Business of business isn't 'just' to do business

Business of business isn’t ‘just’ to do business


By Gajanan Khergamker

Bound by law to be ‘socially responsible’, following the new Companies Act 2013 that makes CSR mandatory, there’s a huge sense of dissent
among Corporates and expectedly so. As the Corporate world mostly views the Business of Business being to do Business, social responsibility is perceived as being ‘primarily’ the job of the State.
In keeping with Indo-American Chamber of Commerce’s (IACC) agenda, a day-long Conference titled ‘Corporate Social Responsibility: The New
Business Imperative’ was held earlier last week at the Taj Mahal Palace and Towers in Mumbai.
The themes that the conference highlighted included ‘Decoding the new CSR Imperative,’ ‘The CSR Mandate: A step in the right direction for
corporate governance’, ‘CSR Challenges and Opportunities for Ensuring Inclusive Growth in India’ and others.
The highlight of the conference was undoubtedly Director General and CEO, Indian Institute of Corporate Affairs, Dr Bhaskar Chatterjee’s
speech wherein the management practitioner spoke at length on how, as Secretary to the Government of India, he prepared and wrote the first
comprehensive guidelines on CSR for the public sector. The theorist was best equipped to explain the nuances of Section 135 of the new
Companies Act 2013 and the corresponding effect of the CSR Rules.
In what seems like an attempt to soften the blow of the new law, there is a provision under Section 135 (v) that reads: Provided further that
if the company fails to spend such amount, the Board shall, in its report made under clause (o) of sub-section (3) of section 134,
specify the reasons for not spending the amount. Dr Bhaskar drew the attention of participants, mostly corporates, that an entity which may
be unable to spend all of the two per cent of the average net profit as calculated will only need to ‘specify the reasons for not spending
the amount.’ And, in that, the law wasn’t as strict as perceived.
But, the inclusion of Section 135 and the Rules are a decisive attempt to sensitise, and mandatorily, corporates making profit to part with a
portion for social good. That spending on one’s employees does not qualify as CSR does put the brakes on Corporates which have been
pooling in their resources towards staff and their relatives.
So, health-related activities or skill-enhancing programmes catering to employees and / or their relatives will not qualify as CSR
according to the new law: Which means, Corporates extending these benefits to their workers will not be able to pass it off as CSR, and
concurrently fail to get tax relief. It’s only a matter of time before such Corporates begin to ‘cut down on costs’ and ultimately put an end
to such activities to the chagrin of their employees.
A lot of Corporates tend to draw mileage out of worker-benefit endeavours to draw in manpower and elicit a favourable response from
job seekers. With such activities failing to make the CSR mark, Corporates will be left with little option but to pull back the
employee benefits. Now, that translates into withdrawing health, social and travel benefits to employees are expected to be left
On the face of it, Corporates have mostly been disgruntled with the new scheme of things. “It’s almost like a communist taxation pattern,”
quipped a Director attending the IACC Conference. “Why should Corporates be forced to do something that the State ought to? It isn’t
our job. We anyway do our bit for society, all the time. Why do we need a law for this,” he said, capturing the mood of Corporates across
the nation.
But then, if it’s left to the discretion of Corporates, nothing will be done for social good. After all, the Corporate world does feel that
the Business of Business is to do Business.
(Gajanan Khergamker is an independent editor and legal counsel with over three decades of experience.) – Eurasia Review
Pro-Russian gunmen show seized monitors
Pro-Russian gunmen in eastern Ukraine have shown seized European military observers to the media, amid attempts to secure their
immediate release.
One of the observers presented in the city of Sloviansk said that none of the group had been harmed.
A team from the Organisation for Security and Co-operation in Europe (OSCE) is hoping to begin negotiations.
The gunmen continue to occupy official buildings in a dozen eastern cities, defying the government in Kiev.
In a separate development on Sunday, pro-Russian gunmen said they had captured three Ukrainian security services members overnight in
eastern Ukraine. Kiev later confirmed a number of its officers had been seized.
This comes as the US and EU are preparing new sanctions against Russia, accusing it of destabilising Ukraine.
US President Barack Obama said the Kremlin had “not lifted a finger” to implement last week’s deal in Geneva aimed at easing the crisis.
EU diplomats are expected to meet on Monday to discuss fresh sanctions against Russia.
The Kremlin denies supporting the militia in eastern Ukraine.
The observers from Germany, Denmark, Poland, Sweden and the Czech Republic were presented to reporters in Sloviansk on Sunday.
The monitors – who were captured in the flashpoint town on Friday – were led into the building by masked gunmen.
“All the European officers are in good health and no-one is sick,” said German monitor Col Axel Schneider.
“We have no indication when we will be sent home to our countries.”
He added: “We’re not fighters, we’re diplomats in uniforms.”
The observers were also quoted as saying they were “guests, not prisoners of war”.
Earlier in the day, an OSCE source told the BBC that the group’s negotiating team had been sent to Sloviansk to try to secure the
monitors’ release.
The source declined to say how many negotiators were heading to the flashpoint eastern town.
Meanwhile, Sloviansk’s self-declared mayor Vyacheslav Ponomaryov said there was the possibility of exchanging the monitors for militia
members held by the Kiev government.
“It’s the fundamental option,” he told Reuters.
Russia, an OSCE member, earlier pledged that it would “take all possible steps” to secure the release of the observers.
Meanwhile, Kiev accused the militia of using the Europeans as a “human shield”.
The West is accusing Moscow of leading a secessionist revolt in eastern Ukraine after it annexed Crimea last month. Moscow denies the
Russian Foreign Minister Sergei Lavrov said Ukraine must end military operations in the east of the country as part of urgent measures to
defuse the crisis. – BBC News


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