The role of the Board in shaping the next decade of CSR

This is the 10^th year of the corporate social responsibility (CSR) law in India. Over the years, the law has evolved and changed the landscape of CSR. But the journey has not been without hiccups. It has taken corporates and the Not-for-profit sectors a long time to redefine their purposes and collaboratively redesign the social development space.

Where are we in this space after a decade? And how does the Board look at CSR?

The Board has the following responsibilities when it comes to CSR:

• Form a CSR committee
• Approve the CSR policy
• Ensure implementation of CSR activities
• Ensure that the CSR spend is as per accordance of the mandate
• Disclose reasons for not spending

With the sector evolving, it is time the Board relooks at its role in driving the CSR mandate for corporates. For many organisations, CSR is a ‘license to operate’ tool and drives the company’s reputation. However, this means that CSR activities need to measured, monitored, and evaluated.

Board members/Independent board directors can play a crucial role in elevating the CSR activities of the organisation that they are associated with.

• Focus on purpose driven CSR

Independent board directors can act as torch bearers when it comes to ensuring that CSR is purpose driven and aligned with the overall business strategy of the company. The activities have to create long-term value for the company. At the same time, it is the duty of the Board to ensure that CSR activities do not provide any business benefit to the company. This delicate balance is critical to ensure compliance with the law and to avoid penalisation in the future.

• Put in place best practices of accountability

By emphasising on transparent and authentic reporting of CSR activities, board members can push for capturing of accurate disclosure of social and environmental impacts. This includes also disclosure of non utilisation of mandated funds.

• Assess proper risks and opportunities

With the experience and expertise that board members bring to the table, they can support the assessment of social and environmental risks and opportunities associated with the business. This materiality index can set the tone for future informed business decisions that align with CSR goals.

• Creating a collaborative environment

Working with stakeholders and shareholders is important. These include not just investors but also employees and customers. The board can encourage stakeholders’ engagement to get their perspectives about CSR and then build them into the CSR strategies. Often, corporates do the mistake of deciding what they want to do on the ground. A bottoms-up approach here is more meaningful wherein the community gets involved outlining what they need for their growth and development.

• Measuring the outcome and impact

Impact monitoring and evaluation is important for understanding the success of any CSR project. Board members can assist in the development of key performance indicators related to CSR. They can help establish the right metrics to measure the impact. This will help in mapping the progress of the project and also in deciding the next steps.

• Keep an eye on CSR governance

Board members have a crucial role to play when it comes to driving ethical CSR programs. The governance of projects is high-priority, and it is important that corporates have a strong compliance framework in place.

Today, CSR is not mere philanthropy. It is an integrated and holistic approach for sustainable development. It is aimed at creating self-reliant communities. This is possible only when Boards play an active role in integrating business strategy with overall CSR objectives.

The views and opinions published here belong to the author and do not necessarily reflect the views and opinions of the publisher.

Sarita Bahl

Sarita Bahl is an alumnus of Tata Institute of Social Sciences and the Swedish Institute of Management Program. An experienced and versatile leader, she comes with nearly four decades of professional experience. She has over the years successfully overseen the communications and public affairs function and led the corporate social responsibility strategy for Bayer South Asia, Pfizer, and Monsanto, among others. Sarita has held multiple roles across diverse industries, the public sector, trade associations, MNCs, and the not-for-profit sector. Her areas of interest include advocacy, stakeholder engagement, sustainability, and communications.

As an Associate Certified Coach (ACC) from the International Coaching Federation (ICF) and Senior Practitioner (Mentoring) from the European Council of Mentoring and Coaching (EMCC), Sarita specializes in career transition, inner engineering and life issues. Sarita enjoys writing and is passionate about animals, books, and movies.