Bangladesh’s Finance Minister Mr Abul Abdul Mal Muhith has recently commented on how the companies in the country are spending their CSR (corporate social responsibility) contributions.
According to him, the money spent is more often being misused, and not benefiting society and, for that matter, the country.
He added that the biggest portion of the money is being spent in organising get-togethers, merry-making, and sponsoring unnecessary events. He also put forward his guidance for developing a national policy for CSR.
We must thank the minister for highlighting this issue. Yes, he’s very much right; most of the money that is being spent across the country, not only by the companies but also by thousands of individuals, is not being spent intelligently.
However, we may also want to remind the minister that the government stake-holders are also responsible for this way of spending CSR money, as they are one of the biggest beneficiaries of sponsorships from business concerns.
And there are also non-government and private beneficiaries who get quite a lot from the CSR contributions from the private sector.
Whether the companies have spoilt their stake-holders or the stake-holders saw an opportunity in this is a matter of debate, but yes, there are millions of intelligent ways that the money could benefit society in the truest sense of the term.
Well, this is not the first time that a government high-up has directed to formulate a CSR policy for the country; this matter has been in everyone’s discussion in the last 15 years, but the policy-formulation wasn’t taken up seriously.
Bangladesh still remains unsure about the definition of CSR and following the old theory of philanthropy while the rest of the world has gone several steps forward as far as CSR is concerned.
They don’t even call it CSR these-days; it as now CR (corporate responsibility) and has been for a long time.
A great chunk of the philanthropic money is spent in mosques, churches, temples, organising get-togethers and AGMs and printing souvenirs, organising tournaments, etc.
Although helping to build religious institutions could be termed as philanthropic, this way of spending money has still got a “pro-people” touch.
On the other hand, organising get-togethers and AGMs and printing souvenirs is far from being an intelligent way of spending money. That’s why the companies lose steam when they spend from their revenue for these purposes.
If the companies don’t find any link with the business they do, ultimately they will run out of funds to sponsor these events.
For example, a food manufacturer spending on a nutrition campaign would be more meaningful than sponsoring a feast for a certain group.
Again, a telecom operator’s contribution would be more meaningful if it was spent on helping digitise the country. A shoe manufacturer would do great if it spent its CSR money for the protection of the environment.
If a construction company builds houses for disadvantaged buyers using different payment options such as flexible mortgages made through payroll deductions, it would clearly help the disadvantaged afford decent homes whilst, at the same time, it would benefit it as a business
There are many such examples; and the companies in the country that are trying to build proper corporate governance are already following all the modern definitions of corporate responsibility.
They want to become good corporate citizens.
They want to be more responsible for the workforce they employ in their businesses and be more compliant with the laws and environment of the country they work in.
But above all, they now want to look at their social responsibility strategically.
For example, if a construction company builds houses for disadvantaged buyers using different payment options such as flexible mortgages made through payroll deductions, it would clearly help the disadvantaged afford decent homes whilst, at the same time, it would benefit it as a business.
This is what you call strategic CSR. Strategic CSR should be a win-win formula.
We appreciate the minister’s concerns about the misuse of CSR money and enthusiasm about formulating a CSR policy, but he would do a great service to the nation if he could guide the policy-formulators about the sustainability of social responsibility.
Because CSR is about resources and utilising those resources wisely.
Ekram Kabir is a writer.