“Corporate Governance and

Social Responsibility”
MS-438
Lecture 19
“ Corporate Social Responsibility”

By: Majeed Ullah Khan

Asst. Professor, Institute of Business Studies
KUST
Topic: CSR

Topic to be Discuss
 Scope of CSR- Being a good citizen
 Shades of CSR
 Step Towards CSR
 Bench Marking in CSR
 CSR in Pakistan

Course: Corporate Governance and Social Responsibility, MS-438-- Instructor: Majeed Ullah Khan, Asst. Prof. Institute of Business Studies, KUST -- Email:
majeedullah@kust.edu.pk
Topic: CSR
Being a Good Citizen
 Companies are also called corporate citizen
 So expected to obey law, invest in community and show concern for environment
Compliance with Laws:
 Almost all aspect of the company (legal entity) are governed by the companies
 Some businesses are subject to additional regulations such as banks, insurance
 Good corporate citizen always follow the laws no matter how much cost it
Investment in Community:
 Doing thing for surrounding community to improve quality of life
 Building playground, parks
 Constructing roads and bridges
 Digging wells for villages
 Scholarships
Course: Corporate Governance and Social Responsibility, MS-438-- Instructor: Majeed Ullah Khan, Asst. Prof.
Institute of Business Studies, KUST -- Email: majeedullah@kust.edu.pk
Topic: CSR
Being a Good Citizen
Concern for Environment
 Saving the world from ruthless exploitation for temporary gain is the
responsibility of every one including corporate citizen
 Man uses resources for quality of life and corporate use it for profit
 If there is no arrangement of renewing them then we all will be out of it
 Example: A forest near a village is chopping by people for burning and
making furniture. They don’t bother plant any trees and finally they will be
left without any tree.
 Common sense is to plant one tree for each tree that is cut during the period

Course: Corporate Governance and Social Responsibility, MS-438-- Instructor: Majeed Ullah Khan, Asst. Prof.
Institute of Business Studies, KUST -- Email: majeedullah@kust.edu.pk
Topic: CSR
Being a Good Citizen
 Common ways to look after environment:
 Maintaining Eco-Balance
 Avoiding pollution
 Careful use of natural resources
 Environmental risk management

Course: Corporate Governance and Social Responsibility, MS-438-- Instructor: Majeed Ullah Khan, Asst. Prof.
Institute of Business Studies, KUST -- Email: majeedullah@kust.edu.pk
Topic: CSR
Reality of CSR
 Companies do less and advertise more about CSR
 Place huge detail on advertisement in paper and send CSR report shareholders
to attract media coverage
 Companies use publicity to further their business interest
 Company portray CSR for society but in reality it for their own public image
 E.g. In USA, corporation Launched a academic assistance program for under
privileged segment of society. They granted $1.9M in four year but spent
$4.3M on publicizing the project.

 Very limited discussion are heard on social and environmental issues in board
room
 Situation is worst in developing nation and less attention paid toward CSR

Course: Corporate Governance and Social Responsibility, MS-438-- Instructor: Majeed Ullah Khan, Asst. Prof.
Institute of Business Studies, KUST -- Email: majeedullah@kust.edu.pk
Topic: CSR
Step towards CSR

 Below steps are recommended for companies to formalize it CSR

activities:
1. Establish the current position
2. Set Reasonable Targets
3. Formulate and Promulgate a formal CSR policies
4. Monitor the situation and revise target

Course: Corporate Governance and Social Responsibility, MS-438-- Instructor: Majeed Ullah Khan, Asst. Prof.
Institute of Business Studies, KUST -- Email: majeedullah@kust.edu.pk
Topic: CSR
Bench-Marking in CSR
 Below are questions face by board regarding CSR activities?
1. How much effort and resources should the company devote to CSR?
2. Should the company spend as much as the average of industry?
3. Should the company spend as near as the competitor spend?
4. Should the company spend as much as industry leader or spend too little to
avoid being called unsocial?
 Is there bench mark? The collective wisdom of board can decide about it.
 Board has knowledge about the resources and capacity of the company to spend on
CSR
 Once board decide the CSR threshold then formal policy should be made for it

Course: Corporate Governance and Social Responsibility, MS-438-- Instructor: Majeed Ullah Khan, Asst. Prof.
Institute of Business Studies, KUST -- Email: majeedullah@kust.edu.pk
Topic: CSR
CSR in Pakistan
 Very few companies have formal CSR policy
 Mostly MNC operating here in Pakistan has proper CSR policies
 Local companies are unaware of the benefits earned by CSR
 May be, local companies feel any danger to avoid adopting CSR
 But it can threat the business such threat to sports industry due child labor issue
 Labor exploitation, child labor, unsuitable working conditions are area highlighted
by International HR watchdog
 In 2003, Pakistan Compliance Initiative was launched
 CSR and philanthropic action are used interchangeably, need awareness about CSR

Course: Corporate Governance and Social Responsibility, MS-438-- Instructor: Majeed Ullah Khan, Asst. Prof.
Institute of Business Studies, KUST -- Email: majeedullah@kust.edu.pk
Course: Corporate Governance and Social Responsibility, MS-438-- Instructor: Majeed Ullah Khan, Asst. Prof. Institute of Business Studies, KUST -- Email:
majeedullah@kust.edu.pk