Dec 3, 2007

Social Stock Excange (SSE) to promote Corporate Social Responsibility (CSR)

“Increase shareholders value” is one line that I have seen in all the presentations by the top management. Wealth creation for those who have invested in the company is definitely an important task to be achieved. And stock exchanges like BSE, NSE are doing a great job in linking the companies performance to the market forces.

However I feel objective of any commercial activity should result into development society and mankind.

Urgent need to have Social Stock Exchange (SSE) on which various companies to be listed on the basis of social responsibility performance. Since all the companies are using the resources from the society they must work towards giving back a part of the wealth as this will result in the welfare of the society.

Listing of various companies on the SSE to be made mandatory and points to be given on the basis of various parameters. Identifying and allocating points to these parameters should be left to an expert committee. Example :

1) Employment is getting generated due to commercial activity and this should qualify an organization earn points on the Social Stock Exchange (SSE). Say, companies will earn One point on SSE for every 500 employees on company’s payroll.
2) Likewise nature of the business should make them eligible to earn few points like Dr Reddy Lab to be allocated a 50 points for its efforts in developing the drugs for the treatment of Diabetics. At the same time organization engaged in Tobacco or liquor business get minus 50 points on SSE. …. so on

This Social Stock exchange to be aggressively promoted. And Two prong strategy will work:

Strategy 1:Government should encourage the companies to score High of the SSE by formation of Corporate Sabha (other two being Lok sabha & Rajya sabha) . Member ship to these should be on the basis rating on this social Index . Undoubtedly Ratan Tata will chair this corporate sabha they have done massive social work keeping low decimal level .

Strategy 2: A brilliant campaign to be run by all the media companies together. This campaign should create a perception ( which is a reality ) among the common man that companies high on SSE are of different class.

Such initiatives will shift the attention of corporate from wealth creation to wealth distribution