The CSR committee: who sits on it and what it does

A CSR committee is a committee of a company’s board of directors that plans and oversees the company’s corporate social responsibility (CSR) spending. Section 135 of the Companies Act, 2013 requires most companies that must spend on CSR to have one, and gives it three tasks: recommending the CSR policy, recommending how much to spend, and monitoring the policy.

The committee recommends; the board decides. But in practice the committee is where CSR gets its attention: where projects are chosen, budgets argued over, and progress checked. A good one is the difference between a CSR programme that changes something and one that only meets a deadline.

This guide is for company secretaries, CSR heads and directors. It covers when a committee is needed, who must sit on it, what it does, how it should meet and report, and a charter outline you can adapt. It reflects the law as in force on 3 October 2026.

When a company needs a CSR committee

The starting point is simple. Section 135(1) says every company that meets one of the CSR tests in the previous financial year (net worth of ₹500 crore or more, turnover of ₹1,000 crore or more, or net profit of ₹5 crore or more) must constitute a CSR committee. Our guide to which companies must spend on CSR explains the tests.

Two later rules change the answer:

So the question is asked afresh each year, and it has three parts:

1. Is the company covered this year? If not, and nothing sits in an Unspent CSR Account, no committee is needed.
2. Is this year’s obligation more than ₹50 lakh? If it is, a committee is needed. “Doesn’t exceed” includes exactly ₹50 lakh, so a ₹50 lakh obligation can be handled by the board.
3. Is there any money in an Unspent CSR Account? If there is, a committee is needed until the account is empty, even if the obligation is small or the company is no longer covered.

The same 2022 amendment removed an old escape route. Rule 3(2) used to excuse a company that had fallen outside Section 135(1) for three consecutive years. It was omitted, so the test is now purely year by year. The Unspent CSR Account is explained in its own guide.

Who must sit on it

The Act says the committee is made up of directors, and Rule 5(1) of the CSR Rules and the MCA’s FAQ 2.1 set the minimum for each kind of company:

A few points follow from the wording:

• Members must be directors, except in a foreign company, where the Rules speak of persons. The CSR head, the CFO or an outside expert can attend as invitees, but they aren’t members unless they are directors.
• Whether a public company needs independent directors depends on Section 149(4) and the rules under it. Listed public companies always do; some larger unlisted public companies do too. Check the company’s position before deciding between three members and two.
• Each company is tested on its own (FAQ 1.2). If a holding company and its subsidiary are both covered, each needs its own committee, though the same directors can sit on both.
• These are minimums. Nothing stops a private company appointing an independent director, or any company having a larger committee.

What the committee does

In a typical year, that legal core turns into a cycle of decisions:

• The policy. The committee drafts the CSR policy and recommends changes to it. The board approves it and publishes it. See the CSR policy and the annual action plan.
• The budget. It recommends how much to spend: at least the 2% obligation, adjusted for any surplus brought in and any set-off the board decides to use. The calculation is in how much a company must spend.
• The annual action plan. It recommends the year’s plan, and any change during the year. Under the proviso to Rule 5(2), the board may alter the plan at any time on the committee’s recommendation, based on reasonable justification.
• Monitoring. It reviews progress and the use of money. The board must monitor ongoing projects against their timelines and yearly budgets (Rule 4(6)), and the committee usually prepares that review.
• The year-end. It identifies which unspent amounts relate to ongoing projects, so the company can move them to the Unspent CSR Account by 30 April and send the rest to a Schedule VII fund by 30 September.

Many committees also review impact assessment reports before they go to the board, check the evidence behind the CFO’s certificate, and review the draft annual report on CSR. These are good practice rather than duties the law gives the committee, but they are the obvious place for that work to happen.

Meetings and minutes

The Act doesn’t say how often the CSR committee must meet or what its quorum is. That is for the committee’s terms of reference. Two rules do apply:

• Minutes are compulsory. Section 118 requires minutes of every meeting of a committee of the board to be prepared, signed and kept within 30 days of the meeting, as for board meetings.
• Meetings are reported. The annual report on CSR in the board’s report lists the committee’s members, how many meetings it held in the year and how many each member attended.

A committee that meets only once, to approve a plan someone else wrote, will struggle to show it monitored anything. Four meetings a year is a sensible rhythm:

Record the reasons for every change to the plan. The Rules allow changes “based on the reasonable justification”, and the minutes are your evidence that the justification existed. The full year is laid out in how CSR works in India, step by step.

What must be disclosed

Keep the website current. When a director joins or leaves the committee, update the page at the same time as the board minutes, so the two never disagree.

A sample charter outline

The law doesn’t require a written charter, often called terms of reference, but most well-run committees have one. Adapt this outline with your company secretary:

1. Purpose: to discharge the functions in Section 135(3) and Rule 5(2), and any others the board delegates.
2. Membership: the minimum the law requires for the company, how members are appointed and replaced, who chairs, and who acts as secretary (usually the company secretary).
3. Quorum and meetings: how many members make a quorum, at least how many meetings a year, notice and papers, and attendance by video.
4. Invitees: the CSR head, the CFO and outside experts, who attend without a vote.
5. Responsibilities: the policy, the budget, the annual action plan and its changes, monitoring, ongoing projects, year-end classification of unspent money, set-off recommendations, impact assessment reports and the draft annual report on CSR.
6. Conflicts of interest: how members declare interests in any NGO, foundation or supplier being considered, and step out of those decisions.
7. Reporting to the board: what goes to the board after each meeting, and in what form.
8. Review: when the charter itself is reviewed, for example every year.

Making the committee useful

A committee that meets the law can still add little. Five habits help:

• Bring in expertise. Directors rarely have development experience. Invite people who do, such as practitioners and evaluators, to advise, and give the committee time to learn about the sectors it funds.
• Guard its independence. Where the company has independent directors, consider having one chair the committee. Ask members to declare links to NGOs, trusts or foundations, including the company’s own. Contributions to a related party, such as a trust the company controls, must be disclosed in the notes to the accounts.
• Go and see. At least one field visit a year, with time to talk to the people a project serves, tells the committee more than a dashboard.
• Ask for outcomes, not just spending. Ask what changed for people, not only how much was spent. Our guide to monitoring CSR projects suggests what to track.
• Think in years. The best programmes stay with a need for several years. The committee is the natural keeper of that longer view, set out in a CSR strategy.

What the pending Bill would change

The CSR Law in Depth course works through the committee rules with scenarios, and Running a CSR Foundation shows how a company’s foundation fits around its committee and board.