Integrating CSR into business strategy of IT-BPM companies in Light of Section - 135

Updated: Feb 5, 2014 10:08:41 AM UTC

The Google+ Hangout conducted by NextGen and NASSCOM Foundation brought together several top notch executives, along with the Government to discuss the business strategies and the potential of CSR delivery in India by the IT-BPM sector. In light of section -135, the IT industry needs to spend an amount of more than INR 1000 Crore towards CSR. Therefore, there is an imminent need to deliberate on how this CSR capital can best be channelized to gain the maximum social and environmental return on investment.

The panelists included Dr. Bhaskar Chatterjee, Director General and CEO, IICA; Mr. R. Chandrasekhar, President, NASSCOM; Mr. Ravi Venkatesan, Founder and Chairman, Social Venture Partners and former Chairman, Microsoft India; Mr. Krishnakumar Natarajan, CEO and Managing Director, Mindtree Ltd; Mr. R Chandrasekaran, Executive Vice Chairman, Cognizant Technology Solutions India Pvt. and Mr. Mohit Thukral, Senior Vice President, Financial Services, Insurance and Health Care, Genpact. This session was moderated by Malvika Jain from CNBC TV18.

Dr. Chatterjee initiated the session with his introductory remarks about the landmark legislation, potential of the Section-135 and the integration of the Shared Value concept into CSR. Mr. Chandrasekhar spoke about CSR in the context of IT-BPM companies and how they have always been active in the space through various projects pertaining to digital literacy, employee volunteering etc.

A few key excerpts from the session are:

On Rules: Dr. Chatterjee said that the companies are required to spend 2% of their PBT on CSR but they have to provide appropriate reasons for their inability in case of non-compliance. However, every qualifying company has to constitute a CSR committee of three directors, two executive and one independent. The job of this CSR committee is to monitor the CSR agenda and provide it a strategic way forward.  The Section-135 mandates that the information along with the CSR activity details in the company’s annual report and also on the Ministry website.

On Collaboration:
Talking about collaborative efforts between IT companies, Mr. Chandrasekhar exemplified initiatives such as My Kartavya, started by the NASSCOM Foundation. He also stressed upon and agreed with several other panelists on topic that collaboration between corporates and NGOs is not only necessary but also inevitable.

On Strategy and Partnerships:
Mr. Venkatesan suggested that the organization has to pick and choose issues where they would just not provide money but also the know-how to take the project forward. It is also very important to choose issues which the senior management is passionate about. Mr. Krishnakumar said that corporates should reach out to the NGOs that work in their areas of intervention and make use of their knowledge and experience while also allowing the NGOs to scale up. While talking about the R&D efforts of Mindtree with helping the kids with Cerebral Palsy, he also pointed that it is important to leverage vast intellectual capital of IT-BPM sector to create technology that will simplify the social problems in India. Emphasizing this point, Mr. R Chandrasekaran spoke about how they have created an enabling channel and provided required financial assistance to interested employees to create phenomenally successful employee volunteering programmes of Cognizant.

On Creating Impact:
At the very outset, Mr. Venkatesan said that CSR must be approached by the companies not with a mindset of philanthropy but with one of a Venture Capitalist. He urged the other panelists to conform to impact philanthropy in their CSR efforts, a method which encourages them to approach an issue with discipline, choose diligent NGOs and forge long lasting and sustainable partnerships.  He also suggested that CSR has to be strategic and must fulfill three end goals: enhance organizational reputation, build leadership capacity and become a source of innovation. Mr. Mohit Thukral pointed out how Genpact does impact sourcing to deliver benefits to the underserved communities and how they keep their areas of interest narrow so as to create a larger impact.

The Q&A session that followed consisted of interesting questions addressed several issues spanning clarifications on the law, collaborations etc.

It was an interesting discussion full of insight and ideas. Watch it here:

- (By Sai Kaushik Parankusham)

The thoughts and opinions shared here are of the author.

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