Mrs. Bhagyam Ramani, Independent Director at: L&T Hydrocarbon Engineering, Capri Global Capital Ltd, Capri Global Housing Finance Pvt Ltd, Choice International Ltd, Saurashtra Cement Ltd, Gujarat Sidhee Cement Limited, Industrial Investment Trust , IDBI Federal Life Insurance, Lloyd Metal and Energy Ltd.
Mrs. Bhagyam Ramani is an Independent Director with immense experience in the General Insurance sector. She is the Ex-Director and GM of General Insurance Corporation of India (GIC Re). She started off as a Direct Recruit Officer in 1976 and has worked and excelled in various departments. She became the General Manager in 2005, and thereafter Director on the Board of GIC Re in 2009. She retired in January 2012.
During her tenure, she has served on various committees like being a Trustee on the PF committee of the Tariff Advisory Board; Member on Education Board of Insurance Institute of India; Working Group on Investment Committee of IRDA; Investment Committee of Agricultural Insurance Company Ltd and GIC Re and Audit Committee of L&T, NSE, IDBI trusteeship Ltd, and Agricultural Insurance Company Ltd. She represented GIC Re on the boards of Larsen & Toubro Ltd., National Stock Exchange of India, IDBI trusteeship Services Ltd., Milestone Capital Advisors Ltd. and Agricultural Insurance Company Ltd.
She is at present on the boards of the following companies as an Independent Director: L&T Hydrocarbon Engineering, Capri Global Capital Ltd, Capri Global Housing Finance Pvt Ltd, Choice International Ltd, Saurashtra Cement Ltd, Gujarat Sidhee Cement Limited, Industrial Investment Trust , IDBI Federal Life Insurance, Lloyd Metal and Energy Ltd. She is also on the CSR committee of L&T Hydro Carbon Engineering and Capri Global Capital Ltd.
Mrs Ramani is a Post Graduate in Economics (Honours) from Bombay University with specialization in Industrial and Monetary Economics and, a visiting faculty at the National Insurance Academy, Pune.
Mrs Bhagyam Ramani speaks on the role that Independent Directors can play in CSR and spells out the need for strategic CSR.
Q1) what is the overall perspective that an Independent Director can bring to the CSR initiatives of a company?
Ans: An Independent director can bring about a wholly different perspective to CSR initiatives of a company. He\she can bring about an independent judgement to bear on the deliberations that improve both the profitability of the company [by reducing cost] and benefit society. In other words an Independent Director in the CSR committee will be inclined to support initiatives that would not merely focus on social interest but as an integrated approach in which CSR is perceived as a key driver of firm innovation and growth.
Q2) You are on the CSR committee of two companies – L&T Hydrocarbon Engineering & Capriglobal which are in entirely different lines of businesses. How different is it to do CSR & Sustainability for two such companies? What are the different sets of priorities for the two companies?
Ans: The thrust area of CSR activity will differ from company to company depending upon the sector in which the company operates. The priorities for a company in the finance sector are vastly different from that of a company in the engineering sphere. For long term sustainability companies have to create and implement CSR strategies aligned with business objectives. In other words strategic CSR which is good for business and society and it will vary from sector to sector.
Q3) The Companies Act 2013 has also specified under Schedule VII the activities for which CSR funds can be spent. Is this restrictive and does it impede a company’s ability to do social good?
Ans : Schedule VII of the Companies act 2013 is fairly exhaustive. It is anyway too early to judge the act without any empirical data .Any company desirous of doing social good can always do so outside of CSR.
Q4) Should CSR be used for purely doing good or can it be leveraged strategically? Ie should the activity be leveraged for benefiting the company apart from society?
Ans: .CSR can be used for purely doing social good or leveraged strategically. If the former course is followed it increases cost and is not sustainable unless all the companies in the industry follow suit. Strategic CSR becomes critical for both maintaining and increasing shareholder value and doing good at the same time. In other words strategic CSR is good for business and society.
Q5) India is the first country in the world to introduce a mandatory law for CSR spending. Is this the right way to go?
Ans: I do not see anything wrong in introducing a mandatory law for CSR spending especially in the Indian context
Q6) Most Indian companies have not met the targeted CSR spend of 2% of the average net profits of the preceding three years. What do you think is the reason for this? Is this likely to change going forward?
Ans: Financial year 15 was the first year of compliance of CSR provisions for companies. Firms were evaluating various CSR activities. Besides companies took time to set up an administrative structure to undertake CSR initiatives.
Q7) Do you have any suggestions in terms of how the law can be improved upon?
Ans: Too early to think in terms of improving the law. However the criterion of Rs 5 crore of the average net profits of the preceding three years can be increased and a strong monitoring mechanism should be put in place to achieve the desired results.