Securities and Exchange Commission of Pakistan (SECP) on Friday approved the Corporate Social Responsibility Voluntary Guidelines, 2013 aimed at encouraging body corporate to align their business strategies with their social responsibilities.
The Corporate Social
Responsibility Voluntary Guidelines is a preliminary step towards introducing
broad parameters for accountability and reporting of CSR activities.
These Guidelines are being published as guidance document
for all companies. Under the Guidelines, Board of Directors of registered
entities are encouraged to take ownership for formulation, adoption and
implementation of CSR policy of a company. The Guidelines recommend that CSR
policy be fully endorsed by Board of Directors of Company and that such policy
is embedded in the vision and strategy of the company. CSR governance benchmark
table has been added at the end of Guidelines that shall facilitate companies
to assess their performance and for peer review.
Presence of an effective CSR management system is
emphasized in CSR Guidelines. The said systems are expected to provide a road
map for implementation of CSR activities. Also, specific indicators reflecting
effective governance and implementation of CSR policy have been provided in the
Guidelines. The requirements of disclosure and reporting have been extended i.e
the broad areas expected to be covered by CSR reports have been provided in the
Guidelines.
Furthermore, companies have been encouraged to earmark
specified financial or nonfinancial resources, specific criteria or a
proportion of their profit (preferably 1-2%) for CSR initiatives. The method of
allocation of resources or identified criteria must ideally be predetermined,
duly endorsed by the board and form part of CSR Policy.
The Guidelines also provides for forming a CSR
consultative committee for purpose of ensuring transparent, specialized
supervision and reporting progress. Recommendatory terms of reference of CSR
committee have been added at the end of Guidelines for facilitation of
Companies. Moreover, keeping in view the best practices, guidelines call for
obtaining independent assurance regarding the CSR project undertaken by
Companies and the report of assurer thereof forming part of CSR report of
company.
Commission also approved the constitution of CSR Forum.
The mandate of forum includes gap analysis, raising awareness amongst
businesses regarding CSR issues, CSR reporting and assurance reporting
framework in view of international best practices.
Commission is appreciative of the CSR initiatives taken by
companies and is confident that these Guidelines shall facilitate in
strategizing and reporting CSR framework for greater benefit of society and
sustainability of business.
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