This refers to “CSR panel wants non-compliance a civil offence” (August 14). The purpose behind the introduction of corporate social responsibility (CSR) is to blend corporate functioning with social development. If corporations compel themselves to adhere to section 135 of the Companies Act to fulfill a compulsory legal requirement to avoid punitive measures arising out of non-compliance, they will only squander their finances. They might not consider the wider social implications of the expenditure. The in-built fear creates psychological hurdles in carrying forward social development measures leading to unplanned development activity.
The emphasis under CSR is as much on social development as on allocation of funds. When the fear of penalty is not there, corporates will be able to play a more active and planned role to fulfill their moral obligation of social development. Their sense of responsibility to ensure proper use of their financial contribution towards social development coupled with third party assessment of performance will reinforce the objective behind CSR — of ensuring progressive social development.
Innovative suggestions for the execution of socially beneficial projects will ensure policy level implementation of CSR. Investment in social benefit bonds in addition to obtaining support from specialist institutions identifying areas for social development will ensure efficiency in the enforcement of CSR. Replacing criminal responsibility with civil ones will ensure there is greater willingness from corporates to achieve a social objective.
C Gopinath Nair, Kochi
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Source: Business Standard