Doctor, nay Director, heal thyself

Last week a Pune State Transport Bus driver ran amuck and killed 8 persons on the road and injured at least 28 others. Who should be held responsible for the incident – the Driver, the Managing Director of State Transport or the Transport Minister? The answer is clear – it’s the bus driver certainly. But, if we were to alter the situation slightly and it’s established that the accident occurred due to poor maintenance of the buses, which was within the knowledge of the administration – the proposition will change dramatically.

The primary responsibility of a public transport service is to ensure the safe travel of its passengers. If safety standards were compromised knowingly or willfully – the blame cannot be limited only to the driver and it should rightly go all the way to the helm of the organization. If it’s proven that, the bus driver was mentally unsound (just as it could have been a case of bad eyesight) the question would arise if the organization had a system of regular health check-ups of its employees – especially the drivers in whose hands you trust the lives of hundreds of passengers.

Since the AMRI incident, an analogy is being drawn with a train accident or deaths in government hospitals and the question being asked is – if the Railway Minister or State Health Minister are not arrested after a rail or hospital tragedy, why should directors of a private hospital be charged for an accident in their establishment. The question has been raked up again with the arrest of the 2 famous Doctors on the AMRI board - Dr Mani Chhetri and Dr Pronab Dasgupta - last Friday. In my opinion, the logic is both warped and specious.

The larger issue is one of Corporate Governance. Historically, Corporate Directorships were treated as a freebie – a lot of perks without responsibility or accountability. The Satyam, Enron and other cases of corporate misfeasance brought home the point that, Directorship is serious business. But, the focus was primarily on financial aspects and softer issues like safety at work place didn’t get too much attention. The only case in which the culpability of directors for an accident was tangentially touched upon was – perhaps – Union Carbide’s Bhopal Gas Tragedy matter.

Managing a hospital as a corporate business enterprise – where you are dealing with the lives of people is a different ball game. There is a huge element of trust and an unwritten contract of indemnity involved. When you are soliciting patients for treatment and care, in a way you are taking charge of their lives. Here, people getting onto the Board of the Hospital can’t treat it casually - like the Membership of a Club Committee – and must be conscious of the responsibilities that come along with it. You can’t accept the position of “Managing Director” being naïve about the legal obligations of the role.

The AMRI case is, of course, muddied by murky politics. Initially, there was a parochial twist given to it by insinuating that, only the Marwari (and “non-Bengali”) directors had been singled out. The subsequent arrest of the 2 doctors on the Board – could well have been as a reaction to that criticism. Now there is an outrage amongst the doctors’ fraternity in the city that, this will deal a severe blow to the medical profession itself. But, both don’t change the basic nature of the contentions.

The public has a right to know what kind of pecuniary benefits these ‘external’ directors drew from the company both directly and indirectly (e.g. did they treat patients privately in the hospital – which would be a direct conflict of interests unless they were also engaged in a ‘professional’ or 'executive' capacity and could itself could upturn the case on its head – taking the wind out of the claims of these doctors that they had no knowledge of the day-to-day running of the place). To what extent – they involved themselves in the affairs of the hospital beyond signing Board Minutes and collecting ‘sitting fees’. If they didn’t take interest in the basic functioning of the hospital it could tantamount to dereliction of duty.

A “company” is a creature of law. It has a ‘legal persona’ – which is represented to the world at large through its Board of Directors. In case of lapses, the final recourse of the law is to the Directors. But, if they can’t be hauled up – due to any lacunae of law – then it would tantamount to letting the companies go scot-free.

The defining question, to my mind, is – whether this was a sheer accident or was it preventable in anyway. If the weight of evidence points towards the latter and there is proof of legal violations found – there is no way the Directors should escape indictment.

To use a cliche - the law has to take its own course. But, the government machinery is notoriously inefficient. So, one can take it almost as a certainty that by engaging the best of legal fire-power – all of the Directors would walk out unscathed sooner than later. But, if this leads to people thinking twice before accepting directorships – doing their own due-diligence on the organization and credentials of the promoters and insisting on their rights as directors to be involved and kept informed about the operations of the hospital – it would still serve a limited purpose. The best, of course, would be if this restrains – at least to some extent – the crass commercialization of Healthcare in our country. But, perhaps, that’s a little too much to expect even after so many people paid through their lives for this sad lesson to the society.

When is CSR Sexy?

Being a born drifter, after sailing through some choppy waters in the last few years – I floated into the world of Corporate Social Responsibility (CSR) sometime back. I saw in it an opportunity to dip my toe into the social sector – something I had been contemplating for long as a post retirement career option. Unlike some contemporaries who took a plunge into the NGO world only to jump out with a start, it has been – thus far - a rather fascinating journey for me.

Over the years – a veritable industry has spawned around CSR. Now with all brouhaha over Climate Change, Carbon Emission and Sustainability – it is mega business really. Not a single workday passes without my receiving a call or invitation for sponsoring or participating in a conference or seminar on CSR (paid, of course). Consulting firms have also jumped into the bandwagon starting their practices – to advise companies on how to develop their own CSR Strategy and roll out CSR programmes. NGOs big and small come up with proposals for “partnerships”.

Green-wash, Blue-Wash or White-wash?

Without a doubt CSR has come a long way from the days of Merchant Charity and Gandhian Philanthropy to responsible corporate citizenry. It is – understandably – still largely driven top down by the CEO or the owner-promoter, often goaded by a conscientious Board of Directors. Much of it, many would argue, is just lip service for the purpose of publishing in Annual Reports or for making presentation to industry bodies and the government. At times, it is also with some collateral motives - what has come to be known as “Blue-wash”– (where companies aim at distracting attention from the social and environmental consequences of their production and products) or “Green-wash” (polluting industries trying to buy their ‘license to operate’).

Of course, the UN Global Compact and MDG (Millennium Development Goals) have been pushing corporations towards re-organsing their businesses along sustainable lines. But, even otherwise, the movement is beginning to gather steam across the world. A lot of this is because of pressure coming laterally from external stakeholders (Communities, NGOs, Government and share-holders in some instances) and also, very often, from below – i.e. the employees.

The Satyam Effect

Increasingly employees – especially the younger ones – are becoming conscious of the kind of organizations they join and work for. Though’ the discounted head-count of Satyam is still a whopping 40k, socially responsible organizations like Infosys and TCS still command a premium in the employment market. Another phenomenon , which seems to be catching up is employee volunteerism – with more and more people within the organization wanting to contribute their skills and time to the community. Earlier this used to be just a few good souls wanting to do their bit for society, putting in some work for charities in their spare time. Today it is happening in a much more organized form - with groups of employees coming together to help communities around their immediate sphere of activity using their own and the organization’s core competencies. Overseas many organizations have a clear policy for employer-supported volunteerism – where companies encourage its employees to do volunteering work by giving time-off or by making matching monetary contributions for their efforts etc. In India too this trend is picking up. A band of young, passionate social sector professionals are making the difference.


Just Hot Air ?

It’s fashionable these days to try and make a business case for selling the concept of CSR. The standard line is ‘why CSR is good for your business ?’ and the common arguments used are CSR helps in creating employee motivation, brand premium, consumer loyalty etc. While these can certainly be incidental benefits – the logic is far too tenuous to hold water for today’s CEOs who being hostages of the ‘street’ can’t look beyond the quarterly numbers. Therefore, you can’t quite fault Stefan Stern who in a recent column in the Financial Times (Read "The Hot Air of CSR" by clicking here ) writes “now that recession’s here we can forget all that nonsense about CSR and get back to making some money”.

But, CSR need not be through Cheques alone. In fact – some of the best CSR programmes have a very small monetary component, if at all. Good corporate governance, taking care of minority shareholders, promoting work-place diversity are by themselves good CSR.

Much before the term CSR gained currency – way back in the early 80s, Hindustan Lever (not HUL!!) had a Rural Training Program under which every Management Trainee of the company had to compulsorily spend 2 months in a village, in the very backward District of Etah in UP, where the company had a Dairy Unit. During this period the trainees (“Manager Saab” as they were lovingly referred to by the gracious villagers) were expected to provide managerial inputs for the development of the villages. The motive was not entirely altruistic. The visionary Chairman of the company had seen that the survival of the Dairy Unit and economic upliftment of the District were closely inter-linked. A collateral benefit was the solid “grounding” it gave the Management Graduates in the basics of rural marketing.

Often tiny innovations make for great CSR. A chain of Cafes in Kathmandu employ only speech and hearing impaired waiters. Many years back – I remember a small snack bar at the end of Prabhat Road in Pune used to engage needy students. A placard on the table requested customers not to hurt the dignity of the boys by offering them tips. But, instead – if they wished – to put in their contribution into a box, the collection from which would be used for subsidizing the cost of their books and tuition fees. I wonder how many Corporates would think of engaging physically challenged individuals in their pantries and canteens – jobs they can easily do.

Heart, Head or Condoms ?

But, CSR is not just a matter of the heart it’s a function of the mind as well The real answer to Stefan Stern’s provocative thesis, therefore, lies in how CSR can be woven into the fabric of the organization – where it is not an ‘add-on’ or ‘stand-alone’ activity but an integral part of the operations to yield visible and tangible benefits. Strategically conceived, good CSR practices can actually help companies deliver better bottom-line results – which can look especially attractive, when the chips are down. HLL (sorry, HUL)’s Project Shakti and ITC’s E-Choupal are 2 such examples , – which even after discounting the ‘hype’ have significant top-line potential for the 2 companies. The ICICI Foundation’s foray into Micro-financing and Social Entrepreneurship is another good model to emulate.

In the 70s and 80s, consumer product companies like HLL and ITC used to sell Condoms (marketed under the Government's Family Planning Programme) through their Distribution Channels – which, to my mind, was also a form of CSR. So, when CSR is not just ‘good for business’ but it becomes a part of doing business, does it begin to look sexy !!