Our Approach to societAL responsibility

There are many responsibilities owed by a leading bank like ours to the society in which it operates. One of the most important of these is making a concerted effort to guard against and discourage moral hazard, corruption and anti-competitive behaviour. In this regard, Commercial Bank is in a strong position of influence, since it acts as financier to such a large segment of society and business.

Another clear responsibility of the Bank is, of course, to generate financial value on behalf of its shareholders.

Commercial Bank also recognises a third responsibility, that of generating social value, of being of benefit to the society and communities in which it operates. Our success makes it possible for us to give something back to the different segments of the society, especially to those most disadvantaged and vulnerable. We discharge this responsibility through a number of social initiatives. The Bank’s Corporate Social Responsibility (CSR) activities date back to many decades. In 2004 the Bank founded the Commercial Bank Social Responsibility Trust with an initial capital of Rs. 25.0 Mn, and showed its continued support by contributing sums of money every year since then. The Bank contributes up to 1% of its post-tax profits to the Trust. The contribution in 2011 amounted to Rs. 80.0 Mn. towards this worthy cause, the highest since the inception of the Trust, and making the total contribution to exceed Rs. 240.0 Mn. The deed of the Trust outlines the following objectives:

To support and further education in Sri Lanka
To assist in improving health services in Sri Lanka
To preserve and improve the environment
To support and provide community services
To assist in preserving and further promoting the cultural heritage of Sri Lanka and to promote culture and arts
To assist the Government and Local Government Authorities and farmer organisations to dredge and rehabilitate tanks and other sources of water supply providing water for agricultural and consumption purposes and
To undertake other charitable activities decided by the Trust

Policy

The overall goal of the Bank’s social policy is to generate measurable and sustainable social dividends for different segments of society, in particular those which require empowerment most urgently. In this regard, the CSR Trust, which finances all social projects of the Bank, continuously aligns its targets to fall in line with Bank’s CSR policy.

Goals and Performance

The Bank’s CSR strategy is developed within the objectives, Vision and Mission of the Bank. The Bank selected ‘Education’ as the primary sphere of activity as it is most crucial to ensuring growth and future of the Sri Lankan society. The Bank’s education initiative supports school children and young adults of Sri Lanka regardless of their gender, race, religion or social background. The main thrust within ‘Education’ is supporting IT education and English language proficiency in Sri Lanka. This was selected after careful consideration of the Bank’s broad Vision and development road map of the Government of Sri Lanka.

The Bank commenced an IT lab project for schools with the assistance of its branch network in 2011 and also completed the groundwork for an ‘English Language Education Programme for Rural Children’ which will commence in 2012.

The Bank also extended assistance to secondary projects within the scope specified in the CSR Trust such as health care projects, scholarships to undergraduates and other selected projects. These projects were selected following an evaluation of their potential impact on the society and other stakeholders.

The positioning of the CSR strategies are formulated mainly to nurture the future of this country through IT and English education, and thereby empowering the future generations to be on par with other developed nations to face the challenges of the 21st century.

Organisational Responsibility

Commercial Bank’s CSR Trust represents four members of the highest governance body, namely, the Board of Directors. The Chairman of the CSR Trust has overall responsibility for the Bank’s commitments to society. This structure shows the commitment of the Board of Directors of the Bank towards ensuring sustainability in its letter and spirit.

A dedicated senior officer of the Bank serves as the CSR Coordinator, who reports directly to the Trustees in assisting them in achieving the objectives of the Trust. This officer is responsible for carrying out programmes of actions decided upon by the Trustees with the responsibility of managing and reporting financial aspects of the Trust. Further, this officer is also responsible for coordinating the meetings of the Board of Trustees and proposing relevant programmes or actions in furtherance of the objectives of the Trust.

Training and Awareness

There is no formal training conducted on the subject. The Chairman of the CSR Trust communicates in writing with all Branch Managers of the activities the Trust has decided to undertake during the year under review, together with relevant guidelines for implementation.

Monitoring and Follow Up

The CSR Coordinator is responsible for keeping the Board of Trustees informed of the status of all CSR activities entrusted by the Trustees. The Trustees meet once a month and ensure that the proper follow up actions are being taken on all CSR projects under implementation.

Key Performance Indicators of Societal Responsibility

Overview of CSR Activities

The Bank’s CSR activities during the year under review primarily concentrated on projects under three ongoing initiatives: IT education, undergraduate scholarships and healthcare. In all, a total of 35 projects were completed, of which 34 were undertaken in these three areas.

Branch Involvement

No. of CSR projects completed: 35 No. of delivery points: 213 Percentage of the Bank’s branches or delivery points completing CSR projects: 16.4%.

Magnitude of CSR Projects Completed

Average cost of a CSR project completed amounted to Rs. 600,000/- per project.

The figure below gives a snapshot of CSR activities completed and under implementation in 2011.