activities and in our duties with helps to get publicity earned maximum profit or it helps to develop the org., and helps to overcome the all the threats and problems.
- 11. CSR • Corporate social responsibility (CSR) is a self- regulating business model that helps a company be socially accountable—to itself, its stakeholders, and the public. By practicing corporate social responsibility, also called corporate citizenship, companies can be conscious of the kind of impact they are having on all aspects of society, including economic, social, and environmental.
- 14. CSR through Triple Bottom Line:
- 15. • Economic Obligations: • Social Obligations • Environmental Obligations
- 17. CSR and BE • It comprises, • Fair practices to all business areas • Takes care about protect the environment • It attain the manpower management • It avoid the harmful business • It ensures what to do within provisions of business organisation.
- 19. CSR & CG • Corporate Governance deals with set of rules, norms, procedures, policies, guidelines etc that an ensuring to protect organisational interest and stakeholders interest.
- 21. It states that, • It ensures fairness, accountability, transparency, fair practices etc • It faciliates to control unpfair trade practices • It attains the organisational aspirations • It specifies the obligations and authorities of different levels of management.
- 22. Environmental aspects of CSR
- 23. • Elimination of wastes and emission • Maximising the efficiency • Environmental sustainability • Economic & environmental friendly products • Environmental reporting • Prevention of pollution
- 24. CSR models
- 31. Drivers of CSR: • Internal Stakeholders: Chairman or CEO, Board of Directors, management, Employees. • External Stakeholders: Customers, Creditors, Govt.,Suppliers, Debtors etc.
- 33. The Global Reporting Initiative (known as GRI) is an international independent standards organization that helps businesses, governments and other organizations understand and communicate their impacts on issues such as climate change, human rights and corruption.
- 34. • Its applicable to : MNCs, Public Undertaking, Small and medium enterprises • It facilitates to improve business standards • To encourage to third party to assess to environmental aspects of business organisation.
- 35. CSR and Companies Act 2013 • The Ministry of Corporate Affairs has notified Section 135 and Schedule VII of the Companies Act 2013 as well as the provisions of the Companies (Corporate Social Responsibility Policy) Rules, 2014 to come into effect from April 1, 2014.
- 36. • With effect from April 1, 2014, every company, private limited or public limited, which either has a net worth of Rs 500 crore or a turnover of Rs 1,000 crore or net profit of Rs 5 crore, needs to spend at least 2% of its average net profit for the immediately preceding three financial years on corporate social responsibility activities.
- 37. • The CSR activities should not be undertaken in the normal course of business and must be with respect to any of the activities mentioned in Schedule VII of the 2013 Act. Contribution to any political party is not considered to be a CSR activity and only activities in India would be considered for computing CSR expenditure.
- 38. • in determining CSR activities to be undertaken, preference would need to be given to local areas and the areas around where the company operates. • To formulate and monitor the CSR policy of a company, a CSR Committee of the Board needs to be constituted. Section 135 of the 2013 Act requires the CSR Committee to consist of at least three directors, including an independent director.
- 39. • Companies can also collaborate with each other for jointly undertaking CSR activities, provided that each of the companies are able individually report on such projects.
- 40. Thank you.