GCSI Needs To Reinvent Itself

In the March 2008 issue I had written strongly in favour of the Global Compact and how its 10 principles, if faithfully and sincerely adopted and implemented, could help a company become a Corporate Citizen in the true sense of the term. In this issue we carry a slug match between the UNGC Executive Director, Georg Kell, and SOMO Senior Researcher, Bart Slob. The debate is on “Is the Compact Raising Responsible Standards? ” Georg Kell says it does ( which vendor would say that his product is not perfect). On the other hand Bart strongly refutes the claim saying among other things that the Compact is spineless. I have no intention of entering this debate just yet. I leave it to the readers to draw their own conclusions. (The debate is printed on Pages 32-35) I do however wish to take up here the issue whether Indian companies, who have accepted the 10 principles, are really faithful in their commitment. If the attitude of some of the Indian signatories, including the Tata companies, is any indication it is obvious that the commitment is lacking. Being part of the Global Compact, it would seem, is more a Public Relations exercise rather than a strong faith in Corporate Social Responsibility and ethical business. Few people outside the Global Compact Network would be aware that Tata is the only Indian company which is represented on the Board of the Global Compact. Similarly even fewer would be aware that the largest number of Indian companies not fulfilling their commitments to the Global Compact are companies belonging to the Tata Group. Tata were among the first Indian companies to have appended their signature on the Global Compact principles. They were also among the first companies to join in the formation of the Indian local Network, the Global Compact Society India. In fact the first meeting of the Global Compact was held at Jamshedpur and was hosted by the Tata group of companies. Over the past few years several Tata companies have failed to comply with the only Global Compact requirement, the submission of the Communication on Progress. The CoP is an essential requirement. It is a reaffirmation of the company’s continued adherence to the 10 principles. Among the Tata companies which have failed to submit their CoPs are some of the largest, profit making units. Tata, thanks to its founder, Jamshedji Tata, has earned the reputation of being the most people friendly company in the country. Today this image is taking a serve beating not only in India but internationally as well. There are several indicators, including articles in the international media, to the growing public opinion against the company. A recent listing of 93 most ethical companies world wide is an indication of the fading image of Tata. The listing prepared jointly by Ethisphere and Forbes reveals that Tata, which figured prominently in the list in 2007, does not find a place in the 2008 list. According to the authors of the list those who have made it into the list are “ companies who have gone beyond legal requirements, bringing in new innovative ideas to expand public well being.” CSR, say the authors of the list, is not a soapbox and a bullhorn. The loudest does not equate to be ethical, spending on clever marketing and Public Relations. There are many in this country who strongly believe that Tata is living on past glory aided by clever marketing and excellent public relations. Coming back to the commitment of Indian companies the steady erosion of interest among the initial supporters is evidence of the fact that most major companies have little time for CSR or the GC Principles. Over the past year almost sixty signatories have been shown the door. These include many important PSUs and private sector units. Likewise the local network the Global Compact Society India is suffering from the lack of interest in its activities. Started some six years ago the Society has had a laidback existence thusfar content to wake up only to organise AGMs and Annual Conventions. The lack of effective leadership and the uncalled for dominance of one individual has made the Society purposeless. The Global Compact Society India has failed to provide the impetus to further the cause of Corporate Social Responsibility. It has neither been able to attract new membership nor, worse still, been able to retain the original members. Seven original members have withdrawn and 12 others were delisted by the UNGC. Most members feel that membership of the Society has not provided their organisation any tangible benefits by way of enhanced knowledge or support for their CSR activities. There is a strong feeling that the avenues for participation in the organisational activities is restricted to a few of the bigger PSUs dominated by ONGC. Many want that the organisational structure to be made more broadbased to include people with different points of view so that it can be made more representative of all shades of the membership. A major complaint is that the Society is dominated by one single person and that rules and regulations are being ignored. Since inception there have been no elections for office bearers and additions are being made through nominations by a small influential group. Only one person seems to have benefitted because of the Society which has given him the opportunity to gain a world vision. The Global Compact Society India can play a strong role in ushering in a strong and vibrant corporate responsibility movement. It needs a strong sense of purpose and the right direction. There is need to make drastic changes in the present structure to bring in dedicated people capable of delivering results. The Society needs to assume its rightful role as the local network for the UNGC in India. Fortunately there is the will. The President is keen. It is for the office bearers to activise themselves. Editorial In CRBiz, June 2008