It’s March and a big time hustle bustle in the procurement and finance business units of every other Indian company. And now, the new entrant to the list is, Corporate Social Responsibility (CSR). The new player has expanded horizons to manage the turf – reporting, record maintenance and reputation., Says Nirbhya Lumde
Written By Nirbhay Lumde
In the Indian context, Corporate Social Responsibility is a mandatory compliance to companies with certain qualified turnover or profits. Beyond the compliance, Corporate Social Responsibility would always be an instrument to increase company’s profitability, whether it is through improved reputation or business practice or company’s goodwill. It will continue to create value addition amongst stakeholders and benefit all three bottom lines: planet, people and profit.
It’s March and a big time hustle bustle in the procurement and finance business units of every other Indian company. And now, the new entrant to the list is, Corporate Social Responsibility (CSR). The new player has expanded horizons to manage the turf – reporting, record maintenance and reputation. The CSR leads of the current age have to act beyond meeting the compliance parameters but are also the reputation and credibility managers. They have the magic wand to create vibrancy, vitality and liveliness to the employees and a sense of giving and charity experience to the corporate. The theme of the article is to provide a cheat sheet, handy checklist, for the CSR leads to handle the financial year-end pressure with grace, keep calm and carry the good work forward.
In the context of a financial year, CSR professional’s job responsibility largely fits into three big buckets – reporting, record maintenance and reputation. The reporting is significant of all and permeates across other two critical components. The reporting includes timely updates to the internal and external stakeholders. The record maintenance is all about fund flow management and reconciliation of statement of expenses towards CSR projects. Relevant documentation with respect to mandatory norms and meeting the compliances would certainly upkeep the reputation and protects from unnecessary undue attention.
The reporting is significant to the existing of the CSR professional and critical in controlling and providing project updates. It would make huge difference to the board in providing right updates to the stakeholders. The lead should maintain and provide timely update the committee to the board and the larger executive board with project updates. Publication of human impact and case studies is always handy in conveying the softer aspects of the updates. It is critical to secure the minutes of the meetings to ensure that the relevant approvals in writing are recorded and are adhered to. Given the high and heavy volumes of monetary transactions, the CSR leads should keep all communication in writing. The CSR process is also subject to audit scrutiny.
All people want to be treated with respect, valued and made to feel they are making important contributions to the organization. The same is applicable to all value creators in the chain of meeting the CSR compliance. It would have been a herculean task for the CSR lead to build seamless network with internal and external stakeholders. It would be prudent to connect and correspondence with the project partners. It’s a best known practice to connect the project partners for a face to face interaction with the committee members at the end of the annual year. It would also help to bridge the NGO trust quotient among corporate. It is also critical to acknowledge their support in meeting the mandatory compliance.
The professional should thank internal stakeholders – CEO’s office for the right messaging with the internal stakeholders, with the finance for the 2% cap amount, accounts payable for timely release of the grants, procurement to keep tab on agreement timelines and material purchase, legal for required inputs on ‘what if’ clauses in the CSR project agreements, the Human Resource for the required support for employee volunteering, and the IT team for publishing CSR project updates on the external website of the company. These acknowledgements would be powerful tools to bring in required vigor and vitality in the processes for the years to come.
The other critical aspect in CSR profession is record maintenance. It’s not only about the releasing charity grants or donations but ensure proper record and bookkeeping maintained. A clean financial record keeping would certainly limit the pain of an internal or external audit. It would certainly help dodge CSR penalties or imposition of additional taxes. The right book keeping would save the time, avoid duplication efforts to correct the system or practices. The requirement is one time, clean efforts for adapting industry best known practices. It also means that the organization is also shielded against undue attention and upkeep the reputation health intact.
The other advantage with good reporting practice is to keep investors happy with critical updates. The CSR professional has to walk the extra mile to ensure hardcopies of the donations are dated, exact donation imprinted and acknowledged by the internal financial controller. It may sound trivial but the CSR professional should ensure that the receipt are received within given financial year and are appropriately certified under the Income Tax Act exemptions. The CSR lead is also expected to maintain the external website with relevant CSR project updates.
In the globalised world, more so in operating ethos of the company, sustainability and social responsibility have become main components of the reputation. A robust CSR program recognizes social responsibilities, supports good causes and provides positive emotional appeal. These are also manifestation of good ethical behavior. It would be appropriate to acknowledge that the CSR is also measured by amount of money and number of hours the company has invested in CSR activities. Therefore, quantitative parameters have to be built, tracked and reported on regular intervals.
In terms of reputation, credibility and trust plays critical role. It is matter of fact that the sustainability reports have become common amongst companies purely due to media and public attention. Therefore, the CSR program has to be credible enough to garner positive attention and reporting is critical and first step in managing the reputation. Along with quality reporting and high standards of bookkeeping, added quality project management, would certainly enhance the scope for positive reputation.
Though there are complexities to maneuver and internal stakeholder to manage but the CSR lead has a way out to keep calm and build a quick cheat based on the above listed parameters. These could be simple measurable observations that are relevant to the company practices. The CSR lead has to tick mark against each of the completed activity and keep an eye for unfinished tasks. These would go a long way in strengthening the CSR processes by enabling quality reporting, high standard bookkeeping and strengthen avenues for the corporate reputation.
(Nirbhay is associated with Corporate Social Responsibility)
Disclaimer: Views expressed are personal of the author.
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