In the last few decades, Corporate Social
Responsibility (CSR) has become an integral
part of the public discourse with academicians,
practitioners, policy-makers and media laying
stress on equitable outcomes through businesssociety
interactions. While there was a general
agreement that businesses needed to do more
to be socially and environmentally responsible, a
far-ranging debate has ensued amongst various
stakeholders to determine the exact nature of these
obligations. In this backdrop, the Government
of India passed a prescriptive law under the
Companies Act of 2013 making CSR mandatory
for certain class of companies from the financial
year (FY) 2014-15.
The Thomas Schmidheiny Centre for Family
Enterprise at the Indian School of Business
has conducted this study, for the three-year
period between FY 2015-2017, to understand
heterogeneity in behaviors across different
categories of firms based on ownership structures.
Apart from the quantum of spends, we have
looked at the nature of spends covering the
areas of development selected by the different
categories of firms while also throwing light on the
implementation modes chosen to spend their CSR
monies. Our results show that Family Firms have a greater
pre-disposition to meet the CSR compliance under
the law and we find that the historical context
and theoretical frameworks are aligned with these
findings. In wanting to create lasting organizations,
family firms institutionalize enduring values that reflect
in the engagement in social welfare activities across
generations. However, family firms undertake these
activities directly either through in-house teams or
company-owned foundations which are also known
to be controlled by family members. It leads to the
argument that this would expropriate any benefits for
minority shareholders in building a positive legacy for
the family. Therefore, it is argued that family-owned
firms professionalize their social pursuits and build
transparent and strong governance mechanisms in the interest of their firms.