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The guidelines, focus on promoting a CSR culture in the company by identifying key aspects of establishing CSR processes in the company – placing emphasis on various stages of how CSR should be integrated in business practice, mainly focusing on identifying a CSR consultative committee, on developing a CSR Policy, identifying goals and achievements, and related disclosure and reporting, and independent assurance of CSR performance.The SECP has placed emphasis on expectation of the board of directors to play an active role in formulating CSR policy.
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The guidelines identify a top-down approach for practicing CSR, focusing on commitment of top management to include CSR into strategic business decisions.
Companies to Choose their own CSR Interests The guidelines, whilst giving the company a direction in managing CSR, give the company freedom to develop its own understanding of CSR.
The advantage of this freedom is that the company is left free to decide which interests are material issues – an impact of which could influence the decisions and behavior of stakeholders.
The disadvantage in leaving an open field for a company to choose from might result in a company continuing to focus only on charitable donations.
Others give CSR token recognition; thus disclosing on CSR performance is simplistic as compared to sophisticated reporting of financial figures.
As both content and methodology of disclosures varies across companies, it is difficult for stakeholders to understand the company’s CSR performance related data.
Voluntary Guidelines for Public Companies The recently released ‘Voluntary Guidelines for Corporate Social Responsibility’ by the Securities and Exchange Commission of Pakistan (SECP) strives to make CSR performance more congruent amongst companies.
The Guidelines, SECP’s second regulatory input related to CSR, follow on from the mandatory CSR General Order in November 2009 that stated listed companies were to include monetary and descriptive disclosures in their Directors Report.
This can be tricky if companies still understand ‘CSR’ to be charitable donations.
It does suggest a number of areas of interests which can a company can focus its CSR activities on.
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