Reimagining CSR

For long it was considered that a company is collective of shareholders and, therefore, the best interest of shareholders is the best interest of the company

New draft rules set to clamp down on CSR activities through trusts
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Asish K Bhattacharyya
Corporate law requires directors to take only those decisions that they honestly believe (in good faith) will serve the “best interest of the company as a whole”.

For long it was considered that a company is collective of shareholders and, therefore, the best interest of shareholders is the best interest of the company. However, in some jurisdictions, courts are taking the view that a company is a legal entity separate from shareholders and, therefore, the “best interest of the company as a whole” does not imply the best interest of shareholders. Directors must consider the interest of other important stakeholders,
Disclaimer: These are personal views of the writer. They do not necessarily reflect the opinion of www.business-standard.com or the Business Standard newspaper

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First Published: Jul 19 2020 | 5:17 PM IST

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