The Business of Responsibility

NEWSFLO
August 17, 2012

FLO presented an Interactive Session on 'Corporate Social Responsibility' with Padma Bhushan Smt Rajashree Birla at the Hyatt Regency on August 17th, 2012. Ms Meena Muthiah, Ms Indira Dutt, Past President and Past National President, and Ms Usha Krishna, Past President and Past National President, were among the distinguished invitees and members.

Economist Milton Freidman once wrote that, "There is only one social responsibility of businesses – to increase its profits”. A business can no longer afford to be defined in such a restricted fashion. In her welcome address, Chairperson Srikanta Jhaver said that 'CSR', a term that first came to be used in the early seventies, has become increasingly important in the context of corporate governance in recent years.

A strong CSR philosophy influences a company's policies and acts as a self-regulating mechanism to ensure that the company acts in a manner that guarantees compliance not only with the law but also with the highest ethical standards so that it can act as an overall force for good in society.

Chief Guest Smt Rajashree Birla belongs to a family that actively embraced the idea of Corporate Social Responsibility long before the term became popular.

Passionate about the Birla legacy of social upliftment, Smt Rajashree's efforts are a shining example in the area of Community Initiatives and Rural Development. A role model, Smt Rajashree Birla, Chairperson of the Aditya Birla Centre for Community Initiatives and Rural Development, the Group’s apex body responsible for development projects, spearheads one of the largest CSR initiatives in India, the most significant of them being — ‘The Empowerment of Women’ – a subject of particular interest for FLO.

The wise seers of Bharat pronounced this 'Vasudhaiva Kutumbakam' — a 5,000 year old Vedic statement teaching us that the infinite consciousness is one – it manifests into many. That “Service to mankind is service to God” and “The world is one family”. In the famous words of John Dunne, "No man is an island, Entire of itself; each is a piece of the continent, A part of the main". This applies as much to a corporate entity as it does to an individual, for the fate of a business world is inextricably linked with that of the environment in which it exists. This truth is acknowledged in the need for Corporate Social Responsibility in business.

The Karmayogini: Smt Rajashree Birla

Ms Jhaver described Smt Rajashree Birla as a 'Karmayogini', nobility personified, with “the heart of an aristocrat and the hands of the commoner” — a combination that has transformed her into an icon for women the world over. The unity that she finds in dichotomy is the beauty that lies beneath Smt Rajashree Birla's philosophy.

Smt Rajashree Birla is an exemplar in the area of community initiatives and rural development. She oversees the Group's social and welfare-driven work across 40 companies. The footprint of the Centre's work straddles over 3,000 villages, reaching out to seven million people. The Aditya Birla Group runs 18 hospitals and 42 schools. Of the 42,000 children studying at the Aditya Birla Schools, 18,000 students receive free education. Thousands of under-served people receive free treatment at their hospitals.

Smt Rajashree Birla is the Chairperson of the FICCI-Aditya Birla CSR Centre for Excellence, Habitat for Humanity (India) and is on the Board of the Asia Pacific Committee as well as Habitat's Global Committee.

She is the Chairperson of the first ever Expert Committee on CSR constituted by FICCI. She is a Member on the Advisory Board of The Research Society for the Care, Treatment and Training of Children in Need of Special Care, Mumbai, and of BAIF Development Research Foundation, Pune. Smt Rajashree Birla is on the Executive Committee of the Gandhi Smriti and Darshan Samiti. As a patron of arts and culture, she heads the Sangit Kala Kendra, a centre for performing arts, as its President.

For making a qualitative difference to the lives of the under-privileged, several accolades have been conferred on Smt Rajashree Birla. In recognition of her exemplary work, the Government of India bestowed the Padma Bhushan on Smt Rajashree Birla in the area of social work.

The All India Management Association, India's well-reputed apex body of professional management, conferred the AIMA Managing India Award —Corporate Citizen of the Year Award on her.

Earlier, she received The Economic Times Corporate Citizen 2001-2002 Award on behalf of the Group. The Rotarians in Action presented her with the Seva Shiromani Award, and the Archana Trust honoured her as The Woman Achiever in 2001. The Suryadatta National Award for Lifetime Achievement in CSR was bestowed upon Smt Rajashree Birla as well.

The Rotary Club of Bombay conferred The Citizen of Bombay Award 2003. The Pride of India Award was bestowed on her by the Rotary Clubs of Mulund in 2004.

In 2007, she received the Reader's Digest Pegasus Gold Award and in 2008, the much valued India Today's —Reader's Digest Pegasus Star Award for work that truly exemplifies the highest values of society.

The Rajiv Gandhi Award for Eminence in Social Field, 2009 was conferred on Smt Rajashree Birla at the hands of Mr Jyotiraditya Scindia (Union Minister of State, Commerce &Industry). The award recognises her path-breaking work among the poor, especially in India's villages. The coveted Global Golden Peacock Award for CSR was bestowed upon her by Dr Ola Ullsten, the former Prime Minister of Sweden in Portugal on 24th September, 2010.

Earlier, Mrs Pratibha Patil, the President of India, bestowed the much coveted Polio Eradication Champion Award on her at the Rashtrapati Bhavan, New Delhi. She is also the recipient of the much-coveted FICCI-FLO Golden Laurel Award for her iconic stature and achievements in the area of CSR.

In acknowledgement of the family's continuing commitment to polio eradication and raising literacy levels in India, the portraits of Sri Aditya Birla and Smt Rajashree Birla have been placed in the Rotary International Hall of Fame in Houston, USA.

Smt Rajashree Birla is a Director on the Board of all the major Aditya Birla Group of Companies: Grasim, Hindalco, Aditya Birla Nuvo, UltraTech Cement Ltd, and Idea Cellular. Additionally, Smt Birla serves as a Director on the Board of the Aditya Birla Group's International Companies, spanning Thailand, Indonesia, Philippines, and Egypt.

She also supervises the Aditya Birla Scholarships by supporting academic achievements at premier institutions like BITS (Pilani), the IITs and IIMs.

Born in Bikaner and raised in Madurai, Smt Birla studied Arts, graduating from the Loreto College at Kolkata. She lives in Mumbai, with her family, comprising of her son, Kumar Mangalam Birla, his wife Neerja and grandchildren Ananyashree, Aryaman and Advaitesha. Her daughter, Vasavadatta, is married to Kushagra Nayan Bajaj, and they have a daughter, Anandmayi and two sons — Yugadikrit and Vishwarupe.

The morning began with a short welcome by Ms Shalini Biswajit. After an invocation by Ms Lakshmi Sriram, Chairperson Srikanta Jhaver welcomed the gathering. The dignitaries on the dais lit the 'kuttu vilaku'. Ms Usha Krishna introduced Smt Rajashree Birla, the special guest for the day. Ms Indra Dutt presented her with flowers and Ms Meena Muthiah presented her with a 'ponnadai'.

At the session, Smt Rajashree Birla said, "I subscribe to the philosophy that giving is living — at the corporate level and at the personal level." She also emphasised the need and importance of corporate social responsibility in the corporate world today.

With businesses focusing on generating profits, sustainability was not a popular concern among companies up until recently. Now, in an era of globalisation, multinational corporations (those that conduct business in more than one country) and local businesses are no longer able to indulge in destructive and unethical practices, such as polluting the environment, without attracting negative feedback from the general populace. With increased media attention, pressure from non-governmental organisations, and rapid global information sharing, there is a surging demand from civil society, consumers, governments, and others for corporations to carry out sustainable business practices.

Companies are beginning to realise the importance of being ethical while running their daily operations, in order to attract and retain employees and customers. Corporate response to this demand has manifested in the adoption of 'a new consciousness', known as Corporate Social Responsibility (CSR), since the 1970s.

What is CSR?
CSR represents "the integrity with which a company governs itself, fulfills its mission, lives by its values, engages with its stakeholders, measures its impact and reports on its activities".

Although most people appreciate the recent advancement of CSR, some argue that corporates are still not doing enough or are only acting in self-interest. These people say that multinational corporations are acting ethically in areas that are highly regulated, but at the same time, they act in the opposite manner in other parts of the world (such as using cheap or child labour). In addition, while corporations must have good CSR policies in order to maintain their reputation, they are also expected to maximise profits for stakeholders such as shareholders, employees, and customers.

Therefore, people argue that businesses do not put in a sufficient amount of resources to achieve what they promised in their CSR policies. Companies are now expected to perform well in non-financial areas such as human rights, business ethics, environmental policies, corporate contributions, community development, corporate governance, and workplace issues. Some examples of CSR are safe working conditions for employees, environmental stewardship, and contributions to community groups and charities. The problem is that many companies that profess to be socially responsible often do not live up to such claims. Because CSR is becoming more commonplace among corporations, there are concerns that some companies promote an image of CSR irrespective of whether they have a true strategy in place, and the results to show for it. Accountability and transparency are key to conducting business in a responsible manner.

Smt Rajashree Birla enlightened the members about how the practice of CSR helps not only the beneficiaries but also the corporate houses, the economy and the country because of the positive fallout of welfare measures of developmental activities. She highlighted the various programmes being run by the Aditya Birla Group and also spoke of those in the pipeline. She mentioned that the Centre plans to devote funds to start a vocational training programme in Kerala and a cancer centre in Pune. The Centre is already running 22 vocational training units across the country.

Speaking at the session, Smt Rajashree Birla said that organisations must embed CSR into their mainstream activities. Companies must also encourage employee volunteerism. CSR, she said, stimulates business development. Customers prefer companies with a social conscience. Shareholders and investors also gravitate towards organisations with social responsibility.

Ms Vanashree Syal proposed a vote of thanks, while the sumptuous lunch hosted by past Chairperson, Ms Indira Dutt, was a fitting finale to the day's proceedings.