The Companies Act Amendment 2009 made mandatory, the involvement of every corporate in uplifting the society thus, increasing the already high levels of hype and importance to the words “Corporate Social Responsibility”.
What exactly is CSR?
Technically speaking, it is a channel which the government is creating for every company to pay back to the society. “Pay Back” can be done by spending some of the profits the company makes to those parts of the society that need the help. Few companies choose to do it independently and few go through NGOs or other charitable trusts. A very well devised scheme and beautifully nurtured idea, its aim is to try and ensure the poor don’t get poorer.
The steel plant in Vishakapatnam, Andhra Pradesh adopted a village, Reliance Industries did something akin, Hindustan Unilever limited had a health awareness campaign and the list goes on. Speaking from the moral or humanitarian perspective, it is THE kind of a step that a country like ours needs. People in need cannot wait for a policy to strike the legislature, cross the executive and finally be passed before the judiciary can lay its hands on it, and make it invisible for a couple more decades. The rich don’t have much to lose, but the gain at the other end is more than one can imagine. What is 50 lakhs to a company like HUL with a gross turnover 3000 crores per annum? In lay mans words, peanuts. It’s a win-win situation, you may call it.
Looking from the business point of view, well, this is just not business. Spending a part of your profit, for the benefit of an else is a violation of the very basic rules in this game of money. Calling CSR an initiative to increase the brand value of a product is just a farce.
Making something like this mandatory will only make it a burden which will nullify the desired effect this policy aims at. CSR is where one needs to pay more attention to the value you get and not the price you pay for it.
It has always been the case that one new step taken and the rest of the world follows, clones the idea and repeats it. CSR has become the new rage in the same way. Understanding what is right for CSR and what will sell as CSR is the thin line that does the quality assurance. When the whole world is looking in the same direction, it is your perspective that has to stand out.
Technicality aside, Responsibility is not an act that can be performed but it is a state of being. Being Responsible towards the society does not have to involve sharing your hard earned money or setting up a school or adopting a village. It can be something as small as giving a lift to an old lady in your cab, sharing your lunch when you are the cook, giving away a free umbrella from your store or teaching your maids child. It cannot be judged as wrong or right, just effective or not. You cannot state its pros and cons, profits or loss because at the end of the day, it is the good will behind the motive that matters.