Journal of Accounting, Auditing and Taxation Vol. 4(1), pp. 064-070, July, 2020. © www.premierpublishers.org. ISSN: 0799-673X

Research Article

Social Audit in : Evidence from Ltd. Dr. Pradip Kumar Das J. K. College, Purulia E-mail address: [email protected] Contact No.: +91 9475815209/7362965792

Corporate social responsibility is contemplated as overarching strategy integrated into business operation, value-added chain and decision making approach across the corporate world. Infosys in ITC sector harmonizes with corporate ethics in the Indian corporate domain. This paper basically concentrates on how the activities of Infosys, the selected company endorses its responsibility towards society veraciously and how it precipitates its sustainable headway. The study is descriptive in nature and mobilizes mainly secondary data for the purpose. The results proffer that corporate social responsibility is a device of self-appraisal for the company in case of social audit which eventually emanates its sustainable survivability.

Keywords: Corporate social responsibility, Ethics, Social audit, Stakeholders, ITC.

INTRODUCTION

Companies are distinguished for their impression on Fenn, 1973). In fact, social audit acknowledges the right of society as a whole; stakeholders and the environment in all having interest in a corporate to information concerning particular. For companies long period sustainability with its social impact and ethical performance to furnish profit making or wealth building, it is analogously cardinal accounts at regular intervals. Entire social audit is a that they should accept their obligation to be socially climactic methodology of reassignment of power based on responsible and work for the welfare of the society. As per substantiation and fact. It analyzes, measures and reports the stewardship principle for having utilized the resources of an organization’s social and ethical performance by of the society, it is the ethical responsibility of the company scrutinizing its non-financial activities that directly or to return something well-being to the society and should indirectly impact stakeholders (Ghonkrokta & Lather, conform various social needs. Recently, corporate 2007). Social audit is crucial for internal examination to governance and corporate social responsibility (CSR) discern how a particular business concerns the society. A have welcomed substantial receptivity. Investors prefer to company cannot just survive by creating value addition to invest in only those companies which accord towards CSR its shareholders and delivering quality products or services activities. In order to clinch stakeholders attention, to its customers. To create, improve and maintain good corporate have instituted liberating their CSR reports public relationship and for long-term sustainability, a pursuing their own code of conduct. So there is a company should mandatorily meet both social and covetousness to ratify the authenticity of these CSR environmental standards. Good public image is the key reports and mantra for the success of any company. Social audit dissect how efficaciously the corporate are honoring their encompasses a wide range of activities and serves social and ethical responsibilities pragmatically multiple purposes like satisfying the corporate conscience, (Vicario,2015). improving social programmes, enhancing public relations and increasing the credibility of the firm (Caroll & Beiler, 1975). Social audit appraises whether corporate SOCIAL AUDIT CONCEPT desideratum, philosophy, policy, approach, etc. adheres to the social values and principles. It also divulges that a Social audit is a commitment to systematic assessment of company has demonstrated its ineffaceable social and and reporting on some meaningful, definable domain of environmental data congruously. Social audit provides the company’s activities that have social impact (Bauer & objective, accurate and comprehensive information about an enterprise’s social performance (Clark C. Abat, 1974).

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Infosys – An Introduction ethical responsibility neither to put the lives of people in misery nor to exploit its employees. The reality is how a Infosys Limited, an Indian Information Technology company makes its money (Chaitanya et al., 2018). An Company (ITC) headquartered in Bengaluru, , exploratory research on tourism and hotel companies in India was established in 1981 with an initial investment of Morocco revealed that companies are aware of social US $250 that provides global business consulting and auditing and they consider it as an effective technique to information technology services. Infosys helps clients in develop strong human resource management policy in about 45 countries to devise and executes different hotel industry (Elmousadik & Elkandoussi, 2016). A study strategies for their digital transformation. Infosys helps to focus the social inspection for CSR activities of banking businesses to rejuvenate and ameliorate prevalent sector in Bangladesh showed that although the financial conditions so that their business can achieve higher sector specifically banks are big contributors in the country dexterity and stay relevant according to for CSR activities, stakeholders are unaware of CSR circumstances. This worldwide appreciated corporation contribution due to poor reporting. Social audit can face provides superb business solutions utilizing technology the challenges like lack of clarity, number of investment in extricated by distinguished people. FICO score (credit environment, etc. by creating single platform for the score) of Infosys is A− (rating by Standard and Poor). stakeholders, and by comparing CSR commitments with Infosys' leading position captioned as an Asian invasion in the actual performance of the banks (Islam, 2015). Social the rankings (Forbes India Magazine, 2020). Infosys has inspecting as a means of surveying and providing details been graded 3rd on the Forbes list of “The World’s Best regarding corporate social and natural execution could be Regarded Companies for 2019” based on its solidity, connected to manufacturers’ trusts, recognize the honesty, etiquette, justness to its employees and the responsibility and advance participation by the partners accomplishment of its products and services which and enterprises (Zhang,2006). Social audit of companies instantiates the company’s culinary masterpiece, the reflects its overall performance (Rahim, 2014). A social veneration it enkindles amongst its stakeholders and also audit for analyzing the contribution and effectiveness of the illuminates the commitment of universal technological poverty alleviation program undertaken by the Indian services (Forbes American Business Magazine, 2020). Government revealed that too much government interference fails to achieve the goal of such programs, however, active involvement of the communities especially LITERATURE REVIEW poor led to better attainment of goal of such schemes; hence the need for decentralized schemes strengthening the Panchayat Raj Institution is necessary for its success Good CSR reports behold whether the firms sporadically (CAK, 2007). Social audit accountability and transparency cater to the needs of stakeholders or not (Vicario, 2016). Social audit helps an organization assess and evaluate its of seventeen (17) out of twenty two (22) Gram Panchayats benefits in the forms of social, economic and in Andhra Pradesh under the scheme of ‘Mahatma Gandhi National Rural Employment Guarantee Act’ reported environmental as a tool for measuring the magnitude that misutilization of funds (Sushmita, 2013). Social audit an organization meets its objectives and shares values it has committed. Social audit analyzes, measures and also scheme environment can be created with companies if a cooperative relationship is maintained (Chiang, 2018). reports an organization’s social and ethical performances by scrutinizing the non-financial events having direct or Theory and practice are to be pursued together to maintain reputation of CSR of company. It should not be narrowed indirect impact on shareholders (Ghonkrokta & Lather, to an aesthetic discourse; ethical foundation must also be 2007). CSR creates nexus of the businesses towards reckoned. society. Business should use resources beneficial to society by taking into consideration the participation and welfare of the society at large (Jamie, 2003). Specific STATEMENT OF THE PROBLEM stakeholders like employees and customers who are indispensable for the success of a business are A corporate as a good corporate citizen which uses contemplated to consummate their needs and satisfaction stakeholders, environment and exiguous resources of (Dwivedi, 2010). The focus is specifically towards social society for its smooth running has an ethical responsibility audit done by the companies to investigate the quality and measure the CSR activities. At present, stakeholders to return the benefits back to society in terms of protecting wholeheartedly expect that businesses think about the the environment and exiguous resources, treating the employees in the right manner, delivering quality products, problems faced by society like unemployment, poverty, and for the well-being of the economy and society at large. infrastructure, etc. (Peter Kok, 2001). Identification of It has become almost difficult for a company to persist proper means of measurement in terms of social without the CSR activities as stakeholders favor those performance has been much developed which also has led to controversial opinions concerning the suitable ways of companies which are ethically involved in such activities. measurement (Carroll & Boiler, 1975). Companies have So there is a need to understand how the CSR activities

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and social auditing can help a company to have long-term Dimensions of CSR and INFOSYS’S initiatives sustainability. 1) CSR Committee: According to the guidelines of the

Ministry of Corporate Affairs, Schedule VII of Section 135 OBJECTIVE OF THE STUDY of the Companies Act, 2013, Infosys has constituted a Board-level CSR Committee to monitor the The basic objective of the study is to examine how the top implementation of its CSR policy from time to time. Indian IT sector company has precipitated to the society and how this has fostered in its long-term sustainability. 2) Healthcare: In collaboration with the National Cancer Institute (NCI) of the All India Institute of Medical Sciences (AIIMS), Jhajjar, Haryana, Infosys Foundation has built MATERIALS AND METHODS shelters for the underprivileged cancer patients and their families. Infosys CSR team envisages future where quality This study is descriptive in nature and has used mostly health care services are considered hygiene factor, not secondary data like books, journals, websites, etc. The luxury. The Foundation along with Sankara Netralaya study confines to the period of 6 years i.e. from 2015 to provides cash related help to the monetarily backward 2020 as the data beyond this period is not systematically groups of society. This restorative center renders free accessible. Hence, the conclusion drawn from the study is medicinal strategies and leads getting ready projects in also limited to this period. Out of 10 sample companies in collection of fields related with ophthalmology. At each India from different sectors, Infosys, a top IT sector movement, Infosys has offered cash related help, planning company has been selected for the study for its significant for high bore and sensible social protection to patients who achievement in genuine CSR activities and others which require it the most. Working together with Swami help the company attain long-term sustainability. Other Vivekananda Integrated Rural Health Center (SVIRHC), considerations are that Infosys stood 1st position in the Infosys helps towards elimination of leprosy, tuberculosis Indian Companies List, 2019 based on its performance in and coordinated free eye exercises to patients. It four metrics like sales, profits, assets and market furthermore finances the BMCDT Bone Marrow Registry, (Business World Issue, 2020). Stratified random Bengaluru to develop an overall bone marrow giver vault technique tool is used for selecting the sample unit. in India. Besides descriptive study, the researcher also conducted survey study with the help of issue of questionnaires, etc. 3) Education: Infosys leads in improving education Discussions and personal interviews with the staffs and standards in the country. Infosys-Avanti Fellows the concerned authorities of the company were Partnership aids over 1,000 students to get access to undertaken by the researcher. On-the-spot studies were quality STEM education. Infosys Foundation also aligns carried out with the help of well-structured questionnaire. with many institutes to gain wider reach and makes Tentative questionnaires were pre-tested with the staffs engineering students employable. Infosys foundation and authorities. Although there was found apathy or collaborates with Sri Ramakrishna Vidya Kendra in the indifference on the part of executives in supplying Bannerghatta Forest area in Bengaluru to provide free information, the researcher could overcome the same meals to children belonging to BPL families and, hence, through moral persuasion and intensive pestering. It was promotes education among them. This Foundation has made clear to them that the information so collected will be joined with Chennai Mathematical Institute (CMI) to exclusively used for academic purpose and proper secrecy anticipate further examination and research crosswise will be maintained. over different orders especially in arithmetic and science.

4) Community Involvement: A business must spend a part RESULTS AND DISCUSSION of its profits towards civic and educational facilities of society (Joshi & Kapoor, 2004). Infosys provides Infosys maneuvers India’s few most pressing development educational facilities, healthcare facilities and contributes challenges in the areas of education, rural development, towards art and culture. gender equality, women empowerment, environment sustainability, preserving national heritage and culture, 5) Human Resource Development: In the present era of hunger, poverty, malnutrition and health. Infosys socio-economic set up, employees cannot be treated as Foundation has been investing on development projects the mere means to certain ends rather business through its CSR initiatives before it became mandatory enterprises are under moral threats to satisfy the needs under the Companies Act, 2013 for companies in India to and aspirations of the employees (Sarkar, 2005). Infosys spend at least 2% of their net profits on CSR activities. provides health and safety measures, retirement benefit, undertakes training programmes, profit-sharing programmes, etc. for its employees; thusly, develops human resource.

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6) Environmental Contribution: Reduction of resources COVID-19 Relief Measures consumption or polluting emissions can minimize environmental impact (Commission of the European Infosys Foundation identifies the immediate requirements Communities, 2002). Infosys contributes towards at various hospitals engaged in fighting against COVID-19 environment in terms of using recycled products, energy and supplies there medical goods such as ventilators, conservation, waste management, etc. patient monitoring systems, viral transport media, masks, non-contact infrared thermometers, medical gas pipelines 7) Product Contribution and Customers Relations: and gas manifold systems, PPE kits, etc.The Foundation Business must satisfy customer specific buying criteria like also supervises the poor and underprivileged, and price, quality, taste, safety and convenience (Centre for provides them hygiene kits, emergency needs, etc. and Corporate Research & Training, 2003). Infosys invests in also healthcare workers. On March 30, 2020, Infosys Research & Development (R&D) for providing quality Foundation has contributed Rs. 100 cores for COVID-19 services to its customers. relief efforts; of this, 50 cores are to the PM CARES Fund to boost the government’s relief endeavors. The 8) Shareholders Relations: Ownership justifies the primacy Foundation has developed a 100-bed facility in Bengaluru of treatment given to the shareholders (Centre for in association with Narayana Health City (NHC) for nursing Corporate Research & Training, 2003). Infosys having economically weaker sections by arranging grievance committee gives due deliberation to the interest accommodation, quality treatment and essential of the shareholders. medication. It has also instituted a 182-bed quarantine facility for the Bowring and Lady Curzon Medical College 9) Rural Development: Rural development implicits both & Research Institute, Bengaluru. The BBMP Super economic betterment as well as social transformation of Specialty hospital on the institute’s premises are people staying in rural areas. Infosys cultivates education redesigned into a specialized COVID-19 hospital. to the rural poor, helps underprivileged women, self-help women groups and bequeaths to flood catastrophes inhabiting in rural areas. Arts and Culture

Sustainable Projects Infosys Foundation has a contribution to preserving India’s rich heritage and honoring its artisans. In specific, the Foundation has sponsored Kala Darshan, a music i) Carbon Offset Program: In 2011, Infosys makes program through Bhartiya Vidya Bhavan, folk fest in covenant to become carbon neutral. It is conceded not only for direct market opportunities of rural artisan for superscribing climate change, but also for its approach communities, Uppina Kudru Kamath Memorial of integrating sustainable development goals such as Yakshagana Gombeyatta puppet in Karnataka for poverty mollification, gender equality and economic preserving the art of puppetry, Bhandarkar Oriental prerogative in its climate action endeavors. Recently, Research Institute in searching ancient Indian Infosys has eight community-based stabilized projects manuscripts, etc.to promote art and culture of India. covering Karnataka, Maharashtra, Rajasthan, Ladakh, and Besides, Infosys felicitates physically challenged Odisha to benefit rural families. Infosys CSR’s biogas and musicians, artists and Yakshagana artists from rural areas cook stove projects offer essentially smoke and heat-free and others. cookery environment that significantly lowers deleterious health impact of traditional cookery. Human Resource Development ii) Smart Infrastructure for carbon savings: Infosys thrusts the thresholds of innovation and competence building i)Employees’ Health and Safety: A healthy human cosmic savings every year and thus, reduces its carbon resource is the gateway of success and harbinger of emissions. Infosys pursues green power purchase from progress of any organization (Sarkar, 2005). The company third party and exercises with governments to enable through its health and safety management system appreciative policies for intensifying green power. monitors the performance regularly. Health Assessment and Lifestyle Enrichment (HALE) Plan enriches emotional iii) Lake Rejuvenation: Infosys extends cooperation with value-add of employees and optimizes their health, quality the Mysore administration to rejuvenate lake and restores of life, work environment, etc. to achieve adequate its glory to ensure the discharge of only the highest quality contribution from them. Infosys restrains child labor or of molded water into lake without much physical forced labor. Its robust survey mechanism secures mediatorship. employee satisfaction feedback. The company provides several facilities such as gymnasium, swimming pools and sports complexes to encourage healthy lifestyle.

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ii)Retirement Benefits: Infosys feeds gratuity, provident  Seeking opinion of the marginalized social groups fund, etc. for employees. on local development issues and their views on actual performance of elected bodies. iii)Training and Awareness: Infosys imparts training to  Collection of information by an auditor from employees, suppliers and vendors on human rights, etc. reliable sources.  Adopting performance indicators by the society at iv)Environmental Contribution: All the development large as yardsticks to judge performance. centers are ISO14001:2004 certified. Infosys’s existing  Regular meetings and follow ups to ensure the environmental initiatives concentrate on six areas: energy, continuity and effectiveness of audits. water, biodiversity, waste management, paper and  Adopting proper tools to recover swindled money emissions. Each location is subject to surveillance audit on from the corrupt officials. rotational basis.  Devising substantive procedure instead of compliance procedure to gauge performance. v) Recycling: Infosys encourages employees to exert best  Defining hierarchy of needs for conducting social practices like double side printing, smaller fonts, etc. to audit. minimize utilization of paper to a feasible extent.  Participation of NGOs in conducting audit.

vi)Conservation of Energy: Infosys moderates energy consumption through efficient equipment though its CONCLUSION operations are not energy intensive. This paper contemplates CSR as a methodology vii)Waste Management: Each development center has espoused by the selected company to attain its dedicated waste segregation and processing yard. Solid sustainable journey. CSR activities behave as an waste management in Infosys is developed on the triple instrument of social audit for self-appraisal of the R(Reduce, Reuse and Recycle)principles. Disposal of company. CSR and sustainable amelioration always waste is done as per the legislation applicable to synthesize as the company contemplates to perdure for hazardous waste management. perpetuity and thereby it feathers the society for future development. As an Indian company, it staunchly accredits viii)Product Contribution and Customers Relations: Infosys that a corporate should be responsible to upgrade the invests in R&D, designs, frameworks, processes and modus vivendi and reform the walk of life of society where methodologies. Intellectual Property (IP) precipitates it operates. Thusly, Infosys collocates its commitment to quality, productivity and customer satisfaction. society for both long-term and short-term perspectives. ix) Rural Reach Programme: (i) relief work for the victims; (ii) teaching aid and uninterrupted power supply unit for the RESEARCH COMMENT visually challenged; iii) self-help women groups; iv) vehicle for supplying food to schools and travelling to rural Social audit is very crucial into the execution process in areas;(v) construction of foot bridge, etc. Infosys helps India. Infosys’s social audit practice owes its triumph to the children in orphanage with midday meal programme. It demeanor of tenacious and dedicated leaders at the also helps underprivileged women through RAPID, an command. Infosys is now extensively contemplated as a organization in rural areas and provides sewing machines efficacious best approach that has ameliorated social audit to destitute women to enable their financial security. over the country. Its success rests substantially in the corroboration of society who demonstrates their x) Anti-Corruption: Infosys encourages its employees to acknowledgement of the operation. It also lies in the report on corrupt practices or unethical behavior under the acceptance and immense commitment of the whistleblower policy. The company has established control administration to support the process. Infosys Foundation systems to observe local laws on corruption in the behaves towards helping society and effectuating geographies it functions. sustainable development. It leverages its high tech background and executes projects which are contemplated on real-time basis and hence, fabricates RECOMMENDATIONS enduring impression in the society. In the global context, profit maximization is the final destination of corporation. The following recommendations are postulated to make Beyond it, certain laws and regulations restrict the globally social audit more constructive: reputed corporations to administer their running ethically  Clear disclosure of the intention for conducting and responsibly towards stakeholders. In the fast growing social audit. business world, corporate are continuously devoting to  Proper identification of stakeholders. society to reap public impression and reputation.

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IMPLICATION OF THE STUDY Clark C. Abt. (1974). The social audit for management. 17. Social audit is now widely accepted as an important Commission of the European Communities. (2002). mechanism to tackle malpractice and cultivate culpability Communication from the commission concerning in corporate and government schemes especially with the corporate social responsibility: A business contribution rapid globalization and the emerging trend towards a free to sustainable development. economy. This forum reconnoiters important exemplars on www.ec.europa.eu/employment_social/soc-dial/csr/ why and how to conduct social audit as a control device csr2002_en.pdf, accessed on 2006, January 10. which could be worthwhile for those engrossed in Dwivedi, R. (2010). “Social audit and its methodology”. 2nd systematizing social audit. This paper draws on Infosys’s Global Leadership Research Conference. Research experience to establish basic principles that need to be Gate. contemplated when developing an institutional set-up for Elmousadik, M., & Elkandoussi, F. (2016). Practice of implementing social audit of this nature. Infosys social social audit in hotel companies: Case study of agadir, audit is based on stakeholders’ perceptions of its social Morocco. International Journal of Economics and impact and their evaluation for its ethical performance. Management Engineering ,10 (4), 1289-1293. Thus, corporate must perceive the necessities and Forbes American Business Magazine. (2020). proclivities of society and then mold its spirit for their Forbes India Magazine. (2020). satiety. Academic research on social audit also intensifies Ghonkrokta, S.S., & Lather, A. (2007). Identification of role the relatedness between social audit and constitutional of social audit by stakeholders as accountability tool in exertion. good governance. Journal of management Research. Islam, M.T. (2015). Social audit for raising CSR performance of banking corporations in Bangladesh. FURTHER STUDY Jamie Snider, R. P. (2003). Corporate social responsibility in the 21st century: A view from the world’s most The study is developed on distinct ITC sector company. successful firms. Journal of Business Ethics , 175-1. The exploratory study may further be elevated taking a Joshi, R., & Kapoor, S. (2004). Business environment. great number of companies of other sectors ingrained on Kalyani Publishers. their CSR strategies to disseminate the conclusion. The Peter Kok, P. T. (2001). A corporate social responsibility researcher adjudges that the prospect in this sphere audit within a quality management framework. Journal demands extensive study to clinch at more meaningful of Business Ethics , 285-297. conclusion. Rahim, M. (2014). Social audit: A mess or means in CSR assessment? School of Accountancy,19-24. Sarkar, C. R. (2005). Corporate social responsibility of REFERENCES business enterprises. New Century Publications. Sushmita, G. (2013). Social audits in India. International Bauer, R. A., & Fenn, D. H. (1973). What is a corporate Research Journal of Social Sciences , 2 (11), 41-45. social audit? Harvard Business Review, 51 (1), 38. Vicario, M. M. (2015). Social audit: A mess or means in Business World Issue. (2020). CSR assessment ? Springer International Publishing. CAK, Y. (2007). Poverty alleviation programmes in India: Vicario, M. M. (2016). Social audit: A mess or means in A social audit. Indian Journal of Medical Research, 364- CSR assessment? Springer International Publishing. 374. Zhang, A.S. (2006). Stakeholder engagement, social Caroll, Archie B., & Boiler, George W. (1995). Landmarks auditing and corporate sustainability. In Business in the evaluation of the social audit. Academy of Process Management Journal, 722-740. Management Journal, 18, 589-99. Centre for Corporate Research and Training. (2003). Corporate social responsibility: initiatives of NSE Nifty companies: Content, implementation strategies and impact. www.nseindia.com, accessed on 2004,October 16. Chaitanya Nellithaya, Cosmas Lovejoy Dzomba, Sangeetha G Nagarakatte & Sanmayi N S . (2018). Business and the society: Stewardship principle of CSR. International Journal of Management, Technology And Engineering , 8(VIII). Chiang, A.G. (2018). Corporate social responsibility in the Mexican oil industry: Social impact assessment as a tool for local development. International Journal of Corporate Social Responsibility, 3(1).

Social Audit in India: Evidence from Infosys Ltd.

Accepted 21 September 2020

Citation: Pradip Kumar Das (2020). Social Audit in India: Evidence from Infosys Ltd., Journal of Accounting, Auditing and Taxation, 4(1): 064-070.

Copyright: © 2020 Pradip Kumar Das. This is an open-access article distributed under the terms of the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original author and source are cited.

Social Audit in India: Evidence from Infosys Ltd.