The Ministry of Corporate Affairs, Government of India, in partnership with various chambers, members of corporate, and Indian Institute of Corporate Affairs has established the National Foundation for Corporate Social Responsibility (NFCSR).
National Foundation for CSR (NFCSR)
Business Responsibility: From Philanthropy to Business Strategy
The National Foundation for CSR would help build an enabling environment for the corporate sector to work in partnership with the Government, Non-Government and Civil Society Organizations, as well as local community organizations for effective contribution to sustainable growth and development.
National Foundation for Corporate Social Responsibility (NFCSR)
Business Responsibility (BR) is a form of self-regulation through which business embraces the tenets of social, economic and environmental responsibilities for its actions. Responsibility focused businesses endeavor to integrate these tenets into their business models and proactively promote public interest by encouraging community growth and development. BR is thus, the deliberate inclusion of public interest into corporate decision-making while focusing on the triple bottom line: people, planet, profit.
The Ministry of Corporate Affairs along with the Indian Institute of Corporate Affairs has been making efforts to mainstream the adoption of responsible governance practices by the corporate sector and had released the National Voluntary Guidelines on CSR in 2009 as a step in this direction. Although there is a growing consciousness in the area of BR among the Indian Companies, there is a need to bring all the actors – governments, corporate sector, civil society and other stakeholders – together so that they can collaborate to make a significant impact towards the national goal of inclusive growth and development establish a national platform which can function as such an enabler. Such a platform also needs to have the commitment of the government, the professional practitioners and the trade and industry chambers.
Therefore, the Ministry of Corporate Affairs, Government of India, in partnership with the following and with technical assistance with the World Bank has established the National Foundation for CSR (NFCSR):
Indian Institute of Corporate Affairs (IICA),
Confederation of Indian Industry (CII),
Federation of Indian Chambers of Commerce and Industry (FICCI),
The Associated Chamber of Commerce and Industry of India (ASSOCHAM),
Ministry of Corporate Affairs (MCA): MCA is primarily concerned with administration of the Companies Act, 1956, other allied Acts and rules & regulations framed there-under mainly for regulating the functioning of the corporate sector. The Ministry is also responsible for administering the Competition Act, 2002 and Limited Liability Partnership Act, 2006. Besides, it exercises supervision over the three professional bodies, namely, Institute of Chartered Accountants of India (ICAI), Institute of Company Secretaries of India (ICSI) and the Institute of Cost and Works Accountants of India (ICWAI) which are constituted under three separate Acts of the Parliament for proper and orderly growth of the professions concerned. The Ministry also has the responsibility of carrying out the functions of the Central Government relating to administration of Partnership Act, 1932, the Companies (Donations to National Funds) Act, 1951 and Societies Registration Act, 1980.
The Ministry of Corporate Affairs, has issued National Voluntary Guidelines on Social, Environmental and Economical Responsibilities of Business. While these are comprehensive and directional, they emphasize business responsibility as a voluntary activity that stems from home-grown indigenous historical experience, where business responsibility has been the defining and unique way of thinking of Indian leaders. The Guidelines also focus on:
Ethical functioning with accountability and transparency
Respect for stakeholders’ expectations
Respect for the environment
Activities for social and inclusive development
The Guidelines further attempt to generate:
A clear implementation strategy, identification and prioritization of activities and setting measurable targets
Networking with other organizations for experience sharing, within and outside of India
Dissemination of information on business responsibility policy and progress in a structured manner for all stakeholders and the public at large
Indian Institute of Corporate Affairs (IICA): IICA has been established by the Indian Ministry of Corporate Affairs as a think tank, service delivery, policy advisory and capacity building institution in various subjects and matters relevant to corporate regulation and governance such as corporate and competition law, accounting and auditing issues, compliance management, corporate governance, business sustainability through environmental sensitivity and social responsibility, e-Governance and enforcement etc. The Institute has been designed with an eye on the future to provide a platform for dialogue, interaction and partnership between governments, corporate, investors, civil society, professionals, academicians and other stake holders in the emerging 21st century environment
Confederation of Indian Industry (CII): CII is a non-government, not for profit, industry led and industry-managed organization, playing proactive role in India’s development process. CII works to create and sustain an environment conductive to the growth of industry in India, parenting Industry through advisory and consultative processes.
Federation of Indian Chambers of Commerce and Industry (FICCI): A non-government, not-for-profit organization, FICCI is the voice of India’s business and industry. FICCI has direct membership from the private as well as public sectors, including SMEs and MNCs, and an indirect membership of over 83,000 companies from regional chambers of commerce.
The Associated Chamber of Commerce and Industry of India (ASSOCHAM): As an apex industry body, ASSOCHAM represents the interests of industry and trade, interfaces with Government on policy issues and interacts with counterpart international organizations to promote bilateral economic issues.
(Briefs on the other members to be added after their confirmation)
National Foundation for CSR
The overall mission of the Foundation is to help create a national platform for the corporate sector to work in partnership with the Government, Non-Governmental and Civil Society Organizations and local community organizations and to work together to implement collaborative projects in the field of Business Responsibility. The foundation will be a registered Society with an independent governing structure, managed on a day-to-day basis by a Secretariat. The Foundation will be housed in the Indian Institute of Corporate Affairs (IICA).
The main objective of this foundation shall be:
(a) To provide a strong, independent, neutral and credible platform to corporate sector, Central and State Government, Local Authorities, Civil Society Organizations etc. engaged in Responsible Business Practices to advocate and capture issues relating to business responsibility as the key to sustainable business;
(b) Be a catalytic agent in facilitating project-based collaboration amongst the private sector, national and state governments and NGOs, community organizations at the grassroots level/ that contribute to the larger objectives of sustainable and inclusive growth.
(c) To stimulate and to facilitate exchange of experiences and ideas between corporate leaders, policy makers, regulators, law enforcing agencies, non government organizations and voluntary agencies with a view to developing a framework for responsible business reforms in the context of liberalization and globalization;
(d) To provide research, training, practice, capacity building, standard setting, advocacy, rating, monitoring, recognition and related support in the field of responsible business.
(e) To facilitate financial or any other assistance directly or indirectly for activities which seek to promote responsible business practices including research and training;
(f) To develop strategies that enhances value for all stakeholders and ensure long term benefits to the shareholders and the society at large;
(g) To establish and deepen links with organizations in various parts of the world which promote responsible business practices for exchange of ideas and for collaborative actions, projects and programmes;
(h) To collaborate and to support, directly or indirectly, the initiative of any individual, group, organization or institution in promoting best practices in business responsibility;
(j) To prepare, print and publish any papers, periodicals or newspapers, books or leaflets either on its own or in collaboration with other persons/entities through print or other media and to contribute to any papers or periodicals to disseminate information and knowledge in the area of corporate social responsibility;
(k) To facilitate, promote, commend and collaborate on the proposals from individuals, associations and organizations for funding by national, international and multi-lateral organizations as also industry associations, regulators and governments;
(l) To provide advice, consultancy and technical and managerial support to the beneficiaries of the Foundation programmes through a network of advisors drawn from the industry and institutions of excellence;
(k) To establish a database of credible civil society organizations with whom the government organizations, the corporate entities as well as the donor organizations can work and collaborate.
Activities of the Foundation
The Foundation, during the initial founding phase, would focus on the following critical activities and functions. The activities and programmes would evolve over a period and the Governing Board and the Advisory Board will guide this evolution.
Focus on regional development: Synergizing the efforts of governments, corporate sector, civil society and communities to focus on sustainable local area development as a part of business responsibility
Outreach and Communications: Undertaking large scale outreach and strategic communication to raise awareness on business responsibility and more importantly the potential BR has to contribute to sustainable and inclusive growth in India.
Conferences/workshops: working through partners in India and internationally, the Foundation would organize conferences/workshops to discuss/share key BR concepts, engage stakeholders in policy dialogue, disseminate policy notes and research papers based on domestic and international best practices;
Networking: developing a virtual network that brings together all stakeholders and partners in the BR space;
Pilot Projects: developing pilot projects through collaboration among the working partners which would be implemented with robust developmental objectives, fiduciary oversight, program management and measurable outputs and long-term impact.
Catalyzing funds flow from the corporate sector to deserving development projects in the areas of national priority
Working Partners of the Foundation
The NFCSR would therefore work with a range of actors. These include:
Corporate and business entities that are already undertaking activities in the area of Business Responsibility as well as those which are keen to take up future programs and acquire knowledge from Indian and international experience on possible BR activities;
Ministries/Departments of the Central Government that have programmes aimed at social and economic development of the communities at the grass root level;
State and local governments who will overtime gain the experience necessary to work with corporate partners and facilitative agents for BR;
Sub-national, state, district and sub-district level institutional structures engaged in developmental initiatives of the country;
NGOs, Community organizations, NGO networks and service providers that would acquire knowledge on how best to provide quality services with a results-based framework;
Community and Community based organizations established in different segments of society at the local level;
World Bank, providing technical assistance in the form of international experience in the field of BR
Structure of the Foundation
In order to effectively execute the policies and programmes, NFCSR will have a sound internal governance structure capable of delivering the intended outcomes. The three tier structure will be as under:
(a) All the powers hereunder shall vest in the Governing Board.
(b) The members of the Board shall be the following:
1. Hon’ble Minister for Corporate Affairs – Chairman
2. Secretary, MCA – Vice Chairman
3. ……………………….-IInd Vice-Chairman
4. DG/OSD/Director, IICA – Member
3. Representative of CII – Member
5. Representative of FICCI – Member
6. Representative of ASSOCHAM – Member
7. Individual Members……..
(c) The Board can have other member that is, in addition to the first members above named and they shall be co-opted from time to time. Such co-opted members may include representatives of Government, Local Government, Corporate, NGOS and anyone who has made substantial contribution to the foundation. The consent of three-fourths of the Board shall be required for the appointment of such co-opted members.
(d) When any of the first members from institutional members retire or for any other reason steps down from their respective position, he/she shall automatically cease to be a Member of the Board. Further, his or her successor in office shall automatically become a Member of the Board unless he/she declines in writing to become a Member of the Board.
(e) In the event of the Chairman and either of the Co-chairman not being able to attend a meeting, the members present may decide as to which member should chair the meeting.
Functions of the Governing Board Members
The functions of the Board shall include:
(a) To establish, equip, maintain and operate all administrative functions, directly or indirectly, as may be necessary or deemed expedient for fulfilling the objects of the Foundation.
(b) To cooperate and/or collaborate with, afford financial assistance to or otherwise assist in any work of any foundation, agency, association or institution or any other body having objects similar to those of the Foundation.
(c) To publish and disseminate information about the objects and achievements of the Foundation and the information, knowledge, experience and results received or gained by the Foundation in pursuing its objects;
(e) To convene, organize and sponsor conferences, congresses, colloquia, working group, lectures, courses, study trips, training programmes and seminars at such places and at such times as may be determined to promote the objects of the Foundation.
(f) To organize, conduct and/or participate in national and international conferences, seminars etc. to promote the objects of the Foundation.
(h) To pay all expenses preliminary or incidental to the formation of the Foundation and its registration;
(i) To accept contributions (as corpus or otherwise) from industry associations, professional institutions, philanthropic organizations, multi-lateral international organizations for pursuing the objects of the Foundation.
(j) To invest in instruments, as prescribed by regulations, and deal with funds and moneys of the Foundation consistent with the activities and requirements of the Foundation and as permissible in law particularly under the Income Tax Act and/or Income Tax Rules or any other applicable legislation for the time being in force and to vary, alter or to transpose or sell/recall such investments from time to time;
(k) To create a corpus fund and to open and operate bank accounts and to draw, make, accept, endorse, discount, negotiate, execute and issue bills of exchange, promissory notes and other negotiable or transferable instruments or securities;
(l) To employ officers and other employees as per the Regulations of the Foundation as may be required for the purposes of the Foundation;
(n) To engage advisers, consultants and research scholars as per the regulations of the Society for all or any of the purposes of the Foundation.
(o) To pay out of the funds of the Foundation expenses for carrying out any of the foregoing objects;
(r) To frame Regulations, to carry out the objects of the Foundation and for managing the affairs of the Society and otherwise for giving effect to the objects and purposes of the Society and to amend the Regulations from time to time as deemed fit.
(s) To acquire, receive and hold property and assets through purchase or lease or in exchange or by way of gift or otherwise any movable or immovable property and to sell, mortgage, lease, exchange or otherwise transfer or dispose of or deal with all or any property of the Foundation, whether movable or immovable, but for the purposes of the Society only;
(t) To formulate any other rules governing the functioning of the Foundation.
The Advisory Board
The Advisory Board will comprise 8-10 members who are thought leaders in the field of BR. The Board will advise and mentor the Governing Board on strategic issues. The Board shall comprise of the members that are approved by the Governing Board. Typically, the advisory Board shall have the following members:
Representative from Corporate Sector
Representative from the NGO community
Representative from international development agencies
Representative from academia
Representative from bilateral donors/foundations supporting the Foundation on CSR
Representative from a community-based organization
Experts in education, skills development, health, and/or social protection, malnutrition, etc.
The Executive Directorate would provide the internal support to NFRB activities and implement the decisions of the Governing Board. The Governing Board is to decide from time to time depending on the activities of the NFRB about the qualifications; terms of appointment etc. of the members. The Executive Directorate would be headed by an Executive Director who would be supported by experts in the field of the project management, execution, communication and outreach, research and analysis etc. The Support Staff is to be provided by IICA and the cost of the staff will be charged from the Foundation.
Meeting of the Governing Board
The Annual Meeting of the Governing Board shall be held not later than 30th of September every year at such time and place as may be determined by the Chairman. At such annual meetings, the ED shall submit the annual report and the yearly accounts of NFCSR to the Board. However, the Chairman may, at any time, convene special meetings to discuss any contingent matter.
Every notice calling a meeting of the Board shall state the agenda, date, time and place at which such meeting will be held and shall be sent by post to every member of the society not less than fifteen days before the day appointed for such meeting.
The quorum for the meetings shall be a minimum of five members of the Board with the meeting being presided over by the Chairman and in the absence of the Chairman, the members present on the occasion shall choose a member to preside over the meeting.
Finance, Accounts and Audit
The funds of the Foundation shall come from endowments and the grants made by or through the Central or any State Government, founding partners, return on investment, donations and contributions from other sources, fees collected from the participants for imparting training, Chairs created by donors, Corpus created by the Foundation out of its funds, research work, consultancy charges, publications, investments etc.
The income of the Foundation shall be utilized for the promotion of its objectives and no part shall be distributed among its members in any form whatsoever.
Moneys forming part of the funds of the Foundation shall be deposited in banks approved by the Board and surplus funds invested in a manner as prescribed by the Governing Board.
No portion of the income and property of the Foundation shall be paid or transferred, directly or indirectly, by way of dividends, bonus, or otherwise howsoever by way of profit to any institutions/persons who any time are or have been members of the Foundation or any of them, provided that noting herein contained shall prevent the payment in good faith of remuneration to any member thereof or other persons in return for any services rendered to the Foundation.
The Board shall cause proper Books of Accounts to be maintained and kept in respect of all sums of money received and expended by the Foundation and the matters in respect of which income and expenditure takes place and of the assets and liabilities of the Foundation. The financial accounts of the foundation shall be completed within three months of the close of the year. The financial year of the Foundation shall be from April to March.
The Accounts of the Foundation shall be audited annually by a qualified auditor or auditors appointed for the purpose by the Foundation.
If on the winding up or dissolution of the Foundation there shall remain, after the satisfaction of its debts and liabilities, any property whatsoever, the same shall not be paid to or distributed among the members of the society or any one of them, but shall consistently with the objectives of the Foundation, be dealt with in such manner as Governing Board may determine.