"Social Impact Assessment Audit" In CSR - The Boy With Tiger's Heart And Case Study

The boy with "Tiger's Heart", only conducts regular "Social Impact Assessment Audit" or meet "CSR Compliance". This is reality. Weak, confused CSR Head, avoids "Social Impact Assessment Audit" as well as the compliance. They wait for the limit to cross. This is poor culture. Such CSR Head, fails to understand the difference between the "National Vision" Vs. the "Individual Vision" and the difference between the "voluntary social audit" and the "compulsory social audit." Regular "Social Impact Assessment Audit" is a good sustainable practice.  Good Companies follow regularly  "Lean Management" with "5S Audit and Social Audit". They demonstrate here, social oriented responsibility. They do not wait for the threshold to cross, as seen in the Indian and small Chinese companies.  The  good practice of regular conduct of Social Audit, is a wisdom, which only comes from the company culture and its  "CSR Policy".    

Some bad culture oriented companies do not care for the regular "5S Audit and Social Audit". Mostly these are Indian and Chinese oriented companies, where scale of violation is very high. This violation  notion is coming from the employer sitting at the top level as the Managing Director. Such MD, who has little respect for the Law, not only puts his company at peril, but spoils the brand value of his CSR Team also. Not only the MD shall have to cough up huge fines here, but the CSR Head shall have to cough up also huge fines with more future trouble. Also, no employer in the Job Market, consider such CSR Professional   as a potential employee. My personal experience is that as, HR Head in previous company, I had to recruit CSR Manager under me. I used to put tough background information and investigate thoroughly. If employee is from the offender group, then company doors are closed. This is the reality, which I had to do  with strong "Tiger Heart" to retain clean culture inside the company, then invite any pollutant culture from the outside. 

Case Study:

There is a case from the Maharashtra (name confidential).  This company avoided CSR compliance. The MCA data portal caught immediately the violator. A show cause notice No.: ROC/CSR/428/134/2016/2261 dated 16.09.2016 was issued to the company seeking explanation for violating provisions of Section 134(3)(o) of the Companies Act, 2013 r/w Section 135(5) of the Companies Act. The notice was served on 16.09.2016. After receiving the show cause notice, the company transferred immediately the earmarked CSR fund of Rs. 8,30,469/- to the Prime Minister’s National Relief Fund on 29.03.2017. The MD and officers were heavily fined by the Hon'ble Tribunal. There is excellent lesson from this learning case. This is summarized below:  

Develop CSR Team With Tiger's Heart: 

1. Develop good culture of "Social Audit". Do not wait for the threshold to cross. The "Audit Objections" marked by the "Social Auditor" shall give you more wisdom to change and abandon those bad practices.  

2. Fight aggressively with the MD. If he is not changing mind. Politely warn him in the National Cause. If MD again not changing mind, abandon such black tinted company. At least you will save your face value. 

3. In above case we have seen, Rs. 8,30,469/ which could have been used in better way for brand promotion through the CSR, has been used through the short cut, only after the offender was caught.  In CSR, The Prime Minister’s National Relief Fund, is a short cut for those CSR Team, who comes up with unplanned vision. 

4. Make advance plan where you want to put CSR Fund. You can put your fund and find matching implementation partner through the CSR Portal Exchange, launched by the Government of India. There is again caveat. Not all implementing partners are good. Check their degree of performance execution with the help of a good social auditor. 

5. CSR Law including the "Social Impact Assessment Audit" are the backbone of the Social Engineering in India. Do not break this fabric. 

6. You can use your CSR Fund in meeting the cost of the "Social Impact Assessment Audit" and providing training to the CSR Team, in developing their capability in  "CSR Need Analysis", "CSR Audit", CSR Compliance etc. Nothing required to be separately booked against the company expenditure. All these are CSR expenditures, allowed under the Company Act. 

7. Good companies invest CSR Fund in conducting "Social Impact Assessment Audit" and enhancing Capacity Development of the CSR Team as well as enhancing the knowledge of the implementing partner. 

( The writer is a Pan India Practitioner on the "Social Impact Assessment Audit". He is a "Qualified Social Auditor" from the ISAI (ICAI). He is Director of HR Lab, a "Social Impact Assessment" audit firm. Apart from Social Audit, he provides consultation on the CSR funds, CSR Programs, CSR Need Assessment; CSR Program Measurement; Entry & Registration- Social Stock Exchange & provides Capacity Development Training to industries on the CSR. He is based at Delhi-NCR. He overlooked at senior position as General Manager and Deputy General Manager in the previous MNC Company in India for more than a decade. He may be approached at: birendrajha03@yahoo.com )

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