What’s meaningful about Corporate Social Responsibility

What’s meaningful about Corporate Social Responsibility

FPJ BureauUpdated: Saturday, June 01, 2019, 09:43 AM IST
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Given the quantum of funds, that is expected to churn out from Corporates in the name of CSR,  it is absolutely crucial that these funds are utilised in a planned, meaningful and professional manner, says DILEEP RANJEKAR.

There are three important pillars in a democratic society like India, the government, the not for profit sector and the corporates (Industry/Business). Each pillar is distinct in its character and has its own strengths and weaknesses.

The Government is a democratically elected body and has a certain legitimacy and permanency. It has a constitutional responsibility to deliver identified services to all citizens and to protect the freedom, liberty and rights that have been guaranteed by our constitution. We know the way the government operates and also know that successive governments have failed to deliver the constitutional promises. Some critical issues that contribute to a government’s performance are – lack of political will, absence of accountability of bureaucratic structures (contributed by uncertainty of tenure, absence of performance and risk-reward system, no systematic effort in building capacity, etc.) and weak governance.

India probably has amongst other countries, the highest number of NGOs – estimated currently at 3 million. These institutions are characterised by the passion, dedication and sacrifices of their founders and other key employees. However, in the absence of large scale philanthropy in India – the biggest challenge the NGOs face is financial dependence and therefore, the inability to plan in the long run. This also seriously affects the quality of talent they attract.

[alert type=”e.g. warning, danger, success, info” title=””]If you speak to a wider cross section of CEOs of corporates, it appears that their main concern is to primarily think about how the CSR benefits their image, their employees, their credibility and their performance.[/alert]

The corporates, on the other hand, have the resources, talented employees and processes that are conducive to performance, quality and measurements. What many of them lack is a genuine social orientation. This manifests in their unwillingness to assign high quality talent, build capacity in them, and have a long-term approach to their work. It is also reflected through their excessive focus on building brand and communication that is disproportionate to the kind of work done by them.

If you speak to a wider cross section of CEOs of corporates, it appears that their main concern is to primarily think about how the CSR benefits their image, their employees, their credibility and their performance. Very few of them think of how their work benefits the society or the target segment that they work with.

In a lighter vein, someone once described that the government is like grass without roots, non-profit organisations are like roots without grass and corporates are like fruits without grass and roots. Corporate houses must take it upon themselves to change this image.

Today, we are at the threshold of entering an era where corporates are expected to voluntarily allocate a percentage of their net profits towards Corporate Social Responsibility. This has a potential of releasing huge funds in the system towards socially-oriented programmes. Given the quantum of funds, it is absolutely crucial that these funds are utilised in a planned, meaningful and professional manner. What are some of the factors that can ensure this? A few thoughts that occur to my mind are:

Deeper understanding of society and social issues

The employees, customers, vendors and even the shareholders come from the same society in which corporates exist. There is a general erosion of credibility of corporates – that arises due to unscrupulous methods adopted by many to achieve profits, uni-dimensional pursuit of profits, gross violation of applicable laws, unfair treatment of employees – depriving them of their lawful rights – evasion of taxes, and not honouring the commitments made to the customers and vendors. It is not that all corporates conduct themselves in this manner. But, there are many who are guilty of these.

The underlying reason is an inadequate understanding by corporates of issues of equity, justice, humanity and sustenance. It is important that those working in these corporate houses are themselves law-abiding and responsible citizens of society. Illustratively, they must understand their social responsibilities which include issues such as the consequences of polluting their environment, the importance of proper disposal of e-waste, and ensuring their neighbourhood community is neither displaced nor disturbed.

Responsible investment in planning and execution of Corporate Social Responsibility

Carefully identify the area of your CSR work – research the domain, understand underlying and interconnecting issues and take a comprehensive look at what you want to do – it cannot be left to the whims and fancies of the top management or their relatives who could be untrained professionals. Decide whether you want to fund, work on the ground, create talent or be a network creator of social organisations.

The first step is to identify the right professionals who have social understanding, a positive attitude and a willingness to learn in depth. Do provide space for your own employees to participate, either financially or physically. A well-organised CSR does have a positive impact in attracting and engaging employees with the organisation. Social impact issues are significantly different than measurements of corporate results, they are softer, long-drawn, highly qualitative and complex to monitor and measure. Therefore, establish goals for your work and evolve appropriate monitoring, review and measurement processes that are similar to what you do in corporate organisation but are dramatically different.

Realisation that CSR is not a statutory responsibility but something that we owe to the society

Our nation is seriously underdeveloped in parts. There are glaring inequities and we cannot afford to suffer from the ostrich syndrome. There are several challenges such as poor quality of education, absence of healthcare to large number of citizens, basic availability of good quality electricity, proper roads, water and employment. This is unacceptable after 67 years of independence.

The corporates and its employees, who constitute a small percentage of citizens, are the beneficiaries of unequal economic development that the country has witnessed. There is a large responsibility towards people who did not benefit for several reasons. This motivation has to come from within and cannot be forced. CSR will be more effective if it is carried out with a feeling of responsibility towards society.

(The author is the Chief Executive Officer, Azim Premji Foundation)

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