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ETHICAL BUSINESS

`Money is the least preferred option for corporate engagement'

Shankar Venkateshwaran, CEO of Partners in Change, talks about the ways in which effective grassroots
partnerships between companies and communities can be forged

by Lina Krishnan
Traditionally, the Indian experience of corporate involvement in social responsibility and in doing good has been of the
`mai-baap' or `charitable' variety, ie, the company interesting itself in its employees' welfare or in the endowment of
socially useful institutions like schools, colleges and hospitals. But the power of the private sector to do bad goes back
even further in time and is not restricted, as some of us may imagine, to the inroads made by ruthless multinationals. Is
it possible to turn around this equation and harness this power into activities, and mindsets, in the community's favour?

Partners in Change is an agency that emerged as a direct response to this dilemma, when Action Aid felt that the
impact of business on poverty could be tackled only if there were effective grassroots partnerships between the
companies and the communities. Where the corporations could experience, first hand, the situation on the ground and
incorporate a business culture that would have a positive impact.

Crucial to these programmes has been the role of NGOs, who PIC feels are the real partners in this "fight against
poverty". Over time, Partners in Change has facilitated many linkages between such NGOs and the private sector,
bridging gaps with an equal understanding of what the company needs and what the community faces. At times a
difficult path, given the completely different attitudes and roles of the NGOs and the companies, degrees of
professionalism, volunteering ethos and so on. PIC has worked with Price Waterhouse, Balmer Laurie, Titan, Ranbaxy
and AT Kearney among others in partnership with NGOs like Deepalaya, CRY, Katha, IRDT etc.

At one level, PIC works at creating a fundamental change in mindsets, but time and again, has come up with solutions
that have had to take into account a single factor: that companies will do good only if it makes business sense and is in
line with their own priorities. There are also disturbing questions over the way these interactions might happen and in
some cases, leave the communities worse than before. So there is a kind of co-opting of both sides at work here. At
the same time, it's a practical ethos that makes the best of possibilities and continues its efforts.

As issues of social responsibility become more important than ever, drawing the private sector into communities
becomes a crucial factor. Whether this is enough to offset the overriding compulsions of profit is something not quite
clear at this point. But meaningful and sustainable partnerships between the marginalized and those companies who
really are making an effort to be socially aware and responsible could go some way in changing the way business
relates to development.

In this interview, Shankar Venkateshwaran, CEO, Partners in Change, talks to Lina Krishnan about how companies can
be socially responsible.

In what ways can companies go beyond business? What has been your experience in getting corporates to
develop some sort of social understanding?
Partners in Change is a non-profit society set up by Action Aid that actually saw the private sector as an increasingly
large player that affects poor people, so it was felt that there was a need to engage it. Basically business has the
potential to do good and harm and we see ourselves as trying to play a role in minimizing the harm and maximizing the
good. So we've definitely focussed on the marginalized and the disadvantaged, seeing the impact on their lives, both
positive and negative, and an inherent assumption is that companies are basically ignorant about the impact they have.

Are they really?

In some cases they are not, but in many instances they are ignorant, and it's important for us to remove that ignorance,
so we look at this engagement process to a great extent as removing that. We look at building partnerships as a very
useful means to engage and for people in companies to understand what happens, and to go back and see. We
usually get classified as fund-raising from the corporate sector; well, that is far from the truth. Not that we think the
writing of cheques is not important, but if you think of it as the sole means of a company's engagement, that's
something we discourage.

The writing of cheques for a cause could be a way to end it at money?

Yes, that's what I'm saying -- we don't want that to be the end of a process, we want a much wider engagement. So
what we do for example is encourage volunteerism.

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It's easier to fund certain activities than to be there yourself, hands on?
Yes, you see, what happens is volunteering is just one of the ways (to participate). We do recognize that it is very
difficult to make time, it's both time and inclination that are the problems. I mean for a person who sits in an air-
conditioned office to go and work in a slum. We know that, we recognize that, I'm not sure if I'm very comfortable doing
that, and I'm certainly not sitting in judgement of these people. And we as an organization do not do that. We're just
trying to say that the process is important, and this engagement can happen in various ways. For example, one of the
things we've done is to get companies to set up ancillary industries where people who are disadvantaged get some sort
of livelihood option.

The moment you start doing that, there is an engagement. There is maybe a supplier-principal relationship, but there is
that relationship. It works around the assumption that say, people with disability can still produce, or people who come
from a different socio-cultural background, in a non-working ethos. You need to understand that, you need to factor
that. You need to recognise that whereas in a factory situation you might produce 5000 units per hour, here it may be
3000 units per hour.
For example, at Titan we've done this...and we see change happening. Very small, very limited. We still haven't cracked
the issue of how to widen the impact, but we'll see that happen. So it's a question of buying products, setting up
ancillaries, basically engagements of various forms. So to us, money is still the least preferred option.

It's also the easiest.

It's too easy, it's too distanced. For example, when you're looking at it from a fund-raising perspective, it's fine to
support drought in Rajasthan or the cyclone. But even there, you can actually find ways to get involved. For example,
take what we've done in Orissa: when you've done all the micro planning, when you start building houses, that's the
time you actually need to call in people. There is no point in them going at the time of or just after the cyclone because
they are not equipped to handle that kind of thing. Nor, in fact, are many who give financial aid. Most NGOs take
money and forget. They don't even report back. You need to. The moment you start doing it, the engagement process
is on. A process that is actually great fun, it can be very imaginative!

You're playing a positive role. But does it also work as a sort of indirect pressure? Once you've moved to a
certain level, once you've built a relationship between the company and the NGO, are you, as a partner,
exerting some pressure?
That's the theory of it. But what we try and do is get the NGO partner on the ground to respond, and NGOs need to do
that. It's a question of how soon, how well they can do that. We are the intermediaries. In the case I just mentioned, we
put together Titan and those NGOs. The NGOs are the real partners; we are just the intermediaries in the process.

The facilitators?
Yes, I don't think it would've happened if we were not there. We don't think it will stay unless we are there. We do not
want to be there forever, we are not meant to be there forever. At the same time, that's the real contact. That's the
capacity that we need to build with the company so that we can walk off after that. But our role is in a different
perspective, we can't look at the micro issues, we can only start engaging in macro issues.

What is the experience of having been part of something like this like for companies?
There's definitely a feeling of great satisfaction, there's no question about that. And there's also a feeling that wherever
companies get into this kind of a partnership, the expectations have been more than met.

The question is, what is the motivation, that's often asked. Are they doing this because of tax, are they doing this
because of publicity? And frankly, that's a debate I don't even want to get into, as long as they are trying to make a
difference. I think there has to be a win-win, otherwise it can never work. I'm doing this because I'm also gaining
something out of this, which is why I left after 15 years in the corporate world. I may not be getting money, I'm not
getting great professional satisfaction. But I feel, within my constraints and capacities, I'm trying to make a difference.
To me, that's my win-win: if I wasn't getting that, why would I do it? So I think the philanthropy business is a theoretical
concept, I don't believe in it.

In fact, there's this very interesting model on social responsibility that's a government benchmark. There are two broad
divisions: one is internal to the company, one is external -- to the community. The one that's internal to the company is
your business basis -- dealing with your suppliers, your customers, your supply chains. There are some companies
which are going through the stage of saying that if you're a closing company you should be concerned about going up
above and seeing how such conditions are there, so that's a business basis. Then when you go into the community,
you've unpacked it into three categories; one is pure philanthropy, that is, doing something without expecting any kind of
return. Then there is a thing called social investment, where you're talking about doing good, but you're expecting a
long-term return, in whichever way you want to define it -- and that's where you get company-specific. But in the long
run, there is a benefit.

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For instance?
It could be anything from the community protecting you in bad times, in communal riots and so on, where the targets
are usually people who are better off, people who are working for companies or companies themselves. And there are
cases of communities who have protected.

Because you have a relationship.

Yes, there's a relationship. So that could be one sort of long-term return.
The other long-term return could be the lack of self-interest as prosperity
increases and so on. Basically it's a very nebulous thing, it's also very
specific to companies. It could be just publicity which is not going to happen
tomorrow. The Tatas are known not for something they've done today but for
the last 100 years. So that's a social investment. And then there is a more
immediate short-term return thing for which one of the best examples is you
buy my product and I'll contribute to CRY, or you buy an ST, you know, like
what Procter & Gamble has done, and I'll give your one rupee to Orissa.
Which has its own connotations of morality, not so much ethics -- they are
just trying to get an immediate, short-term business benefit out of doing something like this. Making a profit out of giving
something away. You are also getting a benefit, because they are trying to distinguish their product in the market
basically. Like what Samsung is doing in Gujarat: you buy a Samsung TV and they'll give you water. It's opportunistic,
but then marketing is all about being opportunistic. The question only is: at what cost? We believe it's never blacks and
whites, the areas are always grey. Not who benefits, but who's actually going to bear the cost. The moment you start
externalizing costs to poor people, then it doesn't become acceptable by any standards. And that's the way we look at
this whole thing.

If you're saying that you buy a watch or an ST, there at least one is anyway buying a certain product; you
choose a certain brand because you feel a part of it is going towards something good. But giving away tankers
of water! I personally find that differentiation unacceptable.
I don't find that so.

Don't you feel that it is a commodification of what is happening, of the giving?

But at the same time Samsung, which they don't talk about, has paid for supplying water to 15 villages in Barmer, three
times a week, for 60 days. They're not talking about that.

What I'm trying to say is, there are two kinds, and in this case by the same company.
The second is pure philanthropy, that's what I'm trying to say; you need to unpack this whole thing.

If they were more open about giving water purely as a service, don't you feel that would set a better example
than to have this cash-in strategy?
If they do that you'll have other people criticizing it, saying that this is how they're salving their conscience. It's a no-win
situation.

I agree it's not easy for the corporate, in fact, some feel there is too much pressure on them, everybody goes
to them during calamities, but their role is not acknowledged.

It's a question of where you're coming in. It's your attitude on social responsibility.

Let's talk about PIC. How does it work, do you have companies coming to you with some thoughts, or do you
suggest an action plan to them?
The motivations vary. Certainly there are enough companies who have come to us, but coming to us is also not easy;
it's not as though we are very well-known.

For instance?
Well, some of the Tata companies have come to us. There've been some public sector companies, there have been the
odd TNCs, so it's a fairly varied mix. Right now how this works is, somebody knows somebody knows somebody --
that's typically how it happens. Someone may also get in touch with Action Aid, then they'll tell us. Increasingly that's
changing, because we're getting slightly better known, because we go to CII, and CII says these guys are doing this.
But that, like you said, is not such a great indicator of intent. I think the intent is fairly high, that there is no doubt about.
But it's the first thing that comes off at bad times, and it's the last thing that goes in when times are good. So we get to
know about recession before everybody else does.

You're saying when the company has to cut costs, they choose to pull the plug on the programme. Then what

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happens to the community, the relationship and all the things that this corporate is trying to achieve? Do they
think about that or do you communicate it?
No, they don't think about it, certainly they don't. I mean, those are the realities. I've given you the example of Titan.
Most of this project that we'd done, near Bangalore, was during the time of recession. So whatever they'd committed in
terms of watches etc, they were unable to give. Then there's nothing you can do about it. The fact of the matter is, at
the end of the day, they are in business. So they are not going to get watches stacked by this unit just to keep it
running. That's an unfair thing to expect. I mean, it's unrealistic.

What was the project?

It's an ancillary unit; they fix straps and do some processes, so this unit has a limited capacity. Whatever the operation
is, it gives work.

To the community?
Yes, it's an NGO that runs this, in an area of so many kilometres around the unit.

How does the community react to this sort of interruption?

In this case, it's not the community, I think that's the other thing. It's just 30 people. And that's typically the case with
corporate involvement. It's never on that scale. For the reasons you mentioned, it's not feasible to keep one community
exclusively dependent on one company. It has to be bits from each. We're not trying to develop this process. Our
objective is that the way these companies behave needs to change. I think that's important to understand. So we scale
the engagement in such a way that it doesn't affect it too much when it does end.

And even if there is involvement for a while, it does create awareness and understanding of related issues that
these young managers will carry with them.
That's part of the reason we don't look at cash avenues. That can be downscaled, but where there's involvement, an
element of volunteering, then it continues. I went the other day to meet the MD of Tata Infotech, to thank him for what
one of his staff had volunteered to do on his own. That's part of the Tata culture, people feel they can take a risk. And I
didn't want it to go unrecognised. He just said, "I'm glad you came, all our guys want to be used, you just tell us how."
So that's how we started a whole education programme.

Do you find with the new players, the knowledge-based companies like Wipro, the involvement goes beyond?
Do you find them investing in, say, education that will give them a workforce, or do they get into primary
education and create real change?
Specifically, we have worked with Wipro and they are interested in only looking at primary education. But on the other
hand, there is this US company called Cisco Systems, one of the biggest network companies, who feel there's going to
be a huge gap in terms of skilled people to work on networking hardware. So they have two kinds of programmes: one
is a purely commercial kind of education, and one is non-profit. They work with units that can be trained, if they are
Class X pass, trained for one year, two years, find a job.

Now to my mind, there's a classic win-win. For Cisco's, it's clearly a business thing. But for us, there's an opportunity
for some X-pass to get into a job that will help him earn several times more than perhaps a Class IV government
employee after you pay several bribes, or casual labour. So we're trying to grapple with how to make the company
focus on poor communities. We are at that level of discussion. We don't care about labels, whether they're taken on a
regular basis or as a social responsibility. We'll tie in with prospective employers, commit them to taking these guys on.
So that's the equation. If they can't do it, then we're not interested. You have to make corporates understand that it's
not a flavour of the month thing. To expect pure philanthropy from a company is fine for a natural disaster, for a one-
off. But if you want them to get into an engagement process, there has to be something for them.

Lina Krishnan, a former advertising professional, now writes and works on development issues.

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