ICSI upbeat on India Inc’s commitment to CSR: Mamta Binani
Company Secretaries have always played a major role in the rise of the corporate sector in India and Mamta Binani, President of the Institute of Company Secretaries of India (ICSI) is quite upbeat about the Indian corporate sector’s increasing Corporate Social Responsibility (CSR) activities in today’s scenario which is witnessing Prime Minister Narendra Modi’s Government’s emphasis on compulsory two-per cent CSR spending. However, the country has a long way to go before total CSR becomes embedded successfully in the Indian economy, she feels.
Binani — who was in Mumbai to attend an international CSR gathering — told Millennium Post here that India’s corporate sector is focusing on implementation of CSR and (according to CRISIL data) in the Bombay Stock Exchange in 2015, 3,855 companies were mandated to take up CSR through the law.
“While about 1,300 companies reported their CSR spending, around 50 per cent could not meet the 2 per cent bar — which resulted in expenditure of just Rs 6,800 crore, less than the targeted Rs 12,000 crore, in fiscal 2015. Still, this is a very, very big achievement as, before the CSR was mandated, we never spoke about such big figures. But today’s figures itself tell you that the corporate world is doing quite a lot,” she said.
“However, according to CRISIL president Ramraj Pai, compliance seemed to be inversely proportional to the size of the company and bigger companies were spending a lesser percentage compared to smaller firms. Also, 82 per cent of the total spending was highly skewed towards just four sectors (education & skill development, healthcare, rural development and environment) while a large array of sectors notified by the Government were left out by the corporate sector,” Binani said while noting that the Ministry of Corporate Affairs’ vision of CSR funding in society having a ‘multiplier effect’ could happen only if such ‘skewedness’ is removed and made into a ‘perfect normal curve’ again.
Pointing out that ICSI has been a leader in promoting good corporate governance, she stressed the need to change the mindset of those sitting on Boards — of considering CSR as a separate practice to meet Government norms — towards imbibing it in their very organisational culture and recycling their Vision and Mission Statements. “While buoyancy is presently taking more time to seep in and companies are focusing on cost-cutting strategies, corporates need to understand that the era has gone where wealth/ profit maximisation was the business objective, and stakeholders today are observing the effects of their operations on society — making it imperative for merging Society’s and Business’ interests,” she added.
Describing CSR as “Complete Strategy Recycling,” she urged Boards to use CSR for building their corporate brands through initiating sustainable practices that were not only driven by philanthropy but also company business and financial interests in maintaining market share in the long run. “The Boards should ensure CSR initiatives are split up into specific projects, with each being allocated a definite budget,” she said while describing the Boards as B (Building), O (Outstanding India through), A (Association), R (Renaissance and) D (Development).
Rejecting the idea of CSR being based on Western values but admitting it as a coinage of Western management thinkers, she said that the practice of “Serving Society” is definitely rooted in the Indian Value System, with proof being found in Vedic literature and scriptures of all other religions. Famous names like Raja Bali in Satyuga and Danveer Karna in Dwapar Yuga highlighted the importance of philanthropy in ancient Indian thought, she said.
Referring to the popular quote “Give a man a fish and you feed him for a day; Teach him to fish and you feed him for a life time,” Binani said the question is about whether to give a fish or a fishing rod. “I think CSR is a combination of both. There are a few corporates looking at giving them a fish and others at giving them a fishing rod (teaching them vocational skills and the art of living). These aspects may add to the Indian economy as it goes into the GDP and the economy has a buoyancy because it creates demand etc.”
On how much CSR is being implemented and how much is needed in today’s environment, she said the focus should be on governmental aspects and how much is needed to be done by the executors. “I salute the Indian Government — which is the first globally to put CSR into the mandated form — as it takes courage for a country to come out with something like this. Section 145 in the Companies Act makes India the only country which has mandated CSR and companies don’t have any choice but to start thinking out of the box to do something with it. But it’s barely one and a half years since this CSR concept came alive and for it to grow or get internalised into the dna of any organisation needs a little time.”
On which areas of society need CSR the most, she said “About 82 per cent of firms — if you take the mentioned 3,855 above — are divided into only four sectors. But there are many sectors given in Schedule 7 which include health, sanitation, water and skill development. Schedule 7 gives you a wide area of subjects to work on. Somehow, as days go by, the money will get distributed into these sectors, but the present focus is on seeing that the money gets concentrated into these four sectors.”
On ICSI’s role in this regard, she said ICSI provides company secretaries on corporate boards as their conscience-keepers while also playing a vital role as compliance managers and business managers, besides being involved in any company’s decision-making and think tanks too. “ICSI has always been part of nation building with the Ministry of Corporate affairs in its own professional way while involving in CSR activities and creating an eco-system for the corporate sector to take up CSR not as a forced activity but as a helpful one. Company secretaries comprise a value system that is playing a magic role in bringing CSR to the forefront and fruition, and for India, this is a very big gift.”
Highlighting the global “Smart Villages Initiative” and women’s role in this regard, she urged women to play a greater role since women’s empowerment comes under Schedule 7. “Even the Government has mandated that if you spend on women’s empowerment, you will be entitled to come under Schedule 7. Therefore it really shows that it (Women’s Empowerment) is high on the Government’s agenda also. India is a responsible society and filled with heroes from all walks of life, including the film industry, which is not promoting tobacco and has become very conscious, while the media plays a major role in highlighting the good work of these people,” she concluded.