Ethics and governance in CSR

In my last post here, I spoke of how to draw up a strategic CSR plan keeping in mind the organisations business needs as well as the government priorities. Once that exercise is completed, we move on to the stage of selecting our implementing partners (NGOs) and get into the project execution mode.

This is a very critical phase in any overall CSR programme. Ethics and governance come into play, not just for the organisation but also for the implementing agencies.

The process of approval for overall CSR strategy and programmes in organisations may well be long drawn and tedious given that it needs an overview from legal and compliance as well. Companies may also have in place a third-party due diligence system that vetoes any new implementing partner joining the programme. This helps weed out any problems that can arise due to corruption, bribes, or conflict of interest, among others.

Similarly, implementing partners may scrutinise the funding partner to ensure that the need is genuine, the funds will indeed flow through and that the programme will be based on fair principles of need assessment and transparency.

This puts the onus of ethics and governance on both the parties. It is therefore the responsibility of both the parties to collaborate and coordinate to ensure the due diligence processes are well followed.

CSR ethics and governance issues for an organisation

Strong and impact focused CSR programmes can provide a powerful narrative in the overall reputation and advocacy messaging of the organisation. By default, it also opens the door for massive scrutiny by activists, shareholders, media and others. It therefore follows that every step of the process has to be transparent and open.

Selection of the right partner is absolutely critical to the success of the project. A request for proposal (RFP) put up on some CSR portals ensures that multiple partners have the opportunity to apply. This works well especially if the geography of the project is wide and covers many States across India. Selection of the right partner through the RFP channel also helps clear any audit challenges down the line. Many MNCs coordinate with their respective procurement departments to bring on board the most versatile and cost-effective implementing partner. Cross functional coordination within the company also fosters transparency across the chain, a key element in overall governance. Once selected and onboarded, the CSR team has to ensure that project outcomes and impact, KPIs and other elements of monitoring and evaluation are all in place right from the beginning. And of course, the schedule for disbursement of funds throughout the project needs to be clearly articulated and followed.

Tip: Documentation aids in building a solid governance framework

CSR ethics and governance issues for implementing partners/NGOs

Organisations are bound by the legal framework of CSR in India and many of them work with implementing partners who have equally strong ethical framework. The problem is that we are still a way off wherein each and every implementing partner pays attention to documentation, has digitised records and/or robust systems in place.

Until such a time, NGOs can work towards that direction. The NGOs have an on-the-ground perspective of issues and challenges. Through a strong sense of ethics and governance that involves deep collaboration with industry partners and record keeping, the NGOs can be the real foot soldiers on the ground.

Onboarding and hand holding of selected NGOs can be a great way to build alignment with the organisation’s vision for CSR. Remember, many NGOs have their hearts in the right place and carry the intent to do good work. But those can all go awry if there is a mis match on the expected governance framework by the organisation. Periodic checks and review meetings can assist in finding quick resolutions to challenging situations.

Tip: Digitisation of records aids in follow up and measuring impact

Digitisation of processes by NGOs also aid in following the funds trails and gauging its utilisation on the ground. This is a very important aspect of project management and the more open the NGO is on this, the better it is for all stakeholders. Money earmarked for specific projects should reach the beneficiaries and there can be no short cuts on this.

In conclusion, it is not just the organisation who needs to pay heed to ethical issues in CSR projects. Equal responsibility lies with the implementing partners to ensure that together, the whole project is impactful, transparent and done the right way.

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.