Corp. Social Resp.

Corporate Social Responsibility (CSR) has tenet which defines organisation to be part of the market and economy from where it operates. Therefore, the organisation has a responsibility to pay back to them since it earned its entire revenue from there only. Profits and assets are the results or awards of its working in that system.

CSR mandates that the organisation must own this responsibility and work to discharge the same.

Over the years when organisations would start carrying CSR activities through its CSR department, then, CSR would not remain categorized under “Invisible Elements” and switch to “Departments / Functions” on our web-site.

Why CSR required?

    • World around us has many ills / imbalances like
        • Poverty (i.e. people don’t have enough money to even purchase basic facilities);
        • Illiteracy (i.e. people don’t have willingness to get educated and infrastructure to support education);
        • Poor medical facilities {i.e. people die because of non-availability of medical infrastructure (doctors & hospitals / nursing homes) & medicines, non-diagnosis of preventable diseases};
        • Old age issues (i.e. health care, security & infrastructure issues of senior citizens);
        • Women related (i.e. security, crimes, prostitution, etc. against women of the society);
        • Corruption (i.e. some people give / take unfair advantages misusing their powers);
        • The list goes on where some section of the society has fewer privileges / is discriminated against others.
    • The Governments are entrusted with taking care of above issues by collecting the share of revenue from people they earned → but, ever-growing population and corruption are major constraints → Govt. alone with its entire machinery can’t take care of entire population (say, “Can entire Indian Govt. bureaucracy alone take care of all needs of 1.20 billion or 120 crore people?” → impossible by all means) → requires to be supported by others;
    • Corporate with professional manpower have resources and competence to shoulder CSR work alongwith Govt.;
    • Other reasons:
        • The surroundings which feed organisation with manpower and resources, if supported by organisation by spending on communities’ development, earns respect and loyalty for the organisation → better brand image → better turnover;
        •  Internal satisfaction to the manpower working in the organisation when they engage in CSR activities;
        • Non-commercial initiatives of an organisation give better perspectives by the community → shows the character of leaders and organisations.

Mandatory nature of CSR

    • Social gestures are voluntary acts → but, nobody takes voluntary acts seriously and tries to avoid the same;
    • Companies Act, 2013 made CSR mandatory effective from 01.04.2014 but with no penal consequences except disclosure of non-spending in annual accounts, websites, etc.
        • Applicability (Sec. 135 of the Act)
            • Net worth => INR 500 crore; or
            • Turnover => INR 1000 crore; or
            • Net Profit => INR 5 crore.
        • If applicable, then spend
            • 2% of Net Profit.
        • Activities on which CSR amount to be spent
            • As per activities listed in Schedule VII of the Act (revised by notification dated 27.02.14).
        • Procedure of spending the money
            • Through formation of CSR Committee;
            • Spending through
                • self managed society / trust; or
                • program based funding and monitoring of other societies / trust in the field.
            • Procedure listed in Companies (CSR Policy) Rules, 2014 notified on 27.02.14

Approach of CSR initiatives

    • Resolution by the top management to carry out CSR activities irrespective of mandatory nature of CSR;
    • Including CSR in the mission statement of the organisation;
    • Create CSR budget (i.e. amount to be spent during the year);
    • Identification of focus area in which CSR would be carried out;
    • Creating CSR department with responsible person focussing to carry out such activities;
    • Creating CSR projects with mission statement, objectives, milestones, etc.;
    • Mandating to spend few hours by manpower of the organisation on CSR activities;
    • Reviewing the impact of CSR activities by accepting feedback from beneficiaries and other stakeholders including manpower;
    • Carry out suitable changes in approach based upon feedback.

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