Shri Injeti Srinivas, I.A.S.
Secretary to Government of India
Ministry of Corporate Affairs
5th Floor Shastri Bhawan
Dr. Rajendra Prasad Road
New Delhi 110 001
Subject: Need for effective governance mechanism for CSR and introduction of CSR Audit/ Review -Reg.
Introduced by the Companies Act, 2013, the mandate of provisions of Corporate Social Responsibility (CSR) has been around for more than half a decade and these years have witnessed a sea change in the 'corporate governance' and 'social responsibility' scenario ever since.
The provisions relating to CSR were brought in sensing the need for the companies to owe certain amount of responsibility towards the society and the environment. Though the compliance with the law in letter has been increasing every year, yet a lot has to be done to reap the intended benefits of this laudable provision.
To ensure that the companies comply with the provisions of Section 135 and rules made thereunder and genuinely spend the CSR amount on the eligible welfare projects, it is imperative to improve governance and transparency in CSR sphere.
Akin to other areas of corporate activity requiring compliance need for a dedicated independent professional has been felt in the arena of social responsibility as well. Here, howev,!r, such a need is heightened considerably for the law itself is in the nascent stage and requires s constant handholding for the corporates undertaking compliance of the same.
Undisputedly, independent professionals like Company Secretaries who posses requisite knowledge and skills can add tremendous value in this regard. On one hand, the Company Secretaries so appointed shall seek to analyse the impact and efficiency of the projects undertaken under CSR mandate by corporates and also share their observations and findings wits the Company in the form of a CSR Audit/Review report, which may mandatorily be annexed with the Board report of the company to provide for greater accountability and assurance. On the other hand, Company Secretaries may be entrusted with the role of guide in understanding the law and its mandate and handhold such entities into enhancing the CSR governance.
An independent CSL Audit/ Review and issue of CSR Audit/Review Report by the Company Secretaries in Practice shall not only give the existing CSR mechanism much needed support and give necessary comfort to the stakeholders, regulators and the society at large that the companies are cot Iplying with the legal requirements but will also give authentic information about the Lt.lisation of CSR funds by the companies in specified CSR activities.
To read more in details, find the enclosed attachmentTags : Corporate Law