LEADERSHIP AND CORPORATE SOCIAL RESPONSIBILITY Dr. Bhaskar Chatterjee 11th January, 2013, Mumbai Defining Corporate Social Responsibility (CSR) (Wikipedia) Corporate social responsibility (CSR, also called corporate conscience, corporate citizenship, social performance, or sustainable responsible business/ Responsible Business)is a form of corporate self regulation integrated into a business model CSR policy functions as a built-in, self-regulating mechanism whereby a business monitors and ensures its active compliance with the spirit of the law, ethical standards, and international norms. CSR is a process with the aim to embrace responsibility for the company's actions and encourage a positive impact through its activities on the environment, consumers, employees, communities, stakeholders, and all other members of the public sphere who may also be considered as stakeholders. 2 Corporate India: Drivers of Economic Growth The Indian economy has gained a lot from the role that corporates have been playing. In recent years they have become: Key drivers of economic growth; Delivery mechanisms for change; Agents of innovation. Indian corporate houses today are pervasive and have tremendous reach cutting across geographies, ethnicities, culture, languages etc. 3 Already a Track Record for Corporates in CSR There are many outstanding examples of corporate CSR activity; Indian entrepreneurs and business enterprises have a long tradition of working within the values that have defined our nation’s character for millennia; Indian businesses have engaged in philanthropic and charitable activities even from pre-colonial days; However, in recent times, organizations in India have shown both innovation and business acumen in taking up CSR initiatives and integrating them into their business processes. 4 Development-Centric Agenda for Indian CSR Our CSR Agenda should be ours. What we do in CSR should have a strong Indian orientation and we must use our CSR initiatives to address our particular Social, Economic and Environmental challenges; Quite clearly the challenges of the nation should not and cannot be borne by government alone; Mitigation strategies will have to include businesses with their resources which can be channeled into a diverse array of programmes to address these problems and to bring about a sustainable future for all. 5 Synergy among Corporates There are a large variety of activities/programmes to which corporates may direct their energies and indeed many corporates have developed a great deal of momentum in areas of their choice; However, these efforts are largely individual; There should be a greater synergy among corporates to address some areas unitedly, for a greater impact - otherwise resources would be spread too thin for tangible outcomes to emerge; Combined efforts will lead to results that will be both demonstrable and measurable. 6 The Purpose of Inclusion of CSR in the Companies Bill The CSR provisions of the Bill seek to create an enabling environment; They will allow corporates to harness and channelise their core competencies as well as develop effective business models; They will promote and facilitate far better connect between businesses and communities. 7 The Purpose of Inclusion of CSR in the Companies Bill {Contd.} They will facilitate deeper thought and longer term strategies for addressing some of our most persistent social, economic and environmental problems; They will assist in synergizing partnerships between Corporates, Governments and Civil Society Organizations. 8 Catalytic Role of the Bill The Bill also provides great flexibility to business and industry for strategising and conducting their CSR initiatives; Intention of government and purpose of bill is not to make a rigid structure which will constrain the creativity and imagination of the corporates; It will actually enhance their efforts, provide an even broader platform and re-energize their efforts. 9 Possible CSR Activities (Schedule VII) Schedule VII of The Companies Bill draws attention to an illustrative list of activities that can be carried out under the CSR Agenda; It could be worthwhile to concentrate our energies on some aspects of development where tangible results can be achieved within a relatively short period of time; Some of these areas could be: Toilet and Sanitation Facilities particularly for girls; Education Projects; Provision of Health Facilities; Combating Malnutrition; Skill Development. in rural schools, 10 Project Mode Since the Bill contemplates measurability in rupee terms, corporates may well adopt the Project Mode to execute their Corporate Social Responsibility programmes. This would involve: Specific Allocation of Financial Resources; Baseline Survey; Project Preparation; Corporate CSR Plan; Project Monitoring; Impact Assessment; Third Party Evaluation. 11 National Foundation for Corporate Social Responsibility (NFCSR) Although there is a growing consciousness in the area of CSR among the Indian companies, there is a need to bring all the actors together so that they can collaborate to make a significant impact towards the national goal of inclusive growth and development; The NFCSR has been established at the IICA to help create a national platform for the corporate sector to work in partnership with the Government, Non-Governmental, Civil Society and local community organizations. 12 National Foundation for Corporate Social Responsibility (NFCSR) {Contd.} Would be a global gateway and would provide the following services to corporates in the field of CSR in a single-window mode: Knowledge and informational services; Assistance for formulating CSR projects; Impact Assessment and Social Audit of CSR projects; Preparing a cadre of Certified CSR Professionals; Training and capacity building; Rating of CSR performance and recognition through awards; Maintaining a Database of good practices; 13 Research, including action research. 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