In my view, companies must strive to make Good Corporate Citizenship a core corporate value in the organization. It must also evolve a community initiative strategy and have clear resource allocation for the same (e.g. one per cent of pre-tax profit).

If a company has a policy and is prepared to make this publicly known, then it should produce a written statement on that policy covering the history of the company and a description of its rationale for giving.

In the statement, the company should clearly state:

a) the sort of activity or type of individual or organization it would like to support;

b) the priority areas where it would concentrate its giving;

c) what the company would not support – the activities or types of projects that are excluded;

d) how to apply and how the company will assess the appeals it receives;

e) how applications will be processed and the time it will take to process;

f)  whom to contact.

Mission Statement

The company’s thrust should be on evolving a “social responsibility” policy with a clear sense of mission that includes well-defined objectives, a time-span and results that can be qualitatively and quantitatively measured.

Social responsibility does not mean simply chequebook philanthropy. It has to be purposeful and measurable. Take, for example, the case of IBM – the internationally-renowned computer company. The company, over the years, has donated millions worth of computer equipment to U.S. schools. Their total approach to social engagement is very innovative. It has a business dimension as well as a social dimension. The company’s focus is on computer education and clean environment via computer technology.

Besides giving substantial grants to university departments to enable them to get into the information age, IBM offers paid leave to computer professionals to enable them to use their competence for training computer enthusiasts. IBM also helps to solve environmental problems through application of computer technology and simulation.

Evaluation

Evaluation of a company’s social performance can serve two purposes. The performance can be evaluated in order to determine how effective it is in reaching its stated objectives. This concept of evaluation is aimed at measuring results of a company’s performance in terms of “outcome”.

Evaluation can also be used as a tool to provide information necessary to make appropriate changes and adjustment in the company’s programme as it proceeds. This concept is focussed on the way the company’s programme has been conducted (“process evaluation”.)

Various “tools of social science” can be used or developed to measure and evaluate “social performance”.

Today one of the main considerations for a company to adopt and practice CSR is the buildup of “social capital” with a view to generate long-term socio-economic benefits.

An effective and strategic CSR programme must have four key elements:

1) Policy (providing the mandate and defining the direction of the company’s CSR agenda)

2) Programmes (the policy is translated into a set of interventions in the form of projects, programmes and activities to address specific needs of the company and the community in which it operates)

3) Systems (the company must decide whether it would like direct involvement with the community or work through an accredited NGO and in either case, who would be in charge, who would oversee and who would report to whom. In other words setup management systems and proper procedures to sustain the programmes

4) Measurements and Reporting (measure the direct and indirect impact of CSR on the company’s business performance and report the same to all stakeholders).

Best wishes.

Noshir H. Dadrawala

centphil@vsnl.com