Corporate Responsibility and the Government

Suresh Kr Pramar

Corporate social responsibility (CSR) is the prevailing management mantra. Businesses are increasingly taking up the CSR agenda to strengthen their brands and appear to be people friendly Socially Responsible identities. Recent surveys in India have indicated that the number of companies which are practicing CSR is growing.

CSR is about the way companies meet their wider obligations, both to employees and to the wider community. Responsible companies realise that their activities have an impact on the society in which they operate. They realise the need to adopt a coherent approach to a range of stakeholders, including investors, employees, suppliers and customers.

Though there is considerable recorded literature on Corporate Social Responsibility little of this has been applied to the social responsibility of governments. If CSR is about treating the stakeholders in an ethical and socially responsible manner then National Social Responsibility (NSR) would be about treating the stakeholders of a nation in an ethical and socially responsible manner. Applying the tools of CSR to governments, including the government in India, shows that, depressingly many, if not most, countries lack social responsibility.

All governments, like business houses, have stakeholders. In fact the list of stakeholders for governments is larger and more populated than those of individual business houses. Treating the stakeholders responsibly is obvious if a corporation wishes to succeed. In the case of a government one would think that a Government would need to treat its citizens responsibly, morally and fairly.

The government’s portfolio of stakes holders include not only the voters, who put them into power, but also their employees, the goods and services providers, international governments and organizations, to name just a few. NSR can therefore be defined as: A State that treats its citizens fairly, looks after their well-being, and is respectful to foreigners – immigrants as well as their trading partners

Jawahir Adam and Michael Hopkins of MHCInternational Limited, a CSR research and Consultancy Company based in London and Geneva, have developed a National Social Responsibility Index (NSRI) which measures whether citizens are treated fairly and whether the State looks after their well-being. Creating an index from zero to one, where zero means absolutely no social responsibility and one means excellent social responsibility

To measure these two aspects the authors used measures of the freedom of the country and life expectancy at birth. For the former the Economist Intelligence Unit’s 2007 Democracy Index which is based on electoral process and pluralism; civil liberties; the functioning of government; political participation; and political culture has been used. And life expectancy at birth is drawn from the 2007 UNDP Human Development Report. The third indicator used is the nation’s transparency and uses Transparency International’s Corruption Perception Index.

Of the 180 countries for which data was collected the richer countries dominated the leading positions with Sweden coming in at Number One (with a score of 1), closely followed by Iceland, and Denmark (both scoring 0.98). The bastions of democracy came further down the list with the UK at 14. Say the authors of the index “its civil liberties have been hard hit in recent years because of its over-the-top intrusive behaviour as a response to terrorism as has the USA with a position at Number 21st. The rising economic powerhouses, the BRIC group of countries, Brazil, Russia, India and China, came 53rd, 119th, 73rd, and 108th respectively. Zimbabwe and Somalia were placed 179 and 180 with scores of 0.11 and 07 respectively

According to the Economist Intelligence Unit’s 2007 Democracy Index India has been placed at 35^th position with an overall score of 7.68. According to the Index India with a score of 9.58 for electoral process and pluralism was better placed than most of the nations occupying the top position in the index, including the United Kingdoms and the USA. With a score of 9.71 the country was again better placed than most of the western democracies. The Economist Index however gave India only 7.50 for functioning of government, 6.67 percent for political participation and 5.63 for political culture.

India has been described as a vibrant electoral democracy with an abysmal human rights record. A United Nations study says that India has failed to properly protect Dalits and tribal communities. Between 2001-2002 as many as 58,000 cases of victimization of Dalits were reported. A report has pointed out that every 20 minutes a Dalit is victimised in India. The condition of women ad children, particularly those belonging to the backward classes continues to worsen.

The recent spate of terrorist and communal inspired violence has further damaged the government’s pretences of being a responsible government. In state after state terrorist operate without fear killing and maiming innocent people. According to official statistics 13,500 civilians and terrorists have died during the past decade in terrorism related violence. Almost every part of the country has experienced terrorist violence. The record keeps getting worse year after year with violence authored by communal forces, and terrorist making life of the people increasingly unsafe.

India’s record of social responsibility has suffered because of its poor record in its efforts to eliminate poverty. A recent report of the World Bank suggests that despite sustained high GDP growth, India is home to roughly one-third of all the poor in the world. The Report claims that India has 456 million people, or around 42 percent of its population living below the new international poverty line of $ 1.25 a day. The number of Indian poor constitutes 33% of the global poor – pegged at 1.4 billion people.

India continues to be listed among the world’s most corrupt countries. According to Transparency International India, with a score of 2.8 was placed at 83 position in a list of 133 nations. Interestingly the survey listed Courts, Customs, Education System, Political Parties, Police, Tax Revenue, among the most corrupt departments in the country.

There is a total loss of faith in the general public with those who are governing the country and the ability of the government to tackle corruption. A whopping 55.8 per cent of those surveyed in India felt that corruption in the country would increase not decrease over time. There is a strong feeling that economic development in India will go hand in hand with an increase in corruption of all types, because there is more money to play with.

Does India have a socially responsible or is t a failed state. Wikipedia, defines “a failed state as a state whose central government is so weak or ineffective that it has little practical control over much of its territory”. A failed state is also one that can no longer perform its national security responsibilities to protect its society or control its territory

National Social Responsibility Index (NSRI)

Rank Country NSRI

1. Sweden 1

2. Iceland 0.98

3 Denmark 0.98

4. Finland 0.96

5. Netherlands 0.96

6. New Zealand 0.96

7. Switzerland 0.95

14. United Kingdom 0.88

16. Japan 0.87

17. Singapore 0.86

21. USA 0.83

53. Brazil 0.61

67. Sri Lanka 0.57

73. India 0.56

108 China 0.47

112 Bhutan 0.46

117. Bangla Desh 0.45

125. Pakistan 0.40

136 Nepal 0.37

179. Zambabwe 0.11

180. Somalia 0.07

Source: MHCi where a

NSRi score of one is

excellent and zero very poor