Corporate social responsibility is dubious concept. Corporate social responsibility campaigns are exploitative of shareholders.

Corporations are treated like individuals (per the law).

Individuals have voting power and have to pay income tax. Do corporations have voting power? But they do have to pay income tax and excise, sales etc taxes.

We want the corporations to be responsible citizen. Then what about Corporate (social) rights ? Which democratic country has a constitution that gives no rights to its citizen but assigns only responsibilities?

Why only hold corporations responsible for social agenda ? How about Labor Union's social responsibility (and rights) ?

So long profit is the driving force, no person can be expected to further even minimal interests of their community. Infact, these huge corporations are cannibals, one trying to swallow another.It is utopian to demand CSR responsibility from them.

Since corporate uses other's money, there is always high probability of misuse of fund. Since corporate takes risk, they get many legal protections like limited liability. This compounds the problem. Gandhi tries to tackle this problem by introducing the concept of "trusteeship". Friedman is more practical as he argues that corporate's responsibility is to maximize profit which will lead to social good through more tax collection by government. Aiyar is right to argue that corporate philanthropy can increase scope for misuse of fund. It is better to go by Friedman. Along with it, a) companies should have no right to retain undistributed profit. All profits should be paid out and if sharegholders like to reinvest, they can do that individually. b) Loan records of every company should be in public domain. c)Expenses for the company directors should be regulated.

Totally agree with the point being made here. The CSR has to be in line with the main business of the organization. BP should take up agendas that are directly affected by their line of work. anything else is just PR gimmick. The idea is that an organization in its pursuit of profits takes a lot from the society and environment.. which should be returned back. Efforts should be made to reduce this environmental cost as well.

Mr Aiyar, you are spot-on that CSR should stand separate from a company's philanthropic deeds. Many established companies set up community projects and aid programmes with the dual intention of seemingly doing good while gaining PR mileage for themselves. Some go a step further when they highlight their CSR to divert attention from their unethical business practices, or any scandal that involves their company and/or management. CSR is best served when a management team shows character and integrity in its corporate practices and decisions, and stands responsible and accountable to shareholders and society for the consequences resulting from those decisions. In the meantime if they want to fund or initiate projects that benefit the community at large, or segments of the disenfranchised, great! Further, if they're willing to do all of this without expecting to be lauded in the news, then they've earned their place on CSR lists (not that the average citizen cares!).

Finally, all companies as only as good as the employees they have. Similarly, all govts. are only as good as the politicians who run it and the people who vote for them. If companies are run by corporate junkies and marauders you can expect it to do things only as socially responsible as these groups behave. As long as business is designed only for "growth" and "financial profits", CSR will remain an oxymoron.

Dear Mr. Shah
Dhirubhai Ambani was never a treacherous businessman. May be he corroborated with some bureacrates to change certain existing laws to favour his Industry, but ultimately in the interests of the the whole country and Indian Industry.

He gave the real direction to the Indian Industry. In fact he revolutionised the Indian Industry.

The Existing laws which he got changed were working against the Indian interests and only helping the bureacrates, to keep a total control.

Dhirubhai should be awarded with a 'BHARAT RATNA'.
Regards

CSR has been used as a marketing tool as is demonstrated by spending peanuts on green washing activities...CSR should mean better and safer working conitions for their own employees first rather than organizing PR oriented CSR events, most sustainable development executives in oil majors come from a marketing and sales business function, which speaks volumes in itself

True! I would go to the extent of saying that, the only role of a coporate is to maximise profits for the shareholders while maintaining quality of their products or services. I think it is Bill Gates who is contributing to the charity but not Microsoft. It is the individuals who may wish to give back to the society rather than corporates. Therefore, CSR is a misnomer and I fully agree with the views of Swamy.

I am miles away from the intelligence and caliber of Mr. S. A. Iyer. But let the two examples of BP and Goldman Sach not spoil what is being done in India. Any what I read from the newspaper alone, Sunil Bharti Mittal has opened more than 200 Schools in remote places of India for providing free education to absolutely poor children. So we read about the CSR efforts of Azim Premji, Sudha Murthy. And I am sure many more might be doing the similar activity in their own pockets. In Jamshedpur Tatas remained one organisation which cared for its employees and their families to the last. there was a story circulated on internet how Tatas took care of all who were affected by 26/11 Terror attack whereas his effort could have stopped at Taj itself. Let us not view the CSR from the spectacles of profit, business, taxes, responsibility, accountability alone. what is required today is to push hard the CSR in remote places, villages in India and result few year hence will show how important contributing factor had been the CSR.

We can't blame corporate bodies for failure of the Government in governance. It is a fact the corporate bodies treat CSR like spending on advertisement and also use the money budgeted for CSR for keeping government departments happy.
Mr Swaminathan has been a great fan of ITC's e-choupals, although ITC was emphasising that their objective is to make money through the initiatives. There is nothing wrong on using CSR for achieving corporate goals.
BP's and Bhopal disaster has nothing to do with CSR. It is basically control failure at the organisational level. It was not correct for Swaminathan ayyar to compare bhopal to number of deaths in Mumbai local train and make it look as if Bhopal was not a bigger tragedy. Can we demolish all the shanties around industrial establishments tomorrow itself??

CSR must be linked to CORPORATE BEHAVIOUR TOWARDS clients. Our telephone companies are looting the customers every minute, the loot extending to Rs 100,000 crores a years by FRAUDULENT MEANS & CLANDESTINE operations. The REGULATOR is in NEXUS. The entire country [ 67 crore subscribers]is object of EXTIRTION. There is no RESPONSIBILTY , no GOVERNANCE too. Will any one PROTECT the AAM ADMI & the country?

We do not understand why Mr Aiyar has chosen to write about this topic.
Big bussiness is always all about creating a ultra friendly image and trumpeting insignificant steps.
It is for the vigilance from Governmental bodies, NGO's and Media to bare the shortcomings. Frankly the article lacks conviction

Swamy....just because some americans cant have seafood from Louisiana, does not make it the biggest environmental disaster. Do you forget that Bhopal happened not more than a 1000km from where you live. Or is their discomfort more important that the plight of our own people?

Rajeev

fully agree with your view. there is no sense in a corpoation doing its core business in a rotten manner and then spending a small percentage of its profit on charity and claiming to be socially responsible.
It should actually be about doing all areas of business in an ethical and have full legal compliance.

To strive to make profit and pay taxes is the CSR. The taxes go to the government which is supposed to be there to take care of social responsibilities. Everyone doing his assigned duty well is a social responsibility after all. Any CSR is actually a marketing expenditure. Let it be called as such.

Well written article. CSR should be renamed as Core Self Responsibility.

CSR is not effective as it is not properly channelised for the society.The CSR concept needs to be reformulated by assigning corporates specific fields for development.A few fields like education and health can be identified for CSR funding.Corporates have to be assigned funding of such CSR activities,which is to be executed by the government agencies.It is the development that should matter.

Ashok Gupta, I agree with you.

Dhirubhai flourished and grew his companies despite exploitative laws that ruthlessly regulated industry and enterpreneurship. Those policies were based on Harold Lasky's ideas. The socialist do-gooders believe that corporate actions create only negative externalities and not positive externalities.

Dhirubhai certainly deserves 'BHARAT RATNA'.

CSR is just a kind of advice to the corporates to control exploitative greedy profit alone practices and put up a socially responsible face for assuaging people's anger. Otherwise, what CSR the cigarette and wine manufacturers can show towards the society, who is being fleeced and also whose health is being injured. Does their CSR end with depicting horrible picture on cigarette packs or wine bottles? Is it CSR? Who answers this question? Or take baby foods, drugs & medicines, edible products pushed into the market even though harmful. See the proteins being pushed by gyms! Law has to do do its duty of ensuring ethical & consumer friendly conduct of the corporates.

CSR is a mere marketing gimmick.Organizations these days talk of their CSR activities in their business presentations,brochures and even mass advertising.However,genuine CSR was displayed by the Birla and Tata Groups in the years prior to CSR acquiring the glamor in late 1990s thanks to the MNCs coming in to and doing business in INdia.THe present day CSR is dubious.If investigated most leaders on the CSR front will be found doing wrongful things to set aside those funds.EXceptions if any would be few and those would usually be quite silent in talking about their CSR activities.In reality CSR is now CSIR as Swami would say!

The article is beautifully depicting the symptoms of anomalies related to definition of CSR. Each company is using their own understanding to define CSR which may work to their advantage. But what we need to understand that why is CSR getting into such a situation. The root cause analysis of CSR not getting differentiated from philanthropy. Globally, companies report their social performance through their sustainable development report using globally accepted standards which gets externally assured from reputed Audit Firms. Still we come across situations as mentioned in the article. I believe same is the case with various government entities including Railways. We may get into statistics and defend the accidents and fatalities rate being on the decline. Still mishaps occur. Likewise safety of passengers is social responsibility of railways. At the end, the question still remains unanswered - Is it wrong to showcase philanthropic achievements by a company as CSR? Can govt come up with a policy or statutory guidelines for CSR? Each company runs its business after getting necessary statutory clearances which is periodically verified by the statutory agencies. Still mishaps occur. I sign out with a metaphor. "A public representative's compulsion forces a company to put a person on job/work for which he is practically not skilled. Not acceptable by company can lead to local unrest created by the same person. After being put on fast-track safety training and work, unfortunately the person meets with an accident on duty. The same public representative instead of accepting his/her own mistake forces the company to ensure safety of rest labour and compension for the person who met with an accident. Does anyone look into such aspects and have the courage to defend the right contribution which a company (public/private sector) gives to the society in terms of revenue, employment generation and CSR.It applies to Railways who do a lot, none can match growing expectations.

Friends,

When Individual Citizen Responsibility itself is missing in our country, why talk about CSR. How many of us can say from our heart that we are responsible citizens. CSR is just a gimmick by most of the Organizations. At the EOD their ultimate aim is to maximize their profit.

Dear Mr Aiyar, Your choice of companies to highlight this point is very interesting - perhaps very well timed! You may note that our own version of the sub-prime crisis - the forex derivative crisis of 2007-08 - has a similar tale as the sub-prime crisis. Bad advise from "advisors" (like Goldman Sachs etc) to corporates resulted in a loss of over Rs 32000 crores to Indian corporates (as per RBI). High time someone bell the cat! However, given your astute observation of Goldman Sachs, Citibank and similar organizations capturing successive governments in the US, one wonders when that may happen. Do you think it may be unreasonable for our government & the RBI to do an SEC and have the parties responsible for the huge loss to the Indian exchequer & Indian businesses? Warm regards,

CSR is another form of taking care of the community which was spoiled otherwise by corporations by their activities. The CSR practised in the country is shallow. The corporations are spoiling the environment and pay measely to the leaders of the community and these community leaders enjoy instead of the community as such. This needs to be modified to a large extent.