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Home » Opinion Last Modièed: Mon, Oct 26 2015. 01 15 AMIST

Bhaskar Chatterjee

Bhaskar Chatterjee

Make a pact to work togetherAs more Indian èrms go global, they need to follow a very good ethos of corporate philanthropy, CSR and sustainability

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British PM David Cameron at the UN Sustainable Development Summit 2015 inSeptember. With the introduction of the Sustainable Development Goals, the UN hasindicated it is crucial to engage with the private sector. Photo: Reuters

Deèning business responsibility in a sentence or two is difècult. However, its features may be described thus: Business must be

responsible to a larger cross-section of stakeholders, which means that the idea that businesses exist for the satisfaction of

their shareholders alone must be enlarged.

In the expanded deènition of stakeholders, we èrst include the èrm’s employees. There must be an element of being upfront

with them, addressing their basic human needs and treating them in a fair, open and transparent manner. Second, we include

customers, people with whom a business interacts. The responsibility of the èrm to such partners should be transparent and

ethical.

The third constituency is shareholders. At the bottom of it all lies the concept of proèt, which we cannot eliminate. Proèt

maximization for shareholders is a very strong element, but in the pursuit of proèt, the greater good for the society cannot be

ignored. The management must try to convince shareholders that the company has a strong responsibility to give back to

society and therefore must utilize some of its proèts for the beneèt of marginalized sections of society. At the same time, a

company must respond to shareholders’ demands because many enlightened shareholders do ask a company what it is doing

to give back to society.

Then there is the wider world of civil society activists and the general populace at large. They would expect that companies

working with society should also have a conscious desire to be good corporate citizens.

The synergy between civil society and corporate India has to come about, otherwise all corporate social responsibility (CSR)

and sustainability efforts are doomed to fail. If we are to make CSR and sustainability a success, the collaboration between the

two is vital.

With the introduction of the Sustainable Development Goals (SDGs) in September, the United Nations (UN) has indicated that

it is crucial to engage with the private sector. SDGs now reéect the concern of the UN that governments alone won’t make up

the pie, and perhaps it is sending a strong signal to governments that they must involve the private sector in the development

process too.

That concern was something that we in India started to reéect upon around 2010-11; and in 2013, when the CSR mandate

came, we engaged directly with the private sector. India, therefore, precedes the UN in engaging by law and by rules with the

private sector on corporate responsibility. Among the emerging economies, we are number one, and what we do sets the

benchmark for many others.

Indian multinational corporations (MNCs) play a very important role in leading the way in good business practices.

Typically, MNCs are seen across the world as avaricious, proèt-seeking business entities. The outside world doesn’t trust the

MNCs, precisely because of this trust deècit.

Contrast that with the Indian MNCs. While they are a relatively new phenomenon, one of the good things about them is that

those that have become multinationals already have a very good ethos of corporate philanthropy, CSR and sustainability.

For example, Tata group companies are held in very high esteem. CSR, sustainability and responsibility picture that

companies like Tata present is a very good advertisement for the Indian brand.

As more Indian companies go global, they need to follow this ethos because it a picture of India as a nation that they carry

with them.

Bhaskar Chatterjee is the director general and chief executive of the Indian Institute of Corporate Affairs, a Delhi-based,

government-afèliated think tank for corporate regulation and reform.

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First Published: Mon, Oct 26 2015. 01 15 AMIST

TOPICS: CSR SUSTAINABILITY PHILANTHROPY CORPORATE SOCIAL RESPONSIBILITY INDIAN COMPANIES

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