Profit-making public sector undertakings (PSUs) are mandated to spend 0.5 to 5 % of their net profit on Corporate Social Responsibility. Loss-making units are advised—by the CSR Guideline of the department of public enterprises (DPE)—to involve social sector processes in their business processes without spending additional funds.
The government would evaluate the CSR performance of a PSU according to the terms of the bilateral MOU, with a weightage of 5%. The performance evaluation has a bearing on the CMD’s compensation. This provision of evaluation makes the CSR policy a mandatory one, for whatever teeth it has.
But the PSUs’ spirit for compliance of the CSR Guideline is weak. While the guideline specifies 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. And those involved with the undertaking of CSR activities should be provided with adequate training and re-orientation?, most PSUs have not made efforts to create awareness at all levels of their staff, which is the starting point. The usual practice is to put the guideline on the website and assume that the employees have developed awareness.
The guideline also recommends 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.
First on the list of action is CSR awareness building and training. But the approach to this is rather casual. The desired degree of commitment and involvement from the top management is mostly missing. It is still considered as a supplementary activity, not a core. The business benefits of CSR are not yet appreciated at the top.
In most PSUs, the CSR function is managed by an HR director/head, who generally holds a board-level position and does not feel too keen to focus on this function, being pressed for time. The function is generally delegated to a position down, who has neither expertise nor authority to lead a challenging function like CSR. Thus, CSR ends up as a silo function, not integrated with the entire business process. Thus, the guideline is not being followed in spirit.
Many HR heads or even the CMDs may not be CSR-oriented and may lack the vision to integrate business processes with social process, the essence of the guideline. In a national workshop in Puri last year, one senior PSU manager complained, ?Why shall the PSUs do social development work, which is the job of the government??
This showed a lack of understanding of the global trend and national policy perspectives, issues which PSU senior managers are expected to know. This also reflects the mindset of a section of the PSU fraternity. But this needs to change, and is possible only through more deliberations and experience sharing.
Again, rarely any PSU has made a genuine effort to integrate business processes with social processes, either through internal expertise or through external experts. As a result, the CSR function gets a back seat.
All this indicate that the CSR Guideline has not got enough teeth to influence the PSUs to comply, or the PSUs are waiting to see what penal action would follow for non-compliance. Therefore, to expedite CSR implantation in PSUs, the following steps may be taken:
Make CSR reporting mandatory in a standardised format for all PSUs and bring it to the public domain, including by publishing in the print media. This would create public pressure on the PSUs to perform on CSR;
Bring the CSR function under a director. To begin with, may a CSR expert be appointed as an independent director to provide the necessary impetus to implement the CSR Guideline. Selections for board level positions should emphasise on the candidate’s CSR orientation. For that the Public Enterprises Selection Board has to redefine the skill-set and competencies required for such positions.
The writer is a management and CSR consultant
