CSR-Professional India

The problem with corporate social responsibility (CSR) is that nobody is very clear about what exactly it encompasses. The Indian government has been trying to make it mandatory for companies to spend at least 2% of net profits on CSR. Facing strong criticism, it gave up the effort in mid-July and made the spending voluntary. But the debate continues.

If the proposed rule had come into play, the government would have had to spell out what constitutes CSR. That would have gone some way in removing the vagueness that exists about the term. Today, CSR to some companies means providing lunch to employees. To others, it's about tackling global warming and environmental issues. Instead of defining CSR, the Indian government recast it as "responsible business" in a set of voluntary guidelines for firms released July 8 by then Union minister of corporate affairs Murli Deora.

The recent unsuccessful effort isn't expected to be the last word on mandatory CSR spending, however. In meetings with industry, Deora has repeatedly expressed the personal view that CSR should be compulsory. In the latest round of recommendations, the government asks that companies keep tabs on CSR spending and disclose it to their principal stakeholders.

The CSR measures are actually part of a new Companies Bill that has been in the works for several years. The Companies Act of 1956, which is currently the rule of law, has several clauses inappropriate to the current business and economic environment. A revision process was started in October 2003 and a Companies Bill 2008 was tabled in Parliament. That legislation lapsed with the dissolution of the Lok Sabha (the lower house of Parliament) in 2009. A new bill -- the Companies Bill 2009 -- has been tabled. It is wending its way slowly through various committees.

While the Companies Bill contains many provisions that are of great importance to industry, it's the CSR piece that has created the most debate. Deora's predecessor, Salman Khurshid (now Union minister for law), at one time supported making the spending mandatory. Later, he veered around to the view that if CSR spending figures are made public, it will put adequate peer pressure on the corporate laggards.

Industry has been almost totally against a mandatory clause. The Federation of Indian Chambers of Commerce & Industry (FICCI) has suggested tax breaks instead for those who meet the voluntary targets. Rival chamber the Confederation of Indian Industry (CII) says that compulsory corporate responsibility would be counterproductive. "Companies may resort to camouflaging activities to meet such regulations, particularly during recessionary periods and economic downturns," argues the lobbying group.

India's philanthropic community is also against compulsory CSR. "It is a crazy idea," says Dhaval Udani, CEO of non-governmental organization (NGO) GiveIndia. "Once you make it mandatory, people will find ways and means to get out of it. The rules will be so vague that the reporting will be even vaguer." Deval Sanghavi, co-founder & CEO of Dasra, a strategic philanthropy foundation, agrees. "I am not in favor of mandatory CSR. When you make things mandatory, the chances of their not being done are greater," he notes.

Industrialist Adi Godrej adds, "It's good to say that [CSR] is desirable. Then people should decide [what to do] on their own." Philanthropist Rohini Nilekani is more critical. "I just don't get it," she says. "This is outsourcing of governance. This is taking the failure of the state and the corporates and trying to create a model out of it. If you want, you tax the corporates and put the money into social programs. But you can't dictate CSR."

The world over, very few countries have a CSR requirement; Saudi Arabia is possibly the only exception. "The laws in developed countries do not stipulate mandatory CSR contributions," according to KPMG partner (development sector practice) Sudhir Singh Dungarpur. "In the recent past, many European countries have specified that companies must include CSR information in their annual reports."

Blurred Boundaries

India has a tradition of corporate philanthropy. The trouble is that somewhere along the way, the lines between giving and CSR have grown hazier. "Corporate philanthropy and CSR are really two different things, but get blurred, particularly in India," Dungarpur notes. "CSR should actually relate to the way you conduct your business, whereas it gets confused with giving to the local communities in which you operate." He, too, is against a government mandate. "Generally the carrot approach -- where corporates understand the value in focusing on philanthropy and act upon it in that regard -- is better than the stick approach. It is not necessarily the quantum of funds spent that matters, it is how you spend it." Adds Parul Soni, executive director and practice leader at Ernst & Young (India): "CSR is a journey and not a destination."

"I don't think there is a clear distinction," between philanthropy and CSR, says Arpan Sheth, Mumbai-based partner with Bain & Company and the author of Bain's recently-released "India Philanthropy Report 2011". "It's like a Venn diagram where there's overlap between the two. I think in many ways, in India in particular, CSR is almost a 100% overlap with whatever the promoter family's passions are."

Recently, the government also sought to include vocational training for employees as part of CSR. But that term, too, is difficult to define. Would Infosys, which runs a huge university of sorts for entry-level employees, qualify? Or is would the vocational training umbrella only include those who are taught manual skills? The first government paper on CSR -- released by the ministry of corporate affairs in 2009 -- also talks of health, cultural and social welfare, and education coming under the CSR head.

Indeed, just about everyone sees CSR through a different lens. When Bill Gates and Warren Buffett came to India earlier this year to popularize their Giving Pledge, which asks the wealthy to commit to giving the majority of their fortunes to philanthropy, they told Indian companies that the effort was not CSR but CSC -- corporate social compulsion. An Ernst & Young white paper titled, "The Emerging Role of Business -- Not Just for Profit," offers other options: "CSR could be and is used synonymously with terms like corporate responsibility, corporate citizenship, sustainable responsible business, corporate social performance and corporate sustainability."

Stepping into the breach is the Institute of Chartered Accountants of India (ICAI). The accounting regulator has set up a subcommittee to identify what should come under the CSR umbrella and what shouldn't. But that effort has spawned its own debate with some others questioning ICAI's right to be heard.

The arguments will likely continue because, as a white paper by KPMG and the Associated Chambers of Commerce and Industry of India (ASSOCHAM) presented at the first International Summit on CSR held in New Delhi in 2008 put it: "CSR is comprehended differently by different people." The report -- titled, "CSR: Towards a Sustainable Future" -- noted that until the 1990s, CSR was dominated by the idea of philanthropy and that business efforts were often limited to one-time financial grants. "Moreover, businesses never kept the stakeholder in mind while planning such initiatives, thereby reducing the efficacy and efficiency of CSR initiatives," according to the report. "However, over the past few years, the concept of CSR has been changing. There has been an apparent transition from giving as an obligation or charity to giving as a strategy or responsibility."

The View from Delhi

When former minister of corporate affairs Khurshid released the 2009 guidelines he noted that though India's business sector has generated wealth for shareholders for decades, the country continues to grapple with problems of poverty, unemployment, illiteracy and malnutrition. "Corporate growth is sometimes seen as widening the gap between India and Bharat [rural India] through its income-skewing capability," Khursid said. "This gap needs to be bridged. While the government undertakes extensive developmental initiatives through a series of sectoral programs, the business sector also needs to take the responsibility of exhibiting socially responsible business practices that ensure the distribution of wealth and the well-being of the communities in which the business operates."

A report from global accounting and consulting firm Grant Thornton that used data collected in late 2010 and early 2011 noted that CSR activities across the world have increased dramatically in recent years as "businesses realize their value not only commercially, but also in terms of boosting employee value, attracting staff and cutting costs." Incidentally, "Saving the planet" came in sixth in the survey of drivers of CSR. The Grant Thornton International Business Report was launched in 1992 and now covers over 11,000 respondents per year in 39 economies.

Despite this seemingly irreconcilable divergence, some management thinkers feel a meeting of minds is possible. In a 2006 Harvard Business Review article titled, "The Link between Competitive Advantage and CSR," authors Michael E. Porter and Mark R. Kramer argue that creating shared value (CSV) should take precedence over CSR. "CSV should supersede CSR in guiding the investments of companies in their communities," they wrote. "CSR programs focus mostly on reputation and have only a limited connection to the business, making them hard to justify and maintain over the long run. In contrast, CSV is integral to a company's profitability and competitive position. It leverages the unique expertise and resources of the company to create economic value by creating social value."

Developing an Action Plan

Whatis an action plan?

Whatare the criteria for a good action plan?

Whyshould you develop an action plan?

Whenshould you develop an action plan?

Howto write an action plan 

Whatis an action plan?

Insome ways, an action plan is a "heroic" act: it helps us turn ourdreams into a reality. An action plan is a way to make sure your organization'svision is made concrete. It describes the way your group will use itsstrategies to meet its objectives. An action plan consists of a number ofaction steps or changes to be brought about in your community.

Eachaction step or change to be sought should include the following information:

What actions or changes will occur Who will carry out these changes By when they will take place, and for how long What resources (i.e., money, staff) are needed to carry out these changes Communication (who should know what?)  What are the criteria for a goodaction plan?

Theaction plan for your initiative should meet several criteria. Is the actionplan:

Complete? Does it list all the action steps or changes to be sought in all relevant parts of the community (e.g., schools, business, government, faith community)? Clear? Is it apparent who will do what by when? Current? Does the action plan reflect the current work? Does it anticipate newly emerging opportunities and barriers?  

Whyshould you develop an action plan?Thereis an inspirational adage that says, "People don't plan to fail. Insteadthey fail to plan." Because you certainly don't want to fail, it makessense to take all of the steps necessary to ensure success, includingdeveloping an action plan. There are lots of good reasons to work out thedetails of your organization's work in an action plan. They include:

To lend credibility to your organization. An action plan shows members of the community (including grantmakers) that your organization is well ordered and dedicated to getting things done. To be sure you don't overlook any of the details To understand what is and isn't possible for your organization to do For efficiency: to save time, energy, and resources in the long run For accountability: To increase the chances that people will do what needs to be done  

Whenshould you create an action plan?Ideally,an action plan should be developed within the first six months to one year ofthe start of an organization. It is developed after you have determined thevision, mission, objectives, and strategies of your group. If you develop anaction plan when you are ready to start getting things done, it will give you ablueprint for running your organization or initiative.

Remember,though, that an action plan is always a work in progress. It is not somethingyou can write, lock in your file drawers, and forget about. Keep it visible.Display it prominently. As your organization changes and grows, you will wantto continually (usually monthly) revise your action plan to fit the changingneeds of your group and community.

Howto write an action planPreparingyour plan

1.Determine what people and sectors of the community should be changed andinvolved in finding solutions.If you have been using the VMOSA (Vision, Mission, Objectives, Strategies,Action Plans) model, you might have already done this, when you were decidingupon your group's objectives. Again, try to be inclusive. Most of the healthand development issues that community partnerships deal with arecommunity-wide, and thus need a community-wide solution. Possible sectorsinclude the media, the business community, religious organizations, schools,youth organizations, social service organizations, health organizations, andothers.

Somemembers of the community you might consider asking to join the action planninggroup include:

Influential people from all the parts of the community affected by your initiative (e.g., from churches and synagogues, the school system, law enforcement, etc.) People who are directly involved in the problem (e.g., local high school students and their parents might be involved in planning a coalition trying to reduce teen substance abuse) Members of grassroots organizations Members of the various ethnic and cultural groups in your community People you know who are interested in the problem or issue Newcomers or young people in the community who are not yet involved Let'sconsider some of the people who were involved with the planning group for thefictional Reducing the Risks (RTR) Coalition that hopes to reduce the rate ofteen pregnancy. Some of the members of this planning group included teachers atthe local high school, local teenagers and their parents, members of theclergy, counselors and school nurses, staff of the county health department,and members of youth organizations, service agencies, and other organizationsthat focus on youth issues.

2.Convene a planning group in your community to design your action plan. This might be the same group ofpeople who worked with you to decide your group's strategies and objectives. Ifyou are organizing a new group of people, try to make your planning committeeas diverse and inclusive as possible. Your group should look like the peoplemost affected by the problem or issue.

Onceeveryone is present, go over your organization's:

vision mission objectives strategies targets and agents of change (e.g., youth, parents and guardians, clergy) proposed changes for each sector of the community (e.g., schools, faith community, service organizations, health organizations, government) 3.Develop an action plan composed of action steps that address all proposedchanges. Theplan should be complete, clear, and current. Additionally, the action planshould include information and ideas you have already gathered whilebrainstorming about your objectives and your strategies. What are the steps youmust take to carry out your objectives while still fulfilling your vision andmission? Now it's time for all of the VMOSA components to come together. Whilethe plan might address general goals you want to see accomplished, the actionsteps will help you determine the specific actions you will take to help makeyour vision a reality. Here are some guidelines to follow to write actionsteps.

Membersof the community initiative will want to determine:

What action or change will occur Who will carry it out When it will take place, and for how long What resources (i.e., money, staff) are needed to carry out the change Communication (who should know what) Example: The RTR Coalition's Action Plan (a sample)

One community change sought by this coalition to prevent teen pregnancy was to increase publicity about contraception and unwanted pregnancy at the local high school.

What action or change will occur: Hanging posters, displays, and other information about contraception and the facts about unwanted pregnancy in the hallways of the local high school. The posters and other information will become a permanent part of the high school. Posters and information will be regularly changed as new materials become available. Who will carry it out: A sub-committee comprised of parents and guardians, teachers, students, and coalition members will be responsible for maintaining the displays. The coalition as a whole will work towards finding funding to purchase the materials. Maria and Alex of the schools action group will be responsible for researching and ordering the materials. By when will it take place, and for how long: The coalition will try to have posters hanging and displays visible within six weeks of deciding on the action step (2/19/99). What resources are needed to carry out the step: The coalition will approach the school district to request funding for the project. Otherwise, the group will seek funding from other sources such as foundations and local businesses to finance the program. Communication about the action step. The school principal and leadership of the Parent-Teacher Organization (PTO) should be given information about this planned change. Thingsto note about this portion of the RTR action plan:

It appears complete. Although this step seems fully developed, we would need to review the entire action plan to see whether all community and system changes that should be sought are included. It is clear. We know who will do what by when. It seems current. We would need to know more about other current work (and new opportunities and barriers) to judge whether this portion of the action plan is up-to-date. 4.Review your completed action plan carefully to check for completeness. Make sure that each proposed changewill help accomplish your group's mission. Also, be sure that the action plantaken as a whole will help you complete your mission; that is, make sure youaren't leaving anything out.

5.Follow through.One hard part (figuring out what to do) is finished. Now take your plan and runwith it! Remember the 80-20 rule: successful efforts are 80% follow through onplanned actions and 20% planning for success.

6.Keep everyone informed about what's going on. Communicate to everyone involved howhis or her input was incorporated. No one likes to feel like her wit and wisdomhas been ignored.

7.Keep track of what (and how well) you've done. Always keep track of what the grouphas actually done. If the community change (a new program or policy) tooksignificant time or resources, it's also a good idea to evaluate what you havedone, either formally or informally.

Keepseveral questions in mind for both yourself and others:

Are we doing what we said we'd do? Are we doing it well? Is what we are doing advancing the mission? Youcan address these questions informally (ask yourself, chat with friends andother people), as well as formally, through surveys and other evaluationmethods.

8.Celebrate a job well done!Celebrate your accomplishments; you and those you work with deserve it. Celebrationhelps keep everyone excited and interested in the work they are doing.

Afteryou've written your action plan: Getting members to do what they said theywould

Everycommunity organization has undoubtedly had this happen: you plan and you assigntasks to get everything you've planned to do accomplished. Everyone agrees(maybe they even offer) to do certain tasks, and you all leave with a greatfeeling of accomplishment. The problem? At the next meeting, nothing has beendone. Besides tearing out your hair, what can you do?

Fortunately,there are several things you can try. It's particularly tricky in the case ofvolunteers, because you don't want to lean too hard on someone who is donatingtheir time and energy to begin with. Still, you can make it easier for membersto get things done (and harder to avoid work) without acting like the meanneighbor down the street. Some of these gentle reminders include:

Regular phone calls from staff members or dedicated volunteers asking others how they are doing with their tasks. This should be a supportive call, not a "are you doing what you're supposed to" call. The person calling can offer emotional support "how are you doing?" as well as see if the group member needs any other assistance. A friendly call such as this can be seen as helpful, give the member the sense that he is a very important part of the group, and serve as a great reminder to do what he said he would do. Distributing the action plan in writing to all members, with names attached to specific tasks. (Additionally, this can be a great time to ask for feedback before the plan becomes "official.") [See the example action plan below and the blank one at the end of this section]. Making sure timelines (with due dates) are complete, clear and current. At regular group meetings, such as committee meetings or board meetings, ask members to report on accomplishing the tasks they have set out to do. Consider making this a regular part of the meeting. Celebrate the accomplishment of tasks. It's important that getting something done actually means something, and is recognized by the group as a whole. Followup on the action plan regularly. You are asking members to be accountable, andto get things done on a regular basis. If they have agreed, you should helpthem fulfill their commitment as best you can

Posted by  Deepak  Soni mail ID [email protected]

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