title: Mandated CSR expenditure: the Indian experience

authors: Mukherjee, Abhishek

subjects: Corporate Social Responsibility (CSR)

abstract: The idea that companies service a broad range of stakeholders dates back to the 19th century but has gained increasing traction in more recent times. The question is what to do when the corporate sector fails to keep pace with societal expectations. The Indian Government’s response was to pass legislation on 12 August 2012 to make it mandatory for large corporations to spend a minimum of 2% of their profits on CSR activities, and then to amend this legislation 18 months later to specify the area where these funds must be allocated. In this thesis, we use India as an example of the success or otherwise of taking decisions related to CSR largely out of the hands of management. We analyse the impact that the mandatory CSR regulation may have on investors’ perceptions about what the resulting increased expenditure on CSR will have on corporate profitability, and we then investigate how the companies perceive the mandatory CSR regulation.
There are three studies in this dissertation. The first study uses the flow of information relating to the introduction of mandatory CSR expenditure in India as a means of measuring investor perceptions of the impact that the resulting increase in CSR expenditure will have on company profitability. We use both event study and regression analysis and find that when mandatory CSR spending was first mooted in mid-2008, investors expected that more CSR expenditure would increase future corporate profitability. However, by the time the legislation was passed in August 2012, these expectations had changed to the opposite view.
In the second study, we investigate the drivers and barriers of CSR expenditure, determine the attitudes of corporations towards CSR activities and the impact of making CSR spending mandatory. We surveyed 223 Indian corporations and find that the attitudes of companies on CSR spending largely vary with age, size and type of ownership of firms.  The results of this study indicate that the expenditure on CSR in India is very much dependent on the availability of funds. Also, we provide an explanation for why a large number of Indian companies failed to comply with the requirement under the legislation to allocate 2% of profit towards CSR.
In the third study, we test both the relationship between CSR expenditure and financial performance, both before and after the legislation was introduced. We use panel regressions to analyse the direction of the relationship between CSR spending and firm performance, and then the difference in difference regression analysis to examine the overall impact of mandatory CSR regulation on firm performance. Our findings suggest that the legislation has fallen short of expectations both in terms of the volume of CSR expenditure that has been generated, and the purposes to which it has been directed. In particular, we find that the law has weakened the previously positive relationship between CSR and profitability which can have a perverse effect on the willingness of companies to spend in this area. We conclude that great care has to be taken when implementing mandatory CSR if it is to be effective.

text: Mandated CSR expenditure: the Indian experience The idea that companies service a broad range of stakeholders dates back to the 19th century but has gained increasing traction in more recent times. The question is what to do when the corporate sector fails to keep pace with societal expectations. The Indian Government’s response was to pass legislation on 12 August 2012 to make it mandatory for large corporations to spend a minimum of 2% of their profits on CSR activities, and then to amend this legislation 18 months later to specify the area where these funds must be allocated. In this thesis, we use India as an example of the success or otherwise of taking decisions related to CSR largely out of the hands of management. We analyse the impact that the mandatory CSR regulation may have on investors’ perceptions about what the resulting increased expenditure on CSR will have on corporate profitability, and we then investigate how the companies perceive the mandatory CSR regulation.
There are three studies in this dissertation. The first study uses the flow of information relating to the introduction of mandatory CSR expenditure in India as a means of measuring investor perceptions of the impact that the resulting increase in CSR expenditure will have on company profitability. We use both event study and regression analysis and find that when mandatory CSR spending was first mooted in mid-2008, investors expected that more CSR expenditure would increase future corporate profitability. However, by the time the legislation was passed in August 2012, these expectations had changed to the opposite view.
In the second study, we investigate the drivers and barriers of CSR expenditure, determine the attitudes of corporations towards CSR activities and the impact of making CSR spending mandatory. We surveyed 223 Indian corporations and find that the attitudes of companies on CSR spending largely vary with age, size and type of ownership of firms.  The results of this study indicate that the expenditure on CSR in India is very much dependent on the availability of funds. Also, we provide an explanation for why a large number of Indian companies failed to comply with the requirement under the legislation to allocate 2% of profit towards CSR.
In the third study, we test both the relationship between CSR expenditure and financial performance, both before and after the legislation was introduced. We use panel regressions to analyse the direction of the relationship between CSR spending and firm performance, and then the difference in difference regression analysis to examine the overall impact of mandatory CSR regulation on firm performance. Our findings suggest that the legislation has fallen short of expectations both in terms of the volume of CSR expenditure that has been generated, and the purposes to which it has been directed. In particular, we find that the law has weakened the previously positive relationship between CSR and profitability which can have a perverse effect on the willingness of companies to spend in this area. We conclude that great care has to be taken when implementing mandatory CSR if it is to be effective.

year: 2017

title: Whose future? Whose choosing?: Counselling in a context of (im)possible choice.

authors: Kotzé, Elmarie

subjects: school counselling

abstract: Critically reflexive practice is at the heart of counselling, and even more so when clients come face to face with (im)possible choices. As counsellor educators, the authors show counselling practice at the edge of uncertainty. This article features a counselling context in a secondary school. It describes a fictional situation where action is called for in the midst of undecidability, at an impasse in the life of a young woman client. The article explores the aporia that confront the young woman and the counsellor, in the context of education, career, families, cultures and communities. The authors show that these explorations produced transformational questions for their teaching practice as counsellor educators.

text: Whose future? Whose choosing?: Counselling in a context of (im)possible choice. Critically reflexive practice is at the heart of counselling, and even more so when clients come face to face with (im)possible choices. As counsellor educators, the authors show counselling practice at the edge of uncertainty. This article features a counselling context in a secondary school. It describes a fictional situation where action is called for in the midst of undecidability, at an impasse in the life of a young woman client. The article explores the aporia that confront the young woman and the counsellor, in the context of education, career, families, cultures and communities. The authors show that these explorations produced transformational questions for their teaching practice as counsellor educators.

year: 2011

title: Piahana Hou: a Ngati Rahiri rangatira

authors: Hart, Philip

abstract: Piahana Hou, as the half-brother of Karauna Hou, had an illustrious ancestry, but to Pakeha he was known as, briefly, the skipper of a river steamer and, for most of his life, as a labourer. His interests in several blocks of land enabled him to obtain money through selling some of his holdings, but he never became prosperous. He had minimal involvement in mining at Te Aroha.
Piahana came to prominence not as a rangatira but as a drunk, who was even involved in a bar fight at Te Aroha. Despite this weakness, his high status meant that hundreds attended his splendid tangi. Unlike some other rangatira, he did not use his status to play an important role in either Maori or Pakeha society.

text: Piahana Hou: a Ngati Rahiri rangatira Piahana Hou, as the half-brother of Karauna Hou, had an illustrious ancestry, but to Pakeha he was known as, briefly, the skipper of a river steamer and, for most of his life, as a labourer. His interests in several blocks of land enabled him to obtain money through selling some of his holdings, but he never became prosperous. He had minimal involvement in mining at Te Aroha.
Piahana came to prominence not as a rangatira but as a drunk, who was even involved in a bar fight at Te Aroha. Despite this weakness, his high status meant that hundreds attended his splendid tangi. Unlike some other rangatira, he did not use his status to play an important role in either Maori or Pakeha society.

year: 2016