The Hindu Business Line : Corporate duty

TO SHARE, or not to share, how much to share — that is the question. The talk of corporate social responsibility (CSR), in the sense of corporate sharing a part of their (good) fortune with the needy, is as old as hills. In fact, votaries of CSR have been propounding various percentages, to pin corporates down to a specified quantum.

Particularly the multinational corporations (MNCs), which are usually taken to be tight-fisted and profit-obsessed, have been the targets of attack. At the recent meeting of the World Economic Forum at Davos, one speaker made the case bluntly: "The annual revenue of the five largest corporations is more than double the GDP of the poorest 100 countries in the world. So it is very natural for people to ask, `Why are MNCs not doing more to assist those people in need?''' He appreciatively mentioned the example of Ikea which had pumped in sizeable funds for education of children in India's "carpet belt", besides making it a point to purchase its requirements of carpets from that region.

The UN Secretary-General, Mr Kofi Annan, in 1999 and again last year, mooted at the same forum the idea of forming a Global Compact of corporates to create a corpus for meeting the demands for assistance in certain priority sectors. To quote him: "In just a few short years, the prevailing atmosphere has shifted from belief in the near-inevitability of globalisation to deep uncertainty about the very survival of our global order. This is a challenge for the United Nations. But it obliges the business community, too, to ask how it can help put things right."

Inevitably, such persistent, high voltage pitching for CSR has had its backlash as well. For instance, some corporates are turning round and arguing that wealth creation through maximising profits itself is a kind of CSR, because that enables them to put greater amounts in the hands of shareholders who are part of society and thereby, indirectly, promotes societal well-being. They further argue that if the shareholders so wish, they can, being closer to the communities in which they live, go to the help of causes needing assistance, or contribute their mite to philanthropic organisations.

Corporates had better be gracious about CSR without advancing specious pleas of this kind.

B. S. Raghavan

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