The Responsible Corporate
September 2010

The Responsible Corporate

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CSR is not only about benefiting the company one owns but also benefiting the employees and the community, one is a part of.

Any sector has mainly three leagues Any sector has mainly three leagues – to social welfare adding to the effort of government & PPP initiatives. This coadjuvant mechanism is providing for a faster roll-out of development and therefore prosperity around the globe, which would otherwise take much longer.” And he is right. Indian has a culture of rich traditions that emphasises on co-operativeness amongst  members of family, society, community, regions, states and fi nally nation. Entrepreneurs of India work on the same principles. They work towards growth of their own organisation, fulfi lling aspirations of the stakeholders and actively participating with community for economic growth and development. Says Sushmita Chakravarti, Associate Director, CSC India: “CSR is a business imperative for CSC. It is not just about charity work, or just philanthropy, or just the environment. It encompasses
our clients, employees, communities, environment, and governance. We believe that sustainability is good business. We used to report on fi nancial assets. Now we need to report on our triple bottom line–our fi nancial assets, our services which roll relationships, and our people.” VOLUNTARY GUIDELINES FOR RUNNING CSR CSR initiatives were introduced in India by the mid 1990s and the fi rst voluntary code of corporate governance was a part of the former, an initiative known as the ‘Desirable Corporate Governance: A Code’, by India’s biggest business association – the Confederation of Indian Industry (CII). Ministry of Corporate
Affairs then led to a National Foundation for Corporate Governance (NFCG) in a joint understanding with Any sector has mainly three leagues – government, public and private. Private sector comprises of the entrepreneurs or the business companies or ‘the corporate’.
Corporate houses are usually the privately owned companies that are registered as commercial trading units, that work for monetary profi ts or self benefi ting motives.However, it is of relevance for society to note and appreciate the initiatives that thecorporate world takes as part of Corporate Social Responsibility (CSR), for welfare of the society as whole. Almost all the big Indian business houses are involved in CSR activities. CSR is not only about benefi ting the company one owns but also benefi ting the employees and the community, one is a part of. This is justifi ed by what Samuel J. Palmisano IBM Chairman, President and Chief Executive Offi cer, IBM says, “IBMers have always believed that when people think about how the world should work, they are inevitably driven to challenge the status quo, and to change it. And the resulting benefi ts fl ow not just to them and their organizations, but to their communities and global society” India, a developing nation, is today seen as a growing power in terms of business opportunities it provides to the world. Growing business or commercial activities along with social, ethical and environmental responsibility helps in long term sustainability, competence of high order and success of the company, as well as the society. This also indicates that that corporate houses, at large, are a composite part of society and have a role in sustaining a balanced ecosystem, favouring social
equity and advantage. In fact, CSR programmes are meant to hasten the process of societal development. According to Shantanu Prakash, MD & CEO, Educomp Solutions Ltd, “Today, business ethics and professional expertise are teaming up to contribute p all areas of our business– j g CII, the Institute of  Company Secretaries of India (ICSI) and the Institute of Chartered Accountants of India (ICAI). The aim of this foundation is to support good corporate governance practices and raise its standards, leading to stability and growth of corporate governance in India. According to recently reported attempts, Corporate Affairs Minister Salman Khurshid mentioned that Indian government is looking at how to make maximum companies adopt corporate social responsibility. It was reported that there are voluntary guidelines on CSR and corporate governance on government’s website available for discussion.
Additionally, as a rule, companies who have been earning over INR 100 crore maybe asked to contribute upto two percent of the profi t to the company. An eLearning module on Corporate
Governance is also under construction, which is to be fl oated by the Ministry of Corporate Affairs. All the activities under CSR units are taken up as voluntary actions over and above companies’ obligations to the law and society. Also, companies are provided with guidance for CSR initiative through ‘Voluntary Guidelines’ for CSR. These guidelines suggest that a CSR
policy should be developed by each g For implementation of the CSR activities the corporate houses identify the area of work, p y p y commercial house which should be in line with the business principles. It should involve participation of its employees, be approved by the authorities and involve stakeholder participation. Ethical conduct and processes along with accountability and transparency are encouraged to be inherent with the CSR activity. Companies ensure judicious use of resources–avoiding pollution, encouraging recycling, using resources optimally, supporting cleaner and productive ways of processing the daily chores–through their CSR programmes. CSR supports productive activities (both for social and economic growth of the communities). They work for the welfare of the society, especially for the so-called disadvantaged group, in areas such as education, livelihood, healthcare, and so on. It should not be just considered as a charitable activity but an effort for welfare of the whole community. For instance, in CSC, Sushmita Chakravarti says, “In India, CSC manages our CR activities though a committee called Binergy. Binergy is a thirty-plus member team of CSC employees (one member per fi ve hundred employees), who are democratically elected each year in a formal electoral process. Employees interested in being part of Binergy, create a manifesto, present their vision on CR to the CSC employees in India and are elected to lead the CR efforts. While Binergy leads and manages the CR efforts, volunteers – also CSC employees – on an ongoing projectto- project basis, work towards meeting the CR objectives. The overall Binergy team is headed by an executive with each
plan projects that they want to indulge in, set objectives to be in a particular time frame, stipulate a time limit for completion of the project, decide upon mechanisms for monitoring the initiative and rectify according to feedback collected. Evaluation and timely feedback would help rectify any challenges involved in
IBM REINVENTING ROGRAMME
“The IBM Reinventing Education
(RE) program globally, is driven
with the motivation to improve and
enhance the quality of schooling
in partnership with the local
governments in various countries.
Launched in 1994, this program is
now available in 25 cities throughout
the United States as well as in Australia, Italy, Ireland, Japan, Singapore, the United Kingdom, Vietnam, Mexico, Brazil, China and India. The RE program in India was initiated in 2006 with the primary focus on the continuous and ongoing professional development of teachers, integrating ICT and classroom transformation. The Reinventing Education programme in India is specially designed to align with the National goals for education reform in India as enshrined in the National Curriculum Framework 2005. NCF 2005 stresses on the
primacy of children’s experiences, their active involvement in the process of learning and application to the child’s environment. RE program is being implemented in partnership with the Andhra Pradesh Residential Educational Institute Society (APREIS) and Corporation of Chennai (CoC). One of the findings indicate that both in AP and in Chennai, the students are able to articulate what they have done. They are now able to talk rather fearlessly in front of the teachers and are able to explain ideas that they have worked through in the RE programme. In APREIS schools where the children have limited interaction with the outside world, the program is also improving the social skills of the students. It has helped in improving the children’s communication skills and confidence levels by enabling them to interact with each other as well as the teachers.” Mamtha Sharma, Manager CC&CA, IBM India 
CHALLENGES AND
OPPORTUNITIES WITH CSR
Companies executing CSR activities also deal with challenges that include- 1. Laws and Regulations – Different form of government rules, marked by different regions and political will. 2. Lack of requisite infrastructure and echnology. 3. Financial constraints due to lack of
cost effective resrouces. 4. Social and cultural barriers. Opportunities that CSR activities present are usually presented in form of community development approach. For instance, Shell Foundation’s work in South Africa, in Flower Valley, where an Early Learning Centre was created to educate and induce skills in children and adults of the community. CSR initiatives are also involved in providing for monetary donations and aid to the local community and oragnisations. CSR activities promote what is knon as ‘Creating Shared Value’, thereby making corporate success and social welfare as independent processes. For instance, in companies like CSC, the CSR activities have been reportedly chosen under the broad categories of community development, education, healthcare, environment and supporting people affected by natural calamities. The main criterion for chosing a project is based on the location. As put by Sushmita Chakravarti, “The projects should be in close vicinity to our people, since they run these projects.” For any business to sustain it needs a skilled and educated workforce, resources and effective laws, while for any society to thrive well economically and socially they need to be supportive of business houses, especially in order to create income. Sushmita Chakravarti, shares briefl y about one of the successful
projects by CSC – “One of CSC’s successful projects has been the adoption of backward villages (Sagarpaisa, Nayagaon, Lalpura, Chenchupally). This ongoing program has helped improve the quality of life in these villages by providing fi nancial aid, and more importantly volunteers to help develop the villages. One of the initiatives include constructing and maintaining primary schools in these villages, training an educated physically challenged member of the village to teach,  compensating the teacher, providing for books, stationery and uniforms for the students, organizing summer camps for extra curricular activities and regularly visiting the village school to mentor the children, tracking school education activities, and even tracking the career of the children passing out of the schools.” One of the implications of the above has been achievement of “100% literacy for the children of Nayagaon and Sagarpaisa villages.”

DISSEMINATING THE KNOWLEDGE
Most of the companies share the meaningful measures they take with population at large through what are known as the ‘Triple Bottom Line’ reports, that vary in the style of presentation. These reports provide details of the activities devised and implemented and
their impact over three dimensions of ‘people, planet and profi t’. On this criterion the social, ecological nd economic implications of the activities company has undertaken, with respect to human capital/ resources, natural resources and cost of capital utilised. Sushmita Chakravarti says, “People, planet and profi t is the other way that it is referred to in CR. This is how we do business in the 21st century. This is what the Gen Yers care about. This is what  ur customers care about. A growing number of investors perceive sustainability as a catalyst for enlightened and disciplined management.” Despite some of the best efforts from companies that have been working for welfare community at large, CSR in India is still at very early stage and has to be explored and understood by many. There is a need to change its concept from a charity proposition to a ‘must’

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