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CSR AUDIT OF DAV COLLEGE MANAGEMENT COMMITTEE By Alexey Tarasov, Harmanjot Mangat, Prabhjot Mehrok.

Contents
1 Introduction ..................................................................................................................................... 3 1.1 1.2 Corporate Social Responsibility................................................................................................. 3 Company Profile ....................................................................................................................... 3 Mission Statement ............................................................................................................ 4

1.2.1 2 3

Methodology ................................................................................................................................... 4 CSR Audit ......................................................................................................................................... 7 3.1 3.2 3.3 3.4 3.5 3.6 Environment ............................................................................................................................ 7 Customers ................................................................................................................................ 7 Human Resources..................................................................................................................... 8 Community .............................................................................................................................. 9 Human Rights ........................................................................................................................... 9 Business Behavior and Ethics .................................................................................................. 10 Relations with Clients, Suppliers and Sub-Contractors ..................................................... 10 Prevention of Corruption ................................................................................................ 10 Marketing Practices ........................................................................................................ 10

3.6.1 3.6.2 3.6.3 3.7 3.8

Corporate Governance and Reporting .................................................................................... 11 Stakeholder Communication .................................................................................................. 11 Staff ................................................................................................................................ 11 Customers ...................................................................................................................... 11 Government ................................................................................................................... 11 Community and Media ................................................................................................... 12

3.8.1 3.8.2 3.8.3 3.8.4 4

Results of Audit .............................................................................................................................. 12 4.1 4.2 4.3 4.4 Strengths ................................................................................................................................ 12 Weakness ............................................................................................................................... 13 Opportunities ......................................................................................................................... 13 Threats ................................................................................................................................... 14 1

Action Plan..................................................................................................................................... 14 5.1 5.2 5.3 5.4 5.5 5.6 5.7 5.8 Increase the Internal Awareness............................................................................................. 14 Compensation and Benefits .................................................................................................... 15 Green Buildings ...................................................................................................................... 15 Eco-Friendly Transportation ................................................................................................... 15 Establish CSR Committee ........................................................................................................ 15 Increase Transparency ............................................................................................................ 16 Provide Sex Education ............................................................................................................ 16 Establish Whistle Blower System ............................................................................................ 16

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References ..................................................................................................................................... 18 Appendix 1..................................................................................................................................... 21

1 Introduction
1.1 Corporate Social Responsibility
According to Gelbmann(2010) the importance of CSR has been increasingly recognized in modern enterprise. Small and medium enterprises all are featuring CSR performance, but they fail to gain competitive advantage out of it because they are unaware of the qualities of CSR. Gelbmann in his research paper mentioned two approaches of CSR: a) comprehensive scope which basically focus on Social, economic and environmental issues b) dynamic view which integrate the intangible resources such as capabilities and competencies. Other authors such as Haastrecht & Amiabel (2010) explained CSR as a balanced approach towards the concept of value . It is a weighted average of current wealth, welfare & future generations. CSR operation has been explained mostly with the views of two economists: Milton Friedman and Freeman. According to Friedman the only social responsibility of business is to generate profit. But Freeman emphasized that all stakeholders interest has to go together. According to freeman successful business is the one which is creating value for customers, suppliers, employees, communities and financiers.

1.2 Company Profile


DAV College Managing Committee (DAVCMC) is the largest Non Government Organization (NGO) with 120 years of experience in the field of education in India. DAV operates over 700 educational institutes which consists of public schools, DAV aided schools, degree and professional colleges and research institutes. Most of the DAV Institutes are ISO 9001-2008 certified (DAVCMC, 2010).

1.2.1

Mission Statement

According to DAV College Management Committee, 2010 Education for all, keeping in mind the elimination of disparities in the educational system and provision of more facilities through qualitative interventions in order to achieve this mission of quality of education for all, DAVCMC has laid some objectives which are spreading education, demote superstitions and out-dated customs like child marriage, female foeticide, dowry, gender-bias etc. and promoting individuals towards social welfare. The vision of DAVCMC is to continue to expand as a knowledge leader and content provider. The futuristic vision of DAVCMC is to expand with global relevance by use of IT to provide e-administration and e-services (DAV College Management Committee, 2010).

2 Methodology
To assess the CSR level of DAVCMC, our team conduct the CSR audit by using B Impact assessment created by certified B corporation. The B Corporation rating system has been divided mainly into five main parts which are Accountability, Employees, Consumers, Community, Environment and Beneficial Business Model 1) Accountability: Focusing in governance and transparency issues of the company, the maximum points for this section is 15 points, the governance and transparency issues of the report ask questions about company Mission, governing body and engagement of external stakeholders etc. 2) Employees: It focus on companies relationship with employees and also top understand how they treats their employees, this section contains 60 points, in which 3 sub-sections

which are Compensation & Benefits, Employee Ownership and Work Environment accounts 3) Consumers: In this section, the company will be evaluated based on Beneficial Products or Services criterion with the maximum grade of 35 points. It demonstrates the benefits which the customers of DAVCMC gained from them. 4) Community: 4 sub-sections are Suppliers with 5 points, Local with 14 points, and Diversity with 13 points and Charity with 13 points. The total grade for this section is 45 points. 5) Environment: With the maximum of 20 points, 2 sub-sections which are Facilities and Energy Usage accounts for 14 points and 6 points accordingly. Apart from the five assessment criteria s the B corporation assessment also include Beneficial Model which is further divided into four parts which are Employee Benefit Model, Consumer benefit model, Community benefit model and environment benefit model. DAVCMC has a community benefit model and it is giving benefits to underdeserved community .The corporation has also got environment benefit model. In order to do the B assessment we need lot of internal information about DAVCMC .The information was collected by: 1) Telephone interview: Phone calls has been made to DAVCMC head-office New Delhi, India, There we talked with Mr S.K. Sharma (Director Publications) and Mr A. Adlakha (Director Administration) and we explain them about B-corp. assessment required for CSR certification .From them we got the information of no. of employees and approximate revenues of DAVCMC. Besides them we called Mr. Kochar who is

Director of DAV Institute of Engineering and Technology Jalandhar and asked him about the college engagement with local community and the social activities which the college is doing. Calls have also been made to Professor of same college Mr. Ramandeep Johal, Mrs Geetika Jasuja Principal at DAV Public School Kurukshetra, Mrs Deepa Chawla teacher at DAV Public School Kurkshetra and Mr. Bhupinder Singh phone operator at DAV Public School. They provide us information about institute working conditions, pay scale, health benefits, bonuses, remuneration and other paid/unpaid holiday etc. Mr Kochar helped us in filling the answers to B assessment. In order to assist him to answer the survey, we explained the content, meaning and purpose of each section and the questions if necessary. After completion of survey we as auditors and he as representative to DAVCMC got the result which is shown in appendix 1. 2) Email: In order to answer questions of the survey we email Mr Kochar B-Corporation link for approval. 3) DAVCMC website: we got lot of information which includes company mission and vision statement, corporation coming event regarding CSR, practices they are following to diminish the social evils from society and also corporation s beliefs regarding environment from company website. 4) School and college website: DAVIET Jalandhar and DAV Public School Kurkshetra website about the local community activities they participate in.

3 CSR Audit
According to phone calls to different personals, DAVCMC is involved in several pillars concerning CSR activities which are explained as below:

3.1 Environment
The DAV schools take special care to make the students aware and conscious of their environment. DAV is one of the top leaders in planting the trees across the India. Every year all institutes of DAV celebrate World Environment day by planting trees in schools, colleges and neighborhood, besides the students they also encourage society to aware of pollution problems which is threat to environment. The paper in schools is used carefully and is recycled (DAV College Management Committee, 2010). DAV Schools are carrying out various campaigns like van-mahotsav (forest day), say no to poly-bags, say no to fire-crackers. They regularly carry out water conservation and anti-pollution campaigns etc. (DAV College Management Committee, 2010)

3.2 Customers
The customers of DAVCMC are in wide range of age groups from little children to people of any age who are willing to get education or want their children to be educated. DAVCMC is coping up with National Literacy Mission of India they are taking education to people if they cannot come to schools. DAVCMC has some social welfare schemes which include educating students from weaker sections of society like tribal people, mentally challenged children of society (DAV College Management Committee, 2010). Parents of the students of schools are customers of the institution too who participate in the volunteer work initiated by DAVCMC during the

national crisis like earthquakes, tsunami and wars by donating cash and other volunteer services (DAV College Management Committee, 2010).

3.3 Human Resources


Adlakha, A., 2011 in a phone conversation stated that there are approximately 70,000 people working in all the institutions under DAVCMC with an annual budget of about $45,000,000 (Rs. 2 Billion). According to Chawla, D., 2011 in a phone conversation stated that the work environment of the school is extraordinary and she can reach her full potential. The job is defined by some rules but she has freedom to experiment new ideas to teach which are appreciated by the administration of the school. Singh, B., 2011 in a phone conversation said that he gets a lot of benefits even being a peon in the school. He said even though it is one of the lowest positions in the school he gets travel allowance, daily allowance etc. he said he is directed to switch off extra lights and fans in the school when they are not in use. Employees are appreciated for participating in social activities like promoting some good cause or bringing poor children to school who cannot afford education as stated by Jasuja, G., 2011 who is principal in DAV Public School Kurukshetra. According to DAV College Management Committee, 2010 teachers and lecturers in various institutes are sent for in job training to improve their skills which helps in developing their career. They are also encouraged to get Ph.D.s during assisting other professors (DAV Engineering College, 2011). Post retirement employees get provident funds with some additional funds from DAVCMC (DAV College Management Committee, 2010). There are no pension plans offered from DAVCMC but employees invest in private pension plans (Chawla, D., 2011). Female employees get 2 months of paid maternity leave and can get up to 2 months of paid sick leave but there is no paternity leave (DAV College

Management Committee, 2010). There is no provision for home allowance for temporary employees which is drawback for employees from other cities or states (Adlakha, A., 2011). 3.4 Community According to DAV College Management Committee, 2010 DAVCMC is acting towards community development. DAVCMC provide education to women and suppressed communities. DAVCMC also opened Ashrams (Shelter homes), orphanages, and research institutes and are promoting adult education. DAVCMC also does favor to community by hiring staff from local communities. DAVCMC also pay for marriages of poor women. DAVCMC with the help of RedCross society organizes blood camps and does other social work by providing free education to children who cannot afford education. DAVCMC provide free food on special occasions. DAVCMC also gives away tricycles to handicap people in the community. DAVCMC has a special quota for women and candidates from underprivileged communities in their job selection process (DAV College Management Committee, 2010). Some institutions organize workshops to educate parents on parenting techniques and other community welfare workshops are arranged (DAV Public School Kurukshetra, 2011).

3.5 Human Rights


According to DAV College Management Committee, 2010 employees working in DAV institutes have freedom of association they have DAV Employees association and have rights for collective bargain. According to Singh,B., 2011 during the phone conversation stated that there is no forced labor or child labor in the school payroll but some children work in canteens in the school which are under independent contractors it means some institutions are infringing some human rights. Teachers can be force students to do anything against their will if any teacher
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does anything like beating or harsh punishment to force students to do something against their will then they are subjected to criminal offence and actions are taken accordingly. Any teacher found guilty in such an offence is boycotted from DAVCMC (Adlakha, A. 2011).

3.6 Business Behavior and Ethics


3.6.1 Relations with Clients, Suppliers and Sub-Contractors

According to Jasuja, G., 2011 the suppliers are from local community and DAV institutes have very good reputation in community so the suppliers provide discounts to the schools for bulk order and good-will discounts as all the payments are done prior to time. Parents of the students in the school are invited to the school on last Saturday of every month for their feedbacks and which are evaluated and worked upon. Students have direct access to the principal s office if they have any complaints or any concerns regarding the operation of the school.
3.6.2 Prevention of Corruption According to Adlakha, A., 2011 if any employee is caught in any activity related to corruption his/her employment is suspended till charges against the employee are proved if the employee is found guilty is terminated from his position right when the charges are proved. DAVCMC is very strict for preventing corruption. Adlakha, A., 2011 also stated the reason these employees are paid well is that they don t work against the ethics of humanity. 3.6.3 Marketing Practices DAVCMC does not have any particular marketing strategies the main means of marketing for DAV institutes is through word of mouth as it is a very old institution and well know in Indian history (Jasuja, G., 2011). Sharma, S., 2011 Go see our website, alumini of DAV institutes includes 2 Vice-Presidents of

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India, 3 Prime Ministers of India, 1 Nobel Prize winner is our marketing we don t need to do any marketing.

3.7 Corporate Governance and Reporting


Board of Directors of DAVCMC consists of 40 members that include President, Vice Presidents, Secretaries and Hony. Treasures. Annual audits are commenced to measure employee performance and individual institutional performance which are then published in circulation to the institutes and are accessible to employees. Financial reports are not published so they lack the factor of transparency in terms of finance (DAV College Management Committee, 2010).

3.8 Stakeholder Communication


3.8.1 Staff

There is open communication with staff in the institution as they are accessed on the basis of the performance of their students which results in appreciation or counseling sessions for the improvement of their performance. Other employees have direct access to the heads of the institutions for any concerns.
3.8.2 Customers

The communication between customers i.e. students and their parents and company are very open they can communicate either in written form through applications or daily dairies of students or in oral form through telephones or any other legitimate means as Jasuja, G., 2011 suggested.
3.8.3 Government

The communication between institutions and government is an open communication as many institutions of DAVCMC are government aided so the communication is an important part. The

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communication between government and institution is through publication of documents to each other (Adlakha, A., 2011).
3.8.4 Community and Media

According to Adlakha, A., 2011 the communication with media is filtered every news is given to media but sometimes some information is kept confidential. Adlkha, A., 2011 also stated that if any event or any incident related to community happens is reported to media which further reports that to community or other stakeholders. According to Jasuja, G., 2011 if any employees of any institution of DAV is found involved in any criminal or unethical practices are communicated to community through media and also the actions against the employee are communicated. Jasuja, G., 2011 added that the communication with community and media is fairly transparent.

4 Results of Audit
In the following section, the B-lab audit result for DAVCMC will be discussed. All the strengths and weaknesses of the company will be analyzed in order to provide recommendations for future improvement. The B report result certification is included in Appendix 1.

4.1 Strengths
DAVCMC did well in Community involvement, corporate governance, and environment; by conducting interviews with various employees of different DAV institutes it was found that they are strongly satisfied with DAVCMC. DAVCMC did very well in promoting awareness of environment; almost all DAV campuses have lush green gardens and they also provide transportation facility for staff and students at very reasonable prices that encourages the use
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of this facility instead of bringing their own vehicles also the company has engaged with its suppliers, business partners, or customers to lessen the negative influences on the environment. Community involvement is considered as strongest strength of DAVCMC as already discussed in Community involvement section.

4.2 Weakness
The B-corporation assessment shows that DAVCMC has some weaknesses because the DAVCMC scores less in some areas such as transparency, work environment and energy usage. For the transparency, the DAVCMC does not have a formal procedure to share its financial information. In compensation and benefits DAVCMC don t provide any major premiums for health insurances for employees and neither for their families. The pension funds are only partial funded as already explained in human resource section. Employees are not shareholders in the company. Working environment of major DAV Institutes is not up to high standards as during power cuts they sometimes lack to provide power backup also there are only few premises which provide facilities for disabled .Company gained very less score in energy usage as most of the premises are constructed more than 40 years ago and they are still using old fans, lightening and air conditioning. 4.3 Opportunities

The assessment results show that there are various areas in which there is need of improvement for DAVCMC. DAVCMC can have formal and written policies in various areas such as: a) Policy on how to facilitate the financial information sharing.

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b) Construct new buildings according to Green building concept and LEED(Leadership in energy and environmental design) In addition, the company should provide more benefit to its employees such as health insurance, more paid day-off for the volunteer work which employees did. Also company should improve Energy backup system by installing Renewable energy resources equipments. Besides that in order to assist disabled persons, DAVCMC should install elevators and automatic doors in their premises. 4.4 Threats

The major threat to DAVCMC is Government owned school and colleges as the government provide their employees with pension plans, health benefits not only for them but also for their families. Also recently in India central Government revised the pay scales of their employees so in order to capitalize their employees DAVCMC also has to revise their pay scales ,which in turn increases their expenses. The other threat to DAVCMC is boom in the market of Private schools and colleges which are providing their clients and employees world class facilities and modern education.

5 Action Plan
5.1 Increase the Internal Awareness
In order to have sustainable development, DAVCMC should increase the internal awareness among employees, customers and management regarding CSR. It can organize trainings, seminars and expert lecturers for employees and students on sustainable development and how to implement. DAVCMC should also introduce environmental and social responsibilities as
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mandatory subject for student s .To increase awareness, DAVCMC should also build CSR responsibilities into employees job performance evaluation, Appreciate employees and students with awards and benefits, recruit people who have voluntary experiences.

5.2 Compensation and Benefits


DAVCMC should provide employees with paid day off for the time they spend volunteering for the institutions in social activities. They should also provide paternity leaves to their employees that create ease for taking care for their family and their children. Apart from compensation DAVCMC should provide health benefits and housing for employees or assistance in residential planning to the employees who came from other cities or states. DAVCMC should tie up with banks in order to assist their employees with mortgages and loans.

5.3 Green Buildings


They should modify their old buildings to meet the requirements of Green Building concept as they are very old buildings. They can change their existing electric appliances with energy efficient appliances such as LED lighting, CFC free air conditioners. They should install automatic sensors in buildings to save energy, water saving appliances in washrooms, big windows and insulated walls and windows.

5.4 Eco-Friendly Transportation


Instead of using diesel engines in their buses they should use hybrid buses which run on CNG this will benefit environment as it will reduce the CO2 emission and other harmful gases.

5.5 Establish CSR Committee


DAVCMC should establish a CSR committee at corporate level which will consists of representatives from management who can act as chairman and participants from different

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institutes who can be considered as internal auditors. An external consultant should also be hired for this committee. This committee will examine the performance of different institutes related to CSR. This committee will take these issues to the management. CSR committee should commence a CSR audit every year and should publish the report to all stakeholders.

5.6 Increase Transparency


DAVCMC should increase transparency by publishing the financial reports and other audit reports to every stakeholder.

5.7 Provide Sex Education


DAVCMC should provide sex education in school curriculum to increase AIDS awareness in students as according to UNICEF, 2010 in 2009 the estimated population living with AIDS in India was 28 million so AIDS awareness is important in future generations.

5.8 Establish Whistle Blower System


Organizations including governments and professional associations, are concerned with finding ways to encourage and allow employees to report acts, both of omission as well as commission of corporate malfeasance or wrongdoing which is called as whistle blowing ( Moody et al.,pp:90,2008),Other Authors such as Arnold & Ponemon pp: 2 (1991)defined Whistle blowing as disclosure by organizational members of illegal, immoral, or illegitimate practices under the control of their employees, to persons or organizations that may be able to effect action. According to our research, DAVCMC hasn t established a whistleblower system yet. This system will resolve issues related to CSR from employees and customers perspective. It will consist of anonymous emails and boxes. By this system DAVCMC will able to find out the problems and then they can do corrective and preventive measures in order to resolve the

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problems. In terms of this system, DAVCMC can conduct training and development about the whistleblower system so that management and employees understand and are familiar with its procedures.

All these actions may increase the short run cost but it will help save the long run cost and add to company revenues by achieving 100 % employee & customer satisfaction.

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6 References
1. Adlakha, A., 2011. Director Administration DAVCMC, (Telephonic Communication, 10 June, 2011).

2. Arnold, D. and Ponemon, L., 1991, Internal Auditors Perceptions of Whistle-Blowing and the Influence of Moral Reasoning: An Experiment, Journal of Practice and Theory, 10(2), pp. 1- 16.

3. B Lab, 2011, Certified B Corporation, [Internet] Available at: <http://www.bcorporation.net> [Accessed on 8+- June, 2011]

4. Chawla, D., 2011. Teacher DAV Public School Kurukshetra, (Telephonic Communication, 13 June, 2011).

5. DAV College Managing Committee, 2010, DAV College Managing Committee, [Internet] Available at: <http://davcmc.net.in/index.html> [Accessed on 10 June, 2011]

6. DAV Institute of Engineering and Technology Jalandhar, 2008, DAV Institute of Engineering and Technology [Internet] Available at: <http://davietjal.org> [Accessed on 10 June, 2011

7. DAV Public School Kurukshetra, year-unknown, DAV Public School, Kurkshetra [Internet] Available at: <http://www.davkurukshetra.org/home.do> [Accessed on 10 June, 2011]

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8. Friedman, M. (2007). `The Social Responsibility of Business Is to Increase Its Profits'. In W. C. Zimmerli, M. Holzinger, & K. Richter (eds.), Corporate Ethics and Corporate Governance, chap. 14, pp. 173-178. Springer Berlin Heidelberg, Berlin, Heidelberg.

9. Gelbman, U., 2010, Establishing Strategic CSR in SMEs: an Austrian CSR Quality Seal to Substantiate the Strategic CSR Performance, Sustainable Development, 18, pp. 9098.

10. Haastrecht, B. and Amiabel, M., 2010, The Strategic Importance of Corporate Social Engagement, Journal of Sponsorship, 3(3), pp. 260-264.

11. Jasuja, G., 2011. Principal DAV Public School Kurukshetra, (Telephonic Communication, 13 June, 2011).

12. Johal, R., 2011. Assistant Professor DAV Institute of Engineering and Technology Jalandhar, (Telephonic Communication, 8 June, 2011).

13. Kochar, C., 2011. Director DAV Institute of Engineering and Technology Jalandhar, (Telephonic Communication, 13 June, 2011).

14. Moody, J., Bebensee, M. and Carter, H., 2008, Whistle-Blowers and Technology: A Cross-Cultural Framework for Effective Corporate Malfeasance Reporting Systems, Journal of International Business Research, 7(2) pp. 89-105.

15. Sharman, S., 2011. Director Publications DAVCMC, (Telephonic Personal communication, 10 June, 2011).
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16. Singh, B., 2011. Receptionist DAV Public School Kurukshetra, (Telephonic Communication, 13 June, 2011).

17. UNICEF, 2010, India Statistics, [Internet] Available at: <http://www.unicef.org/infobycountry/india_statistics.html> [Accessed on 13 June, 2011]

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7 Appendix 1

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