#CSR the biggest and most dynamic corporate function of 21st Century

The school children meditate

Padmini's school childrenIt was on Friday 8th April, 2011 that students of a primary school Satya Surabhi, situated at a village at the outskirts of Kodaikanal meditated for 15 minutes as a solidarity to Anna Hazare who was fasting at New Delhi.

Padmini and her teachers

The teachers of the school led by Padmini are dedicated to run the school charging no fee to the children from the village, went on a fast for 12 hours on the day sipping just water whenever they felt thirsty.

This is a small village like many such villages around the country in India. Ordinary folks keen to run their life with meagre amount they earn, from small petty work they do but determined to see their children come up with good studies, good behaviour and good future. Padmini’s school provides that nourishing and disciplined atmosphere for growth. On their annual day celebrations on 24th March 2011 the parents came to witness the outstanding performance of sports, dances, yoga and was indeed a day to be of proud of, seeing their children excelling in arts, literature and science. It has grown over the last 5 years from a small one room school to a large area of class rooms that prepare 160 young children, who tirelessly and cheerfully go out everyday with their broomsticks to clean up the adjoining public road. as part of the civics curriculum. The village itself has transformed into a hamlet of clean environment with cleanliness as the watchword.

Bribing to get elected in – Democracy that is converted into a family business enterprise

Around the same time when the children were meditating upon for a better world, the villagers were bombarded with blaring music and speech announcing why only one candidate would be the most suitable person for the ensuing election on April 13, 2011 for the Tamil Nadu Legislature. Meagre sum the villagers manage to get, surely is not sufficient for them to survive and when they are offered some few currencies in exchange of their vote they hesitate but agree. The gullible villagers are bribed and then are administered oath on milk, their livelihood they promise upon not to vote to any other candidate, lest… The present government run by DMK is notorious to have brought this system of bribing, in the last bye-election at a place called Thirumangalam near Madurai successfully that they were emboldened to apply the same logic to all other places of Tamil Nadu. The money they could spend is indeed enormous for they spearheaded the movement of corruption leading to one of their party members, a senior cabinet member of the Government of Prime Minister Manmohan Singh now imprisoned at Tihar jail, is directly involved in the biggest graft in the world known as 2G scam. This time the Chief Election Commissioner of India Querishi had put a break to the distribution of money to the voters in a state-wide tough measures that had taken the ruling party by surprise & shock that the leader of the ruling party Karunanidhi was forced to say that it was a mini-emergency in Tamil Nadu declared by the Election Commissioner. The voters however keep their fingers crossed, for there’s an inherent fear about the Electronic Voting Machine [EVM], during its stay under lock & key before the results are announced on 13th May 2011, is most likely to be tampered with a remote control device favoring the ruling alliance of DMK & Congress.

Contradiction:

Thus Children like a pendulum swing between Mahatma Gandhi and Madoff, between the school and the home. This is a common feature the children share everywhere around the globe that results in the inevitable consequence of uncared men and women of more than a billion going hungry everyday. That is the truth. Truth involves always completely opposite values, then only it can be truth. Opposite value of eating is not hunger but fasting. When Anna Hazare decided to go on an indefinite fast it was his voluntary decision not to take anything but a sip of water that shakes the conscience of the government to relent his demands, as the consequence of his death could stir a revolution.

But what is the opposite value of hunger, it is not eating. Those men and women of more than a billion who go hungry everyday have no choice but to go hungry for they do not have access to anything to subside their hunger. The opposite value of hunger is not eating but morality, the index of conscience of the world they live in. That’s the truth.

You work for us; we don’t work for you‘ syndrome

In US, On Sept. 12, 2009, millions of citizens rallied across the country. They gathered in the nation’s capital and other cities to convey a clear message: You work for us; we don’t work for you. Stop the bailouts, the takeovers, the debt and dependence.[Washington Post: http://wapo.st/cZrVrV%5D

The week saw millions demonstrate in India, what B.Raman writing in [photo courtesy incl.] Rediff.com says, What one saw Anna Hazare breaking his fast unto death after the government accepted his demands relating to the enactment of legislation to set up an independent institutional mechanism to deal with corruption, was the end of the initial tactical phase of this confrontation, and the beginning of the strategic phase”.

What is the common thread between the two demonstrations on Sep. 12, 2009 and Apr. 10, 2011. Anger against the government. But who were the main cause of the problem – Corporate – the strategic phase of corruption.

Kathleen Parker writing in Washington Post on Inside Job of Charles Ferguson comments, “The most forgiving American will want to seize a pitchfork and march on Wall Street. Or Harvard Square. Or in front of the White House. There are so many despicable parties, it’s hard to pick a favorite. Is it time to reconsider the Axis of Evil?”

The same applies to India, why they have not demonstrated in Dalal Street, when scam after scam rocked the nation since 90′s when Harshad Mehta case brought to light the nexus between Corporate, Banks and financial institutions? Who are all the cause of this 2G scam? Corporate isn’t it? Is it time to reconsider the Axis of Evil?

Business Strategy should therefore make itself very clear. Are you capable of reining your flock into discipline? What is the Business Strategy for those children who meditated upon for a clean government when they grow up: to join you or join Madoff? Or is it the duty of the primary schools world over to teach ethics and when they reach the universities – the greed?

Business Strategy

We are on the second decade of 21st century having initiated with the big bang of year 2000 bug of programming problem, facing the year 2012 anno domini of end of the world super bug. Corporate strategy is in a saving mode of protection, their conscience tossed between a show of morality giving charities to some selected communities and at the same time bribing the political parties to ensure the sales taxes are not burdened on them as they are not allowed to advertise their products because those products are classified under health hazards.

The Bard had said, “be bold, be bold but not too bold, lest your heart’s blood shall run cold.” Will the tobacco companies be ready to survive at any cost or the pharmaceuticals companies be ready to release products knowing pretty well, they could be with dangerous side effects?

This is the truth that Corporate has to address right now for its business strategy of 21st Century.

Corporate Social Responsibility is an organism within Corporate, alive and active to listen, to change and to communicate, not dissimilar to Finance or Marketing professionals. The social responsibility is an index of morality that exists outside the corporate walls. The neglect of the society by and large is the result of the governance deficit of the state who collects the taxes but refuse to provide the basic welfare needs – education, health, water, food and housing. Corporate has no ethical responsibility whatsoever, for they have only fiscal responsibility, but the very purpose of existence of Corporate is towards social needs. Profits are fundamental to survival of the Corporate. Expecting charity for social needs from Corporate where the state has failed, is cutting into the very roots of a social organization and bringing them to the same level as the state, supporting the parasites whereby the fabric of society completely collapses together.

Corporate MoDem for Social Responsibility

CSR Management is similar to CRM but different in its context and approach. CRM addresses the issues of its customers and strives to improve upon their products or services to suit the wishes of the customer trying to retain its market share and expand. Whereas CSR is in touch with the society as a whole, listens to them, conveys to the management to satisfy the demands of the public and reports back to the society how and in what manner the management stands in discharging their duties as a Corporate citizen of the nation. CSR has an onerous responsibility like a MoDem modulating and demodulating between the two essential pillars of society – one representing the ethical responsibility, as people of the world and the other the fiscal responsibility of creating profits for the need of the society. A differentiation is what CSR has to make in the process, between Bill Gates as a philanthropist and as Chairman of Microsoft. Society would like him to expand Microsoft and grow but certainly would not like to depend on him for his charitable disposition. One enhances the world economy, the other depresses the initiative of the efforts of the society.

The main function of CSR is to convince the society that it abides by the 10 Principles of UNGC and is a corporate citizen with sustainability of values. Period.

CSR ~ Sustainability Leadership of Values ~ Sustainability of Profits

Take Inside Job as an example – compare it with all Chapter 11 cases – all of them have the uniform failure of values that lead to closure. It is the non-sustainability of values that lead to closure of business. Sustainability of values will therefore lead companies to sustainability of profits. How?

  • This blog of IBCMi repeatedly has been emphasizing the urgent need to establish IESB – International Ethical Standards Board in similar fashion to IASB – International Accounting Standards Board. This Board will be the primary support CSR function shall rest upon to bring about a revolutionary change in Corporate .
  • CSR function is that of an Angel’s advocate, pleading on behalf of the society and making effective changes within the organization not to follow the principles of Devil’s advocate leading to financial scandals like Enron or WorldCom.
  • CSR function is to effectively bring an optimum level of performance by 10 Principles of UNGC that effectively eliminate any short-term benefits but lead to long-term sustainable values for the company.
  • CSR function has the responsibility to convince the organization that top drawer UNGC companies are indeed an elite value based organizations that would effectively create sustainable profits be it in investments, M&A, Private Equity, better Market rating avoiding the need for any insider trading, projects management, dealing with the governments who have ratified UNCAC.
  • CSR function will have the vision of 21st Century where mergers would take place of companies of disparate industrial base but teamed together on sustainable values.
  • CSR will be the biggest functional set-up of the 21st century and it will be the most dynamic than any other corporate functions, for their reports emanate daily with Governance on real-time monitoring and the participation of society by Article 13 of UNCAC. This daily report will have the ability to provide the stakeholders, society heading the list,  the study of cost consequence.
  • The study of cost consequence will make the CSR function the driver creating a society sans national borders.

Jayaraman Rajah Iyer

i Inactivity Based Cost Management – Copyright © REGN. NO. L- 27490/2006 DATED December 1, 2006 Govt. of India, Copyrights Office, by the Author, Jayaraman Rajah Iyer

9 thoughts on “#CSR the biggest and most dynamic corporate function of 21st Century

  1. Pingback: #CSR the biggest and most dynamic corporate function of 21st Century « Jayaribcm’s Blog « Jay Parkhe's RADAR

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  3. Sir, it is a supreme and noble gesture of dedication to share what is yours to the underprivileged. Reverence to you.

    But, for argument sake Sir, how many of the blue eyed segment come into the foray of sponsorship of such institutions if not distribution of a percentage of wealth? None! When priorities gets predominated by the urge to outgrow and outsmart the nearest competitor, they forget everything else standing in their vicinity.

    Corporate houses can not clamor for the needed, sacrificing their motive which is success at all costs. From Bill Gates down to a reasonable businessman from a village in India, charity without returns is no charity at all and broadly speaking, there is no harm in that too ( I am not being a maoist or a socialist pretender). I hasten to add that Charity in the name of God is the most established institution anywhere in the world sparing no singular religion.

    Recognizing that the predominant factor is for the youth to be educated and provided with, how many institutions are matching this requirement, if not for a fat fee. To augment, Governments and political parties have infringed into available system for nothing more than their gains. Mammoth fee structuring, minority and sc/st considerations, salable management quota system so on and so forth has eaten up the basic benchmark for knowledge gaining i.e. education.

    There are only a handful of institutions like Satya Surabhi that have struggled to sustain itself amidst all the impediments. How long will they? External pressures will become abundant when the institution begins to succeed and expand.

    I would honestly like to wish for CSR to be apart from the usual, set an example, and sustain with the intention and integrity it expounds.

    Thank you.

    • First of all on Charity from the life of Andrew Carnegie: “Many persons of wealth have contributed to charity, but Carnegie was perhaps the first to state publicly that the rich have a moral obligation to give away their fortunes. In 1889 he wrote The Gospel of Wealth, in which he asserted that all personal wealth beyond that required to supply the needs of one’s family should be regarded as a trust fund to be administered for the benefit of the community. During his lifetime, Carnegie gave away over $350 million.” Indeed noble and indeed laudable in case of Bill Gates & Warren Buffett, as much as Padmini who has given everything that she had for the village school children.

      At the same time 2G scams have taken away completely what ought to have been invested in such schemes as what Padmini, Bill Gates are spending. Governments know that NGOs would continue to work and contribute and hence those in Government can continue to be bandits of public property. Government has to be squarely told that all such atrocities cannot happen.

      At the same time Corporate shenanigans are dealing with the same Rajas in Govt. and their contribution is not to the economy but to Swiss Banks. So one has to break that Axis of Evil. Good companies with CSR personnel, whom I must say are more in the nature of NGOs with Padminis attitude stay put within the Corporate walls with the first principle – the company will adhere to 10 Principles of UNGC and be a good Corporate Citizen. Secondly protect the company from Rajas so that the company continue to get profits. Thirdly create a union of elite UNGC companies that would force the government to adhere to Principle 10 of UNGC which is anti-corruption that is same as UNCAC. The future of the World Economy rests on these few companies and CSR Management will be the driver that would be the inference engine of the Society to bring about a change. Meaning Govt. will not have anyone to bid for 2G when it declares 2G being open for licensing. CII has to do a lot of work.

      So charity is a noble gesture on part of an individual but one has to carefully look at how some one else is misusing the good gesture. Corporate strength is in creating employment and earnings for the society. We have a number of such companies with golden rule, such as Rahul Bajaj declaring that ‘no one would have dared to come to me even with a proposal of paying Rs.15 crores to get a license, for they know my background.’ CSR Management is to create such Rahul Bajajs all over. It is possible with UNGC followed by Corporate and UNCAC by the Government. World over.

  4. But what is the opposite value of hunger, it is not eating. Those men and women of more than a billion who go hungry everyday have no choice but to go hungry for they do not have access to anything to subside their hunger. The opposite value of hunger is not eating but morality, the index of conscience of the world they live in. That’s the truth.
    Very well put Sir.
    An enlightening article, thank you very much Sir.

    • The message is simple. If we continue to squander the resources, this planet will be full of hungry men & women. A few corporate can make an effective change & these few will have to do it for the sake of mankind. Not charity but better use of the resources. That’s the truth.

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