SR Looks Set to Emerge as an Independent Stream with Measurable Output

Thursday, January 3rd, 2013 |

Currently, in most companies, CSR activities are a part of other management areas, mainly HR, marketing and corporate communication. Some companies undertake activities, including education, environment and housing, with the subtler objective of gaining business by establishing a relationship with communities.

MUMBAI / NEW DELHI: Barely a couple of weeks after the new Companies Bill made it mandatory for firms to spend 2% of their net profit on social welfare, corporate social responsibility (CSR), which has mostly been just a splash in other functional management areas, looks set to emerge as an independent stream with measurable output.

Some companies are already reviewing existing programmes to have a more independent professional league of people in CSR, a move that could lead to competitive salaries, job creation and need for more heavyweights at the top. “The amendment will help the social responsibility sector in India get more corporate attention. That may trigger greater investment of financial and human capital,” says Milind Sarwate, group CFO, Marico.
Even if the “initial ripple” is felt at the top, it will cascade to the creation of larger CSR teams in corporates, says Adil Malia, group president (HR), Essar Group. “Whilst strategic alignment of CSR with brand strategy will create jobs at the top of the pyramid, these programmes will have to finally be executed at the grassroots,” he adds.
Dabur  is reviewing its existing CSR programmes in the wake of the latest developments. It will hire more professionals if it feels the need to extend and enhance existing programmes, says A Sudhakar, executive director, HR.
This month, the Companies Bill made it mandatory for firms to spend 2% of their average net profits on CSR. Companies that are not able to meet the norms will have to give explanations or face action, including penalty.
Currently, in most companies, CSR activities are a part of other management areas, mainly HR, marketing and corporate communication. Some companies undertake activities, including education, environment and housing, with the subtler objective of gaining business by establishing a relationship with communities.
Others interpret CSR as simply abiding by the law of the land, like paying taxes on time. While for some more, CSR is deeply integrated with their businesses and helps social causes.
However, companies that already have a significant contribution to social development say the Bill per se will not affect their strategies too much. Several large conglomerates like Tata Group, Aditya Birla Group, Essar Group, Marico among others, are involved in a wide range of such activities in a systematic manner. “For those who are already doing a lot of work in the area, it might just increase some paperwork. Companies who are relatively new in the journey will have to decide how to work on it,” says Santrupt Misra, carbon black business CEO and group HR director, Aditya Birla Group. The Bill could also give a structure to what many companies, particularly those in the infrastructure sector, have been doing.
“It will raise the bar for companies that have been spending less than 2%, but will have no bearing on those traditionally spending much more through structured CSR activities,” says Malia. “People were not taking CSR too seriously, but with this development, I see companies moving from a responsive to strategic CSR,” adds Prakash Tewari, VP, CSR and education, Jindal Steel and Power. However, the government needs to have a control mechanism to check if there is a return on spends, suggests Gourab Barik, assistant general manager — corporate HR at Emami.
According to placement firm Executive Access, the development could lead to about 30% increase in CSR-linked jobs. While search firm Randstad has a more modest estimate of 10% to 15% increase in CSR jobs. “The Bill will add not only numbers, but greater capability and depth to CSR roles. It will increase financial payout and positioning of the role in organisations,” says Ronesh Puri, managing director, Executive Access.
Currently, average compensation for most CSR roles at various levels is low compared with similar levels in other functions.