Financial Times

Social Responsibility or CSR as the private sector likes to call it has been the buzzword in the local corporate world in recent years and suddenly companies are falling over each other to be 'do-gooders' for the community.

But are writing blank cheques for charitable projects, putting up school buildings or providing computers and helping communities just one-off 'feel-good' projects that aren't sustainable? Some years back when a private company helped build a pre-school in Vavuniya, the village headman at the opening of the school lamented that there wasn't a regular teacher.

"All are volunteers and the moment the young girls get a job they give up teaching," he said adding that they didn't have funds to pay for a teacher.

The organiser of the project persuaded the company to sponsor a teacher for a year but was that enough? What's the use of a school without teachers; what's the use of a building without students; what's the use of teachers if children are unable to come to school because they have to work to supplement the family income or cannot attend because they don't have money to buy books or shoes or proper clothes? Social responsibility is all about helping communities grow while a business grows, according to Dialog Telekom, Sri Lanka's biggest mobile phone operator, which is providing new meaning to the word 'CSR'.

The company has a big philanthropy arm but more importantly believes social responsibility is about ethnical business, taking communities along as the business grows – not plastering your name across towns when helping communities or building a playground or community centre.
The Sunday Times FT spoke to Dialog CEO Dr. Hans Wijayasuriya and two other senior Dialog officials connected with social responsibility issues to delve deeper into the 'new CSR' that the company is taking on as its contribution to society.

Dr Wijayasuriya:
At a very fundamental level, business needs to recognize that society is a stakeholder. The word CSR itself is not good because by labelling or defining it means that most businesses or large organizations have neglected this area.

Social responsibility shouldn't be a subject of its own. It should be part of life. This is what I have strongly championed because when it comes to decision making, businesses should take decisions based on stakeholder interests.

They take into account shareholder impact, customer impact … so why not social impact? It can be negative or positive. I feel that if business brings society on the decision-making table, that is practicing CSR – what is called business integral-CSR. For example if a decision is taken to build a factory and if that decision is taken from an environmental point of view without bringing society or the local community to the decision-making table then you are not practicing CSR.

But if you do bring it to the table, the very fact that the decision has involved stakeholders and brought their interests to the table means the business is socially responsible.

What percentage of companies practice CSR in the real sense – the way you put it? For example from a media perspective we are flooded with pictures of donations by companies, smiling faces of CEOs, etc.

In Sri Lanka there is pressure to do this. The media also has a role here to play to discuss real CSR. We also do a lot of corporate philanthropy, a lot of photographs. But that is not the real CSR.

Will the kind of CSR that you talk about happen in the future?
I think it will … for economic reasons. Commerce has now been depolarized outside the western province. Businesses have taken challenges, great risks to go on un-tarred roads, go out to the community. Yes there is business motivation too but at the end of the day those are CSR-based decisions, business-integral CSR.

There's a long way ahead for this. But look for example at the agriculture business which is doing a lot of business-integral CSR. It's far more difficult to do that than donating a million rupees.

Another issue I have felt strongly about is that when you write a cheque, you write off that expense … you are not investing. Whereas if a business invests in something that has high social impact, you ensure it's sustainable.

What about business investment in peace as business-integral CSR?
The decision we took to go to the north and east was essentially one of investing in peace. If we do a risk-return analysis, one of the returns was peace. With people being able to communicate and reduce tensions, there was peace and peace would have a positive impact on the business.

One can't fault a business for business being the ultimate aim. When Cargills for example trained the farmers and helped communities their ultimate aim was business … that is good business and also socially responsible business.

So in business-integral CSR you take all stakeholders along as you grow?
Yes, then communities have more income and they spend more. The moment a business is asked to do something that is charitable, this gets written off and there is no commitment. There should also be a culture and a mindset here that a business doing well is nothing wrong. Any consumer won't resent a business doing well if they get good value for their product and if they are also looked after.

How does Dialog fit into this picture of CSR?
In our annual report we have a chapter on social responsibility. But I would actually focus on delivering - like taking risks on behalf of the community, putting effort on behalf of the community instead of writing cheques. We think long term on behalf of the community. That is what we would be doing and putting our money, effort and energy.

Any investments?
Probably a billion rupees in areas which have a high risk index, a decision purely which in the normal day-to-day business parameters would not have been taken.

What areas?
North and east and rural markets in the south, arid areas etc. That is a trend that is being followed by others which is good. But I think when we showed that the north and east had all this potential, everybody followed and now investing in those areas is nothing special.

The social responsibility aspect of the business… was it developed here or a practice from your Malaysian parent?
Telekom Malaysia has a big stake and obviously there is some influence. As a foreign company I found it unique that they have a strong focus for the community.

It wasn't articulated in the way I put it to you but what was there from the shareholder was support for perception of a socially responsible business. For example in the very early stage we said we want to break this (CSR) mould and take mobile phones to the masses at a time when it wasn't even done in India where it was still a luxury. Dialog was the first in the Asian region in 1999 taking it to mass market breaking the halo-that it is a product for the affluent.

Michael de Soysa, Assistant Manager, Corporate Social Responsibility:
We see the current model as the most sustainable one, prudent and honest.
At Dialog we constantly challenge ourselves to see how we do business, that our services are acceptable to people and that it bridges the divide between those who have access and those who don't.
We want to ensure we don't shut out any communities from this technology. For us CSR is primarily how to do business while there is also the philanthropy element.

The other CSR?
This enables to position our brand locally and globally as a caring brand. But CSR fundamentally means how we do business – in our day to day operations.

For example if a company has a target to achieve in six months and by the third month you know you can't achieve it …then you try to do things to achieve this target in an unethical way. We would not do business that way. The idea of being a responsible organization is in being honest enough to acknowledge that you haven't been able to achieve targets.

That helps to build trust with stakeholders. From the CEO downwards we look at the integral element of CSR and ensure every employee in the organization contributes to the decision making process.

You talk of a caring organization in advertisements but that's not the case when subscribers have a problem and sometimes can't get proper and prompt service. That's like cheating!

It's an incremental process. The change is like a catalyst. It's a change in one's mindset. The challenge came only last year when we began streamlining CSR within the company. The Change Trust Foundation which started in 1999 was the company's main outreach organization basically helping NGOs, orphanages, etc. That was more philanthropy and which is what is more widely practiced.

What Dialog is trying to do now is a more sustainability reporting framework, reporting on our social performance that would include our services and diversity of our company in terms of employees.

On social reporting: Here the company lays bare the facts as to how it performs as an employer, an investor, as a business entity. That is different to basically making claims saying we have done this; done that for the community. It makes companies ask themselves – are we leaving our footprint, are we giving opportunities to all, are we working with communities, are we employing marginalized people?

Social responsibility is a needs-based approach where the stakeholders inform the company how it should conduct its business.

CSR emerged globally when various pressure groups started pointing fingers at companies saying they should do business with responsibility.

It's easy for companies to provide benefits, buildings, donations and talk about it in the media. This is not good CSR for it damages the sincerity of the organization.

The company as a corporate body has the power to transform people's lives. But if the company doesn't do business properly then you undermine that trust, that sincerity. You can on one hand enrich someone's life and also do something to destroy lives. A company that helps communities to provide a good education for a child can also ruin the child's environment by producing something that is bad.

How do you define CSR through handouts, donations, etc and CSR through growing with the community?
We looked at the business integral approach – growing with the community. We looked at making SMS available to all communities. We increased our revenue but also made communities engage in this technology which for us was a responsible move because it enabled people who were feeling left out or alienated from using the technology an opportunity to use it.

CSR originated because people started saying that you are doing good and also bad. In developed markets companies are careful about making statements (on CSR projects, etc) because they are held accountable for making such statements.

We are looking at creating employment across the country and looked at the business process outsourcing model… setting up virtual call centres across the country where even differently abled could be recruited to work from home We can create employment, we can employ differently abled people who can't see, who can't walk but who can hear and talk. That's all one needs for this kind of job.

Even when base stations are set up we have questions from the community. Here we discuss with the community and provide responses to their concerns.

There are some ethical issues here. There is a very thin line that separates corporate governance, good business planning … CSR is all of this. It is not about having 10 projects for the year and CSR cumulatively saying this was what was done. CSR is an approach; it is a way of doing business.

Motilal de Silva, General Manager (Corporate Planning and heading the company CSR arm):
Our CSR outreach activities began in 1999 when we set up a Trust Fund called Change mainly to help marginalized groups.

We have done a lot in the areas of education and youth; empowering the differently abled; bridging the digital divide; protecting the environment and in humanitarian areas. Dialog has helped establish a Disaster Warning Network while two flagship projects are the Distance Learning Network and the Moratuwa University Research Laboratory.

Under the Distance Learning Network now in its pilot stage, we have connected Royal College Colombo, Matara St Servatous College and Hambantota's Muslim Ladies College where lessons conducted in Colombo can be seen live in the two outstations schools. Interactive discussions are also possible between these schools. Next year Dialog hopes to connect 25 schools under this project.

The company has also sponsored six students for degree courses in telecommunications in Malaysia and the first two students in this programme complete their four-year degree course shortly.