Corporate Social Responsibility

○○○○○○○○○○○○○○○ ○○○○○○○○○○○○○○○ Corporate Social Responsibility What exactly does it mean? ○○○○○○ considerably lessen the risk of CSR being jettisoned in the event ○○○○○○○○○○○○○○○○ of a change in the economic environment. ‘Corporate Social Responsibility’ is now a popular, frequently used slogan. ‘Social Responsibility’ can be defined as an ○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○ Corporate Governance and Business Integrity ○○○○○○○○○○○○○○○○○○○○○○○○○○○○ instance or situation, where those with the extra resources, privileges and strengths share these with the less fortunate At HNB, we have a strong and continuing commitment to within the same community – a habit that has been practised the highest standards of corporate governance. Corporate for centuries. Lord Buddha, shortly after attaining governance is usually defined as a system by which enlightenment visited Sri Lanka – long before the advent of companies are directed and controlled from within. This, in Buddhism to the country – to settle a dispute between two recent times, has been the subject of an ever-increasing focus feuding groups – a classic display of Social Responsibility. and external demands made on public companies to conform Jesus Christ put it in one succinct sentence that covered to a set of rules and regulations – sometimes sets of them – every facet of Social Responsibility:–“Love thy neighbour as to give businesses and governments a conscience and help thyself.” Mahatma Gandhi, with no political ambitions in mind, spread prosperity in a world where the distribution of wealth strove tirelessly towards fulfilling his mission:”‘Removing is, to say the least, uneven. Our own systems enable us to tears from the teeming millions’’– to end the discrimination be socially and morally responsible for all actions we take of colonial rule towards millions of poor Indians. internally and externally to touch all people directly or indirectly. Today, many corporates have realized the importance of sharing with the have-nots. This is of utmost relevance to Sri Today, the concept of corporate governance extends to Lanka where more than 70% are reportedly below the address not only shareholders’ expectations about effective poverty line. They need sympathy and more importantly, employment of capital to provide returns, but broader material assistance to raise their living standards. Corporate perspectives on how companies should operate. HNB has Social Responsibility has now become a prerequisite for always abided by the credo that we continue to maintain the recognition by the community. highest standards in business ethics, sincerity, truthfulness, the keeping of promises and being transparently accountable However, the focus on what ‘Corporate Social Responsibility’ to stakeholders. It is indeed a pleasure to be able to support actually stands for is increasing. The World Business Council our claim of adherence, through the numerous awards our for Sustainable Development, in its publication ‘Making Good Annual Reports have garnered year after year at home and Business Sense’’by Lord Holme and Richard Watts used this abroad – we have won the South Asia Federation of description: “Corporate Social Responsibility is the continuing Accountants Award (SAFA) many times – and in fact, during commitment by business to behave ethically and contribute to the late ‘90s, for three successive years. economic development while improving the quality of life of the workforce and their families as well as of the local A heart in our core business! ○○○○○○○○○○○○○○○○○ community and society at large”. This, briefly, means that CSR is all about how companies manage business processes to Companies cannot be substitutes for governments. They produce a comprehensively positive impact on society. Overall, cannot direct how countries should be governed. But they CSR is more than an exercise in philanthropy. Profits made by can lead by example and bring considerable influence to bear companies are unhindered – except by taxation. They donate a through good practices and it is imperative for each company certain share to charitable causes – and it is seen as tainting to demonstrate it is operating responsibly with customer the act for a company to receive any benefit from its largesse. benefits that improve with time. HNB operates throughout For some, much more is focused on operating the core business the length and breadth of this country and we are only too in a socially responsible way, complemented by investment in well aware that, since financial needs vary to a considerable communities for solid business case reasons. This, from one degree, the role involves improving life – across the board – view-point is more sustainable since CSR becomes an integral with a range of products that will cater to the needs of people part of wealth creation, which, with proper management, will from all walks of life. Our ‘Shanthi Home Loans’ for instance not only enhance competitiveness of business, but also have a built-in flexibility that can accommodate the maximise the value of wealth creation to society – and construction of the most humble home. HNB was the first ○○○○○○○○○○○○○○○ ○○○○○○○○○○○○○○○ Corporate Social Responsibility ○○○○○○ private commercial bank to introduce Pawning, bringing a venture between the Bank and the Rotary Club of Wattala new dimension, the highest ethics and even technology to with the construction of badly needed toilet facilities. HNB the industry. Pathum Vimana continues to be instrumental in donated an air-conditioning unit to Dambulla Hospital, thus creating national wealth through an increased savings base ○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○ fulfilling another crying need. The Bank has also linked with that is being utilized by the Bank, both meaningfully and beneficially. Singithi’– the Minors’ Savings Account, was introduced to not only inculcate the savings habit in children, but as importantly to also familiarize them with the banking habit. Savings in a Singithi account are further facilitated by Savings Centres in over 100 schools at present. At grassroots level ○○○○○○○○○○○○ HNB, as far back as 1989, inaugurated a revolutionary idea called ‘Gami Pubuduwa’ (Village Reawakening) scheme. The Mr. Rienzie Wijetilleke, Chairman presents a cheque core of the concept was the redefinition of micro financing to a recipient of one of three houses (at Suriyawewa, for development among people below the poverty line. Under Kiribathgoda and Kurunegala) HNB is helping to construct. this scheme, financing apart, the bank also provides guidance and advice towards increasing productivity and counsel the National Housing Development Authority (NHDA), against risks – and even failure. For future embellishment of supporting the programme of providing one home each to assistance, recipients are assisted with the maintenance of poor families in every district. Contributions were made to records. Since its inception, the Scheme has created over the Bar Association of Sri Lanka for the National Law 50,000 direct employment opportunities and indirect Conference, the Sri Lanka Medical Association for academic employment for over 500,000 people. services and the International Asia Pacific Regional Conference held in Sri Lanka on Alzheimer’s disease. In Commitment to CSR at work addition, HNB sponsored a publication of the Institute of Road ○○○○○○○○○○○○○○○○○○ Association entitled ‘Driving challenges and Essential Skills’ HNB regards CSR in the broader perspective. The and was also involved in the collection of funds and the comprehensive set of policies, practices and programmes organizing of a charity dinner at the Taj Samudra Hotel by the are not only geared for the creation and distribution of wealth National Stroke Association. among the community served, but also among the bank’s employees. The Employee Share Option Plan (ESOP) is in The Bank has also made a firm commitment to a project of the process of being implemented and this key wealth the Ministry of Agriculture, under which three tanks in distribution programme will be based on a performance- Gampaha, Tissamaharama and Anuradhapura will be oriented formula. rehabilitated. Giving back to society… The recent devastation by the tsunami that saw, not only Sri ○○○○○○○○○○○○○ Lankans but also the world come forward voluntarily to assist HNB’s CSR activities include study tours abroad for farmers the people, the tremendous goodwill and spontaneous from the front-line farming districts. In 1989, eight farmers generosity by numerous countries, institutions, corporates visited China for a first hand view of the latest technology, and individuals show clearly that Corporate Social while more recently, thirteen others visited research Responsibility has come to stay. institutions, fertilizer plants and more in India. Other activities include the construction of three houses for needy families HNB’s ideal is to have a sustainable programme to fulfil in Suriyawewa, Kiribathgoda and Kurunegala. A settlement Corporate Social Responsibility on a continuing basis for the of 800 families in Muthurajawela benefited from a joint greater benefit of the larger community. ○○○○○○○○○○○○ ○○○○○○○○○○○○○○○○○○○ ○○○○○○○ Corporate Governance ○○○○○○ Importance of Corporate Governance For the year ended 31st December 2004, HNB complied with ○○○○○○○○○○○○○○○○○○○○○○○○○ the provisions set out therein except for the appointment of The Board of Directors and the Management of HNB are ○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○

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