Ranjan Mohapatra*
*Chairman, Vision Foundation for Development Management
Profit-making public sector undertakings are mandated to spend 0.5 to 5% of their net profit on corporate social responsibility (CSR). Loss-making PSUs are advised, by the department of public enterprises, to involve social sector processes in their business activities without spending additional funds. According to the CSR guidelines, the government has to evaluate the CSR performance of each PSU as per the terms of memorandum of understanding (MoU) it signed with government by giving a weightage of 5%. This provision for evaluation makes the CSR policy of PSUs a mandatory one with whatever teeth it has.
However, compliance of the CSR guidelines by PSUs seems to be slow and lacklustre. A case in point is the specification under section 3.4 that, “CPSEs should ‘generate awareness ‘among all levels of their staff about CSR activities and the integration of social processes with business processes. Those involved with the undertaking of CSR activities should be provided with adequate training and re-orientation”. However, few PSUs can claim to have created awareness at all levels of their staff, which is the starting point.
Similarly, the guidelines also recommend, base line survey, CSR impact assessment studies, formulating specific CSR plans, supporting implementation of CSR plans, independent external evaluation of CSR (concurrent & final), CSR documentation, CSR reporting etc. While the list of activities are to be undertaken, the first step, CSR awareness building and training activities, is taken up with a casual approach. The spirit of compliance is missing, and is done without any degree of commitment and involvement from the top management. In most PSUs, the CSR function is managed by the HR directors/heads, who are genuinely pressed for time. The function is generally delegated to a position down below, that lacks expertise and authority to lead a challenging function like CSR. Many of the HR heads or even CMDs, may not be CSR-oriented and may lack the vision to integrate business processes with social processes, the essence of the guidelines.
In a national workshop organised by the department, one senior PSU manager expressed what may be the thinking of a section of PSUs, when he asked: “Why should PSUs do the passed-on task of the government?” This smacks of ignorance of the global trend and national policy perspectives.
Again, rarely any PSU has made a genuine effort to integrate its business processes with social processes, by inviting external experts with expertise in implementing it. PSUs tame response indicates the CSR guidelines lack teeth to influence the PSUs to comply.
Possible reasons for the slow progress in CSR implementation may be the limited pressure exerted by the CSR guidelines and the absence of or limited CSR-orientation among the top management.
In order to expedite CSR implantation in PSUs, the following suggestions may be thought off.
Making CSR reporting mandatory in a standardised format for all PSUs and released in public domain, including the print media. This will create public pressure on the PSUs to perform on CSR.
Making CSR function to be headed by a director, board level position, who can be effective in generating a CSR culture envisaged by the guidelines. To begin with, a CSR expert may be appointed as an independent director.
The selection of board level positions may be made with an emphasis on the candidate’s CSR-orientation. The PESB has to redefine skill-set and competencies required for such positions
