The Socially Responsible Corporate

There is one kind of charity common enough among us... It is
that patchwork philanthropy which clothes the ragged, feeds the poor, and heals
the sick. I am far from decrying the noble spirit, which seeks to help a poor or
suffering fellow being... what advances a nation or a community is not
so much to prop up its weakest and most helpless members, but to lift up the
best and the most gifted, so as to make them of the greatest service to the
country

                                                 Â
-Jamsetji Tata

The Tatas are one of the largest industrial conglomerates in
India, yet the fame of the group is not indebted to company's economic
prowess. The name symbolizes trust and ethicality, an intangible asset that has
accumulated over a long period of time. Not many years in the past, employees
would put up with lower salaries, just because it happened to be a Tata company.

In the late nineteenth century, when Jamsetji Nusserwanji Tata
founded the group, corporate ethics or social responsibility were coins that
were yet to be minted. He talked about human resource management, giving back to
the community and philanthropic initiatives. His successors followed suit to
make Tata a trusted brand name.

Sadly for India, there have not been many such stories. A very
few individuals did shine through their philanthropic efforts. The whole idea of
companies returning to their community was something that was fairly unheard of.
Making ad hoc donations to a few NGOs or arranging a blood donation drive was
the maximum that a company indulged in.

Trends Elsewhere

Globally, for the past many years, companies have embraced concepts like CSR
or corporate philanthropy. CSR basically boils down to how a company evaluates
the macro impact of conducting business in a locality, and conducts business in
a manner that it meets all the regulatory and mandatory requirements as well as
non-regulated spheres-internal and external-that could be affected by
specific actions or business policies.

Most of the CSR activities in foreign countries are driven by
regulatory needs and requirements. Thanks to stiff trade policies, most of the
companies have to ensure that the workforce is not exploited, the environment is
not polluted, etc. For instance, most of the international treaties are pretty
stern on the issue of child labor.

Beyond that many companies are coming to realize that CSR could
have immense business value as well. Thus, companies like Wal-Mart, McDonalds,
and Microsoft are not only doing things for the community at large, but also
they are increasingly talking about it.

CSR Vs Corporate Philanthropy

CSR is often confused with corporate philanthropy. But there is a big
difference between the two; donating for causes and charities falls under the
ambit of philanthropy but CSR is an assimilation of all these and more. Thus, a
company in spite of making heavy donations for various charitable causes might
be rated rather lowly on the CSR index simply because it does not treat it
employees well.

In his bestseller, "The Living Company," author Arie
de Geus compares an organization to an individual. He talks about how
individuals are often conscious about the environment they exist in. Similarly,
corporate entities need pay attention to the overall economic condition of the
locality they function in.

de Geus compares two organizations, namely one that is centered
on maximizing gains and the other that is conscious about social upliftment.
With time, the company that was solely concerned about profitability withers
away, while the second one continues to change with times and lives on for much
longer span.

Desi Awakening

To be fair, off late Indian companies are waking about concepts like CSR and
are increasingly talking about such initiatives. The good news is the new
sector, namely the IT industry is showing the path to corporate India. More and
more tech companies are taking active interest in CSR related projects.

"Being a part of the society, it's not just the
individuals who can make a difference to the people, to the environment or to
various other institutions around them. Giving back a part of the benefits that
the company got over a period of time from the society and building an ecosystem
with strong values is a responsibility and not a service," says Pradip K
Dutta, MD and president, Synopsys.

Dittos Neelam Dhawan, MD, Microsoft India, "Today CSR is
emerging to be a core focus area for an increasing number of organizations who
are looking at new and innovative ways to contribute to the communities they
operate in, going beyond just helping the immediate customers and shareholders.
For us at Microsoft this sense of broader responsibility for communities we
operate in is reflected in all our community engagement programs today and
underlines our mission of building a digitally inclusive society in India,"
she says.

CSR basically boils down to how a company evaluates the macro impact of conducting business in a locality, and conducts business in a manner that it meets all the regulatory and mandatory requirements as well as non-regulated spheres

Role of Multinationals

Barring a top few domestic IT companies, it is the MNCs that are doing a
bulk of work in the CSR domain. With the Bill & Melinda Gates Foundation,
Microsoft is working with the underprivileged segments of society on issues like
education and healthcare.

"Project Jyoti is the dedicated CSR program that marks a
continuation in this journey. Project Jyoti aligns with Microsoft's global
program — Unlimited Potential wherein we are making a long-term investment of
more than $1 bn in cash and software over the next five years to aid technical
skills training and lifelong learning for communities around the world,"
says Dhawan. Microsoft in India till date has worked with over 10 NGOs and has
made software and cash grants amounting to a total of Rs 30 crore, she mentions.

Intel is another company that has been fairly active in India.
"Under the umbrella of the Outreach program, Intel in India has been
working to increase literacy, specifically in science, mathematics and computer
literacy. Our main focus has been in the K-12 (children up to 12 years). Intel
Teach, a program where we have trained around 6,00,000 teachers in 14 states in
India," says Timothy McGuill, Asia Pacific Region PA (India Public
Affairs), Intel.

IBM too has initiated a host of CSR projects in India mainly
targeted at increasing computer literacy among the children. "IBM's
philosophy is not just to get involved in community, but also to stay involved
in order to bridge the digital divide that exists in the society. IBM's
Community initiatives-internationally and in India-focus on education and
lesser-privileged children," says Jalaja Pillai, manager (Corporate
Community Relations), IBM India.

The database major Oracle has tied up with a number of schools
and universities for different CSR projects. "I am very happy and hopeful
about our participation in these projects. As these projects have the potential
to have a much wider impact on the society and that is what matters really in
the end," said Krishan Dhawan, MD, Oracle India.

The Triumvirate

The three biggies of Indian IT are carrying the flag for domestic players in
India. Of these Infosys and Wipro, have carved special entities to take care of
CSR activities. Infosys Foundation and Azim Premji Foundation are the two
entities working in more or less similar domain, namely healthcare, social
rehabilitation and rural upliftment, learning and education, etc.

Very strangely though, the biggest IT company in India does not
seem to be too hot in the CSR space. It has few projects to its credit and its
CBFL (computer based functional literacy) project, brainchild of former TCS
chairman, FC Kohli, has been quite well received.

Satyam, the company with its philanthropic arm Byrraju
Foundation is doing a host of healthcare and education projects specifically in
the under privileged areas of Andhra Pradesh and other states.

CSR Drivers

According to NASSCOM Foundation's Catalysing Change (2005-06) report;
founder's vision continues to remain the primary driver for CSR in Indian IT
industry. While company's reputation came third (15%), business challenges
came in fourth (13%). Other issues were termed as the premier driver for CSR by
companies.

It is fairly obvious that the CSR in India is still linked to
individuals, so Narayana K Murthy is a driving force behind Infosys Foundation,
while Azim Premji is the inspiring light behind Wipro's philanthropic arm.
Corporates are yet to awaken truly to the underlying economic benefits that can
accrue from CSR.

Concerning Issues

IT companies in India are quite concerned about child relief projects which
are the most popular avenue for companies to work on. From Intel to Satyam,
every company is working in this space. The other major interest area for
companies is disaster relief as most of these corporates donate heavily towards
such causes. For instance, Intel had adopted a whole village stuck by Boxing Day
Tsunami.

Employee Support

Most of the programs conducted by these corporates are completely dependent
on employee participation. Many of the companies encourage their employees to
take up volunteer work. "Xansa CSR is almost entirely volunteer driven with
Xansa staff being the key implementers of the various CSR initiatives. More than
400 employees are actively involved in these programs," mentions Louis
Hall, COO, Xansa India.

By involving employees, companies achieve two things; firstly it
results in better employee morale and secondly these employees turn into brand
ambassadors for the company.

Is It Branding Exercise?

This brings us to the essential question, is CSR just another branding
exercise, a way to create a favorable impression among the stakeholders and
public at large? That was a view prevalent a few years back, but gradually is
changing as well. While HR dept is often entrusted with the task to carry out
CSR projects, a few companies have gone ahead and established a small team to
look into such activities.

One such company is CSC. There is a social services committee (SSC)
at CSC that takes care of all such projects. "The SSC at CSC analyses
projects on multiple parameters including on the parameter of their financial
viability. Most decisions on CSR are taken in the beginning of the SSC term at
CSC, which lasts six months each, but may be taken in the middle of the term as
well," says Bidyut Kanti Thakur, Asst. VP, CSC India / Mentor SSC, CSC.

George Paul, executive VP, HCL Infosystems feels that CSR goes
beyond branding and advertising and most of the companies are realizing this.
"CSR to HCL Infosystems is all about contributing and returning back to the
society. We strive to improve and return back to the society, of which we are
part of," he says.

Interestingly, Pillai from IBM summarizes the issue beautifully
and makes a business case for CSR. "CSR makes sound business sense. A
growing number of companies and institutions in India are seeking to link their
own growth and survival to the social cause they try to promote," he says,
adding, "There is a much larger reason for companies investing in CSR,
grounded in the reality that business cannot succeed in a society which fails.
Public acceptance of the operations of any business, particularly in an alien
society, often determines the success or otherwise of corporations."

Awareness of Responsibilities

In a country like India, there is never an end to what can be achieved. The
good thing is that companies are increasingly becoming aware of their
responsibilities to the society at large. As Rufina Fernandes, CEO, NASSCOM
Foundation says, "one does not need to be a big company to make a
difference. A lot many so-called small companies do a whole world of good even
with their limited capacities." Companies like Joppassna and Acceltree are
a good example of this.

Yet some challenges persist, as Mcguill from Intel says,
"Currently, the CSR activities are happening in lot isolation. These dots
need to be connected in someway." "There is a lot of overlap that
could be avoided and needs to be avoided," he added.

The government also needs to be more aware of CSR and to
implement policies and strategies that promote it. Companies could also look at
reporting their CSR spend in the annual reports according to international
benchmarks like, ILO Conventions, UN Millennium Development Goals, etc.

All in all, the seeds have been sown and the saplings are taking
root. The results will only be visible a few years down the line. Coming back to
Jamshetji, when he started off Tata, he could have barely guessed that his
enterprise would be so profitable and so respected even a century later. But as
highlighted earlier, it is not how much money you make, but how you make that
money and how you spend it; is all the makes a difference.

Shashwat Chaturvedi/CyberMedia
News with inputs from Shipra Arora


maildqindia@cybermedia.co.in