Are Corporate Social Responsibility acts really the way corporates portray it? Not really! A. SANDEEP, EDITOR, B&E does a reality check...
Oh yes, even I didn’t understand these words when I read them the first time? That’s the problem with many CEOs. They don’t understand many such words that start with C.S.R, or at least feign incredibly well not to. The protagonist of my editorial is clearly ‘Corporate Social Responsibility’... It was during the late 1990s that this concept of CSR started attaining prevalence within communities, spawning sporadic regulators who kept cribbing about the lusty profits being earned by the so-called “selfish” corporations, and advocating a dire need for society to “reign in” these “money making monsters.” Sadly, CSR is just a clever term that has been used by many CEOs and governments to mask their own under-performance, and worse, to ludicrously waste shareholders’ wealth – for the truth is that CSR should never be undertaken by firms sincere about their commitment to society! In a comprehensively researched paper sponsored by Oracle in 2005, the statement by David Gerald, founder of Securities Investors’ Association (globally one of the top agencies set up in fact to protect corporate governance), dramatically revealed the frittering away of precious shareholders’ wealth by international corporations, “(Company) boards should be given no mandate to give to charities.
If they want to do that... then they should put it to a shareholder vote.” Year 2005 reports by Fortune (of more than a hundred Fortune 1000 companies) and Economist Intelligence Unit (of more than 200 companies’ executives and investors, including in India) killingly revealed the pathetic double speak by global CEOs. While Fortune showed how 91% of surveyed CEOs regurgitated the ostensible statement that “CSR management creates shareholder value,” the Economist report correctly proved how, in reality, only a laughable 2% of investors globally said they’ll invest in companies undertaking CSR. The report also showed how one of the top two reasons for CEOs to undertake ‘corporate responsibility’ was, hold your breath, corporate scandals. Hilariously, “society” as a factor for undertaking CSR did not even find a mention in this list. Oh yes, NGOs did find a thoroughly insignificant mention in the list of who all are considered a firm’s “most important stakeholder”; they were ranked second from bottom (with the coveted last rank going to ‘none of the above’).
Oh yes, even I didn’t understand these words when I read them the first time? That’s the problem with many CEOs. They don’t understand many such words that start with C.S.R, or at least feign incredibly well not to. The protagonist of my editorial is clearly ‘Corporate Social Responsibility’... It was during the late 1990s that this concept of CSR started attaining prevalence within communities, spawning sporadic regulators who kept cribbing about the lusty profits being earned by the so-called “selfish” corporations, and advocating a dire need for society to “reign in” these “money making monsters.” Sadly, CSR is just a clever term that has been used by many CEOs and governments to mask their own under-performance, and worse, to ludicrously waste shareholders’ wealth – for the truth is that CSR should never be undertaken by firms sincere about their commitment to society! In a comprehensively researched paper sponsored by Oracle in 2005, the statement by David Gerald, founder of Securities Investors’ Association (globally one of the top agencies set up in fact to protect corporate governance), dramatically revealed the frittering away of precious shareholders’ wealth by international corporations, “(Company) boards should be given no mandate to give to charities.
If they want to do that... then they should put it to a shareholder vote.” Year 2005 reports by Fortune (of more than a hundred Fortune 1000 companies) and Economist Intelligence Unit (of more than 200 companies’ executives and investors, including in India) killingly revealed the pathetic double speak by global CEOs. While Fortune showed how 91% of surveyed CEOs regurgitated the ostensible statement that “CSR management creates shareholder value,” the Economist report correctly proved how, in reality, only a laughable 2% of investors globally said they’ll invest in companies undertaking CSR. The report also showed how one of the top two reasons for CEOs to undertake ‘corporate responsibility’ was, hold your breath, corporate scandals. Hilariously, “society” as a factor for undertaking CSR did not even find a mention in this list. Oh yes, NGOs did find a thoroughly insignificant mention in the list of who all are considered a firm’s “most important stakeholder”; they were ranked second from bottom (with the coveted last rank going to ‘none of the above’).
Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).
and Arindam Chaudhuri (Renowned Management Guru and Economist).
For More IIPM Info, Visit below mentioned IIPM articles.
2012 : DNA National B-School Survey 2012
Ranked 1st in International Exposure (ahead of all the IIMs)
Ranked 6th Overall
Zee Business Best B-School Survey 2012
Prof. Arindam Chaudhuri’s Session at IMA Indore
IIPM IN FINANCIAL TIMES, UK. FEATURE OF THE WEEK
IIPM strong hold on Placement : 10000 Students Placed in last 5 year
IIPM’s Management Consulting Arm-Planman Consulting
Professor Arindam Chaudhuri – A Man For The Society….
IIPM: Indian Institute of Planning and Management
IIPM makes business education truly global
Management Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age Woman
IIPM B-School Facebook Page
IIPM Global Exposure
IIPM Best B School India
IIPM B-School Detail
IIPM Links
IIPM : The B-School with a Human Face
IIPM - FLP (Flexi Learning Program)
