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Corporate Social Responsibility : The Role of HR
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Corporate Social Responsibility is a concept that seeks to bring together the apparently exclusive worlds of the corporate and the society. Society here means all the stakeholders in the firm. CSR implies that it is the duty of the corporate to ensure the safety of all the stakeholders. It is closely linked with the concept of sustainable development whereby not only financial concerns should drive the decisions of a firm but also concerns of the society, environment, etc…

Corporate Social Responsibility has manifested itself in various forms. Some of the survey reports indicate that:

• 200 institutional investors who controlled $3 trillion assets of McKinsey were interviewed. The results showed that 80% of them would rather invest in a company that was well governed even if the financials did show big money, than in a company with poor governance and higher stock price.

• In a survey done by CLSA they found that average return for corporate with good governance was 267% while for the others it was only 127%.

• A Harvard – Wharton study of 1,500 US firms showed that a firm with better CSR had a stock price that was consistent and stable.

The key considerations of implementing CSR as a business practice are:

• A CSR strategy that is coherent and is based on sound values and integrity offers a firm business benefits as well as contributes to the betterment of society

• Such a strategy entails that the firm interacts with local governments, NGOs, etc…

• While framing and implementing CSR strategies, a company must keep in mind to encapsulate the local culture so as to achieve extensive reach.

Role of HR

HR has a major leadership role to play in initiating CSR practice in a firm. As a first step, they could network with the HR representatives of other firms so as to learn about their CSR activities, study them with respect to lessons learnt during implementation as well as try to partner with them on future activities. The primary role of HR is to attract and retain talented people. They do not hire people simple based on their educational qualifications or work experience. In a survey performed by SHRM 2004-2005 Workplace Forecast, the key responsibilities of HR are to demonstrate return on investment, promote corporate ethics and build a human capital and people management team. 63% of HR is undertaking learning and training activities in the firm, 40% is amending the firm policy in response to environmental factors, and 32% is working to increase involvement in social activities.

HR is already involved in implementation and communicating policies and ideas across the organization. They also are responsible for the systems and processes that are related to effective delivery. Hence they are most suited to develop CSR policies. The risky part is that once CSR is built, it must perform in a consistent manner if it has to pass the scrutiny of the stakeholders. In order to build and sustain this trust, HR has to frame CSR competencies:

• A clear understanding of society
• Capacity building
• Constant questioning of common business attitudes and thoughts
• Evaluation of relationship with the stakeholders
• Integrating cultural diversity during implementation of CSR

With HR spearheading CSR, the future of a firm can be strengthened in terms of its product responsibility, sustainability, and quality.


Comments Listing
Posted: 16/11/2011 07:10:27

CSR – Depend upon the company to company, but in general company work for society on behalf of Project. On the other hand, allocation of some portion of its profit for corporate social responsibility
According to new proposed bill, which is finalizing the New Companies Bill, has accepted a Parliamentary Standing Committee's recommendation on the issue. The standing committee on finance headed by former finance minister Yashwant Sinha has proposed that companies with a turnover of Rs 1,000 CR or net profit of Rs 5 CR or more allot 2% of their net profit for the preceding three years on CSR.


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