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CS Professional · CSR and Social Governance · Contribution of Non-Corporate Entities in Social Governance

Navjyoti Society, a registered society, receives member subscriptions and public donations. Its governing council wants to follow good governance although no company law applies. Which course best reflects the concept of social governance for non-corporate entities?

The society should follow its bye-laws, hold regular meetings, maintain proper accounts and disclose activities and finances to stakeholders. Social governance relies on accountability and transparency even where company law does not apply. Company board structures are not legally compulsory for societies.

  1. ARely only on the personal discretion of the president since no statute applies
  2. BFollow its own bye-laws, hold regular council and general body meetings, keep proper accounts and disclose its activities and finances to stakeholdersCorrect
  3. CAdopt the Companies Act board committee structure as a legal requirement because it is mandatory for societies
  4. DStop keeping records because societies are exempt from accountability

Explanation

Social governance for non-corporate entities rests on transparency, accountability and participation through bye-laws, meetings, accounts and disclosure. Absence of company law does not remove accountability to members, donors and regulators. Company committee structures are not mandatory for societies, though model codes may guide them.

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