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CS Professional · CSR and Social Governance · Impact of CSR

Veda Textiles Ltd, a listed Indian company, runs a skill-training programme for women in villages near its spinning unit. After three years, local hiring has become easier, absenteeism has fallen and the community supports the unit's expansion. Which benefit of CSR to the business is most directly illustrated?

The case shows CSR creating a stable local workforce and community acceptance, known as a social licence to operate. Training local women eased hiring and cut absenteeism, while community support helped expansion. CSR does not exempt a company from other laws or reduce audit fees.

  1. ADevelopment of a stable local workforce and a social licence to operateCorrect
  2. BA guaranteed reduction in the company's statutory audit fee
  3. CAutomatic exemption from compliance with other laws
  4. DConversion of CSR spending into a tax-free reserve

Explanation

Easier local hiring, lower absenteeism and community support show that CSR has built a reliable talent pool and goodwill, often called a social licence to operate. The other options describe benefits that CSR does not provide by law.

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