Skip to main content

CSR: Too much insistence on technicalities undermines development work



By Moin Qazi*
In a free enterprise, the community is not just another stakeholder, but is in fact the very purpose of its existence. — Jamshedji Tata
When we flip back through the business history of the world, we find that all large mercantile communities were great patrons of the art of philanthropy. They regarded it a divine tradition. The world is witnessing a growing realization in businesses of an important need for playing an active role in improving the world for the better. Hence, a great deal of money has been flowing into the social sector. Like individual citizens who have moral and social responsibilities, businesses are being perceived as corporate citizens who need to commit a part of their time, talent and resources for the welfare of the society as they draw their sustenance from it. This idea has now been corporatised under the appellation, ‘Corporate Social Responsibility’ or better known by its acronym, CSR.
CSR is a very broad concept that aims at managing a business in a way that it contributes towards sustainable development by delivering social, economic and environmental benefits to all its stakeholders. It addresses many and various topics such as human rights, corporate governance, health and safety, environmental effects, working conditions and contribution to economic development. Whatever the definition is, the purpose of CSR is to drive change towards sustainability.
We are seeing the emergence of a new crop of mega donors who are upending long established norms in the staid world of big philanthropy. Not only are they increasingly willing to take on hot-button social and political issues, they also have a problem-solving and impact-making mindset. CSR is now being recognized as critical component to an organization’s values, its operating ethos, its business strategies and its purpose. Businesses are being measured on both on financial and social metrics.
The World Bank Council for Sustainable Development defines CSR as the continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as of the local community. The core idea of these different definitions of CSR is that companies should conduct their business in a manner that also addresses the broader social environment. As William Clay Ford Jr said, “Creating a strong business and building a better world are not conflicting goals – they are both essential ingredients for long-term success.”
There have been so many voices within businesses who believe that business must break out of its conventional preoccupation with profit and do more to meet the world’s pressing social needs. The chorus has been joined by leaders from civil society; government, policy think tanks and world bodies on education health and rehabilitation. Business leadership has acknowledged the demand for enlarged corporate responsibility in ways which can reflect a profound attitudinal change individually and collectively.
As Benjamin Javits observed in his famous book, “Ownerism: A Better World for All Through Democratic Ownership”, “There is no longer doubt that business feels it must contribute meaningfully to the social health of the nation. Our problem now is learning how to work more effectively, both in the total community and with our new partners from Government, labor, and the body politic.”
CSR is however not a new concept. Gandhi’s theory of the ‘trusteeship’ is grounded on the same principles that enshrine the CSR philosophy. His idea of Trusteeship rejects both the capitalist and communist systems as practiced today. Although he could not get enough time to spell out his entire philosophy, he considered trusteeship a comprehensive system that could replace both exploitative capitalism and bureaucratic statism because, as he himself said, “no other theory is compatible with Truth and Nonviolence.”Gandhiji used the analogy of a man owning an industry to elaborate his understanding of the idea. As a trustee, the owner was, first and foremost, expected to:
  • Work just like any other employee.
  • Look upon his employees as members of his family who would be jointly responsible for making management decisions.
  • To take no more than what he needs for a moderately comfortable life.
  • Provide healthy working conditions and proper welfare schemes for the workers and their families.
  • Make a moderate profit, a part of which would be devoted to the welfare of the community and the rest to the improvement of the industry.
  • Regard himself as a trustee of the consumers and ensure not to produce shoddy goods or charge unfair prices. This applied to the employees as well who need to work in an ethical manner.
  • Pass on the industry to his children or whoever he likes only if they agree to run it in the same spirit of the trusteeship.
The doyen of India’s industrialization, the legendary JRD Tata carried forward the Tata legacy of socially responsible business with still greater vigour when the corporate world in India had not even given a thought to it and considered Tata’s philosophy as a socialist ideal. He emphasized: “Let industry established in the countryside “adopt” the villages in its neighbourhood; let some of the time of its managers its engineers doctors and skilled specialists be spared to help and advise the people of the villages and to supervise new developments undertaken by cooperative effort between them and the company.”
The general sentiment for a long time was that for businesses, earning a profit should take precedence over ideals like, acting responsibly and ethically .many companies are paying only lip service to doing their bit.
India is the first country to mandate that the companies expend at least 2% of their net profits on special development projects. .It has a unique law— Corporate Social Responsibility (CSR) Rules in the Companies Act, 2013 —which came into effect on April 1, 2014.The mandatory funding applies to companies with a turnover of Rs 1,000 crore or those reporting a profit of over R s5 crore in a year
However, there is a crucial difference between the way CSR as implemented in western countries and in India. A generally accepted gold standard for CSR in the western world is that it must be closely integrated with a firm’s business strategy so that the programmes create a shared value for the company’s shareholders .In India, this linkage is explicitly prohibited for CSR; the focus restricted solely on contribution towards societal welfare.
The CSR rules in India also specify that expenditures that benefit the company directly or its employees will not qualify for CSR activities. The amount should be deployed directly for larger societal needs .The CSR rules require every company with a net worth of Rs 500 crore, or a turnover of Rs 1,000 crore or a net profit of Rs 5 crore or more during any financial year to constitute a CSR committee of the board of directors. This committee will recommend to the board a CSR policy as well as the amount of expenditure to be incurred on CSR activities and monitor the implementation of this policy. The company is required to disclose its CSR policy in its annual report and on the company’s website.
Experience the world over shows that CSR is more socially relevant when it is driven by altruistic motives rather than being a mandated policy commanding philanthropy. It is very difficult to legislate moral obligations have to be inculcated, not legislated. Laws can set the minimum standards, but they cannot create an environment or ambience for a philanthropic mindset. This is precisely the reason why we see marked aberrations in the CSR agenda of most corporations. Many businesses harbor a variety of secondary aims and often use CSR for boosting their social profile and business markets. Such lack of well-intentioned commitment has been detrimental to this noble philosophy.
Challenges do exist. It is true that since there are so many causes competing for attention, it may not be possible for organizations to have a universally inclusive mission. Studies suggest that charity leaders have a geographic bias with corporations homing in on projects closer to their headquarters. Consequently, more remote regions where development aid is acutely needed are being ignored. Politics can also skew priorities, with companies looking to gain political goodwill by funding government-led projects rather than initiating more socially relevant initiatives which are thirsty for funds.
According to India CSR Outlook Report 2018, there has been a substantial increase in Spending on Corporate Social Responsibility (CSR) which was Rs 8876 crore in 2017-18, as against Rs 8194 crore in 2016-17, Rs 7324 crore in 2015-16 and Rs 5775 crore in 2014-15.
Even as annual CSR expenditure is on the rise, the impact on the ground remains a matter of debate. CSR has usually been peripheral in most organizations and it is not woven into the texture of business. Further, it is not always necessarily transparent or mission oriented. It may be used for enhancing the brand reputation or to provide a cover of moral counter balance for brushing off a besmirched public image or for camouflaging dark acts. There is always a creative tension between social mission and business goals.
Moreover, a significant amount of any CSR expenditure comes with strings attached .There are terms that dictate exactly where and how funds must be used. While this may be appropriate in some cases, it reflects a serious lack of trust in the non-profit entities and hinders their ability to operate effectively. When donors insist that their money should go exclusively to the people served, there is not enough money left for the non-profit entities to focus on building their own organizations.
They are, therefore, unable to invest in talent, technology, systems, or reporting. Reporting requirements are often an onerous administrative burden on these small organizations which have to devote their scarce skills to educated, English-speaking personnel for writing reports for the donors rather than running the programmes.
There are so many small organizations that handle all of their international consultancy work in-house. They could easily have given contracts to the swelling band of starry-eyed consultants but they chose not to. Instead they send their own staff, so what the world sees of these organizations is not polished international jet-setters but men of modest backgrounds and Basic English language skills, lacking fluency but single-mindedly committed to getting on with the job. They are happy to work long hours as long as they can find somewhere to cook essential food and sleep peacefully. Having come up the hard way, they are used to being relocated to different projects in the most inhospitable environments.
These development agents are the right conduits for reaching the deeper backwaters which have tougher geographical terrains and are centres of social schisms and extremist ideologies. In such regions donors also need go beyond the sacred Trimurti -sustainability, replicability and scalability which should be restricted to mainland organizations. Too much insistence on technicalities leaves genuine development work out of the CSR net. A worm’s eye view is as critical as a bird’s eye view to ensure that projects deliver visible and lasting outcomes and a leave a larger and lasting imprint.
A more important aspect of CSR that needs greater attention is the need for embedding CSR values in employees. It is only when employees align their social philosophy with that of their employers that real benefits of CSR can materialize. A meta-analysis of 199 studies on volunteering programs, covering 152 organizations, 44 industries, and 26 countries, conducted by Gallup suggested that a high employee engagement in organizations’ employee volunteering program increased business performance numbers across the board: Profitability increased by 16 percent per productivity by 18 percent, customer loyalty by 12 percent and quality by an incredible 60 percent.
Experts share some ways in which volunteering contributes to business success:
  • Recruiting Advantages: Millennial prefer employees whose community activities match their values.
  • Better productivity: Increases employee morale and satisfaction, boosting productivity.
  • Better corporate visibility: Creates the image of a socially responsible workforce.
  • Vision building: Leads to broadening the mental horizon of employees.
  • Team Spirit: Builds team spirit and camaraderie within teams.
  • Empathy: Leads to employees inculcating empathy becoming more sensitive to both peers and clients.
  • Better client engagement: Companies keen to work with socially responsible companies.
A sincerely and honestly practiced charity always delivers rich dividends in the long run. That is the lesson we learn from both philosophers and business leaders. It is wise to remind ourselves again of the advice of Henry Ford: “A business absolutely devoted to service will have only one worry about profits. They will be embarrassingly large.”
---
*Development expert

Comments

TRENDING

Zakir Naik tumult, Catholic Church power abuse: will Anwar Ibrahim save Malaysia?

Anwar Ibrahim By Jay Ihsan*  Anwar Ibrahim, a hardcore reformist who took a punch to his eye in 1998 from then inspector-general of police, Rahim Noor, has finally been given the mandate by Malaysians to serve as the nation's 10th prime minister. Anwar knows too well the burden of staying true to both trust and faith the people have in him requires every once of commitment and dedication. The question is will he be apologetic for his transgressions enroute to "rebuilding" Malaysia? In his overzealousness to get the job done, Anwar, 75, needs to safeguard every bit of gumption to address prickling issues plaguing the safety of the nation especially those involving communal sensitivities. For one, dare Anwar get rid of terrorist hate preacher and fugitive Zakir Naik for inciting religious unrest in Malaysia? In November 2016, India’s counter-terrorism agency filed an official complaint against Naik, holding him responsible for promoting religious hatred and unlawful activi

Although sporting genius, Wasim Akram was mascot of cricket globalisation era

By Harsh Thakor*  Since Independence India and Pakistan produced a galaxy of cricketing stars that permeated cricketing artistry of legendary heights. Amongst this bunch.Wasim Akram manifested pure cricketing genius to the greatest height.I speculate how India’s fortunes would have changed had partition not taken place and Wasim playing for India. Wasim Akram explored realms untranscended in bowling wizardry, like a painter devising new art forms or a scientist experimenting. He simply re-defined the art of reverse swing, reversing the ball in and out. There were bowlers quicker, more accurate and with better records, but none equalled Wasim in an all-round package. He was more lethal with a new and old ball than any fast bowler ever. Wasim could produce balls that were surreal, with his reverse swing, defying laws of bio mechanics He was simply the epitome of versatility, possessing a repertoire of six different deliveries within an over itself, disguising deliveries in the manner of

Alarming US data on child mental health: Wake-up call to end social malaise

By Bharat Dogra  If 1 out of 2 high school girls feel persistently sad or hopeless and one out of six students plan suicide in a year, isn’t it time for a society so affected to look inwards at what has gone wrong, so that at least, and as a first step, the causes of such a dismal state of affairs can be identified correctly? After all, effective remedial action depends first and foremost on a proper identification of causes. This is all the more necessary in a situation when, as this alarming official data for year 2019 for USA tells us, in addition there is an incredibly high rate of increase of these problems. According to the data of the  (the latest such data available at present and also quoted by the USA Surgeon General in the advisory issued by him in 2021), in 2019 37% of all high school students and half of female students reported persistent feelings of sadness or hopelessness. What is more, within a decade (2009-2019), this had recorded a 40% increasing, rising from 26% to

Floods: As ax falls on most vulnerable, Pak seeks debt cancellation, climate justice

By Tanupriya Singh  Even as the floodwaters have receded, the people of Pakistan are still trying to grapple with the death and devastation the floods have left in their wake. The floods that swept across the country between June and September have killed more than 1,700 people, injured more than 12,800, and displaced millions as of November 18. The scale of the destruction in Pakistan was still making itself apparent as the world headed to the United Nations climate conference COP27 in Sharm el-Sheikh, Egypt, in November.  Pakistan was one of two countries invited to co-chair the summit. It also served as chair of the Group of 77 (G77) and China for 2022, playing a critical role in ensuring that the establishment of a loss and damage fund was finally on the summit’s agenda, after decades of resistance by the Global North. “The dystopia has already come to our doorstep,” Pakistan’s Minister for Climate Change Sherry Rehman told Reuters. By the first week of September, pleas for h

Implementing misleading govt order to pollute Hyderabad's 100 year old reservoirs

Senior activists* represent to the Telangana Governor on GO Ms 69 dated 12.4.2022 issued by the Municipal Administration and Urban Development (MA&UD), Government of Telangana: ‘...restrictions imposed under para 3 of said GO Ms 111 dated 8.3.1996 are removed...’: *** Ref: GO Ms 111 dated 8.3.1996: ‘To prohibit polluting industries, major hotels, residential colonies or other establishments that generate pollution in the catchment of the lakes upto 10kms from full tank level as per list in Annexure-I...’ We come to your office with grievance that GO Ms 69 dated 12.4.2022 issued by Government of Telangana not only contains false information issued ‘By Order and in the name of the Governor of Telangana’ , without any scientific or expert reports, but also that implementation of the said GO is detrimental and can be catastrophic to the Hyderabad city as two 100 year old reservoirs Osman Sagar and Himayath Sagar were constructed as dams on river Moosa and river Esa, with the first and

Qatar World Cup has a strong Bangladesh connection: stadium construction, t-shirts

By Mashrur Siddique Bhuiyan*  The FIFA World Cup fever has unquestionably cut through the minds of mass people all over the world. Stadiums in Qatar are buzzing with football fans and athletes representing their countries at the “Greatest Show on Earth". The magic of the FIFA World Cup is so enormous that even being unable to participate does not matter much to the fans who support different nations. This is one of the highest viewed events in the world, with the 2018 event viewed by about 3.6 billion people worldwide. But this crowd is not aware of the contribution of migrant workers who helped build the very stadiums where the matches are playing in. Qatar won the bid in 2010 to host the FIFA World Cup 2022, which got the oxymoron of celebration and controversy. This also created the potential for Qatar to Showcase its monumental economic achievements and unique culture on the global stage. The motto for Qatar’s bid team in 2010 was ‘Expect Amazing’ and migrant workers across th

Why foreign diplomats must maintain diplomatic etiquette, protocol in Bangladesh

By Kamal Uddin Mazumder*  Foreign governments and organizations are not allowed to dictate how a sovereign country like Bangladesh should run its politics. The 12th national parliamentary elections are drawing near, and the election wind has started to blow in Dhaka. The political parties have already begun to plan their voting strategy through a variety of events. However, this time, the diplomatic community in Dhaka is very active. A number of Western ambassadors frequently meet with government departments, political party representatives, the Election Commission (EC), and members of civil society in Dhaka. At numerous forums, they discuss upcoming elections' management, fairness, and impartiality -- issues that are unquestionably domestic to Bangladesh and in no way fall under the purview of diplomacy. Additionally, it has been noted that diplomats have made public remarks on these subjects in front of the media. It raises the question of how much authority diplomatic protocol h

Bangladesh's ties with Myanmar, Nepal, China need connectivity with India's NE states

By Samara Ashrat*  On 26th November, India's External Affairs Minister S Jaishankar said that India is trying to improve trade and connectivity with Bangladesh and Myanmar on his two-day visit to India's Northeast region. He emphasized the importance of linking Northeastern India to the rest of the nation and reiterated Delhi is working to improve connectivity and infrastructure in the region. By taking the G20 presidency India will try to showcase the true spirit of the Northeast to the world, with its tourism benefits. But, the umbilical cord between the Indian mainland and North Eastern Region is Chicken's Neck or Siliguri corridor which brings Bangladesh into the Indian equation of northeastern development. Not only that, Bangladesh has very close relations with West Bengal, Assam, Meghalaya, and Tripura in terms of language, culture, and history. These factors make Bangladesh an inextricable element of the development of the northeastern states. Tourism Sector and Con

25 years of CHT peace accord: A glorious chapter of conflict resolution in Bangladesh

By Kamal Uddin Mazumder*  Conflicts between the Bangladesh army and Shanti Bahini persisted in the Chittagong Hill Tracts for more than two decades. On December 2, 1997, Parbatya Chattagram Jana Samhati Samiti (PCJSS) and the Bangladeshi government signed the CHT Accord, putting an end to the violent armed conflict and improving the life of a lot of the people there. It has been made possible through just seven meetings under the worthy leadership of Sheikh Hasina. The historic peace agreement created an atmosphere of peace in the mountainous region. An atmosphere of peace has been established by ending the armed conflict. The geographical features and ethnic diversity of Chittagong Hill Tracts (CHT) are distinctive. The 13,184 square kilometer territory is bordered by Myanmar and the Indian state of Mizoram on the East and Tripura on the North. With its 1.6 million people, it entails great importance to Bangladesh for its geopolitical location. Due to the conflict-prone Northeast Indi

A classic, 'Gandhi' ignores merciless cruelty unleashed on militant freedom fighters

By Harsh Thakor  The movie ‘Gandhi’ produced by Richard Attenborough, which was released 40 years ago on November 30th, 1982, was classic in it's own right. Ironical that it took an Englishman to embark upon the making of a film on this legendary figure. I can't visualize a better pictorial portrayal of Gandhi's life or an actor getting in the skin of the character an exuding the mannerisms as actor Ben Kingsley. Episodes are crafted and grafted surgically, illustrating how Gandhi wove fragmented bits into a cohesive force, to confront he British empire. Most boldly the movie unfolds how British colonialism subjugated the Indian people to barbaric cruelty. With great mastery the cinematography captures the vast Indian landscapes and essence of livelihood of Indians under colonial rule. The movie most illustratively shows the crystallisation of anti-colonial fervour from the embryonic stage and how it fermented into an integrated movement. In a most subtle manner it illustr