Komsomolskaya Pravda v Ukraine
 
Komsomolskaya Pravda V Ukraine campaigned to raise funds for Okhmatdet Kiev Hospital. Several companies including System Capital Management (SCM), TM Mivina, and TM Monastyrskiy Kvas responded to our appeal to transfer UAH 10,000 to the hospital’s account. We invited their representatives to discuss social responsibility of business. Anatoliy Zabolonty, Director of SCM’s Corporate Foundation for the Development of Ukraine, Mrs. Valentina Senchenko, Deputy General Director of Tekhnokom Corporation (TM Mivina), and Mr. Yuriy Gladush, Chief Doctor of Okhmatdet Hospital took part in our round table
 
- How do Ukrainian companies interpret social responsibility of business?
Anatoliy Zabolonty: - We surveyed managers of our assets to find how they regard social responsibility. Charity or patronage as well as care for own employees were among the most common answers. But the concept is much wider and we consider it as being a responsible corporate citizen. This covers both responsibility to employees and partners and to the city where our company operates, as well as meeting our obligations to the state and implementing development programmes on the state level.
Valentina Senchenko: - Our corporation actively follows the principles of the Social Responsibility of Business, determining them as a free-will obligation of business to contribute to the stable economic development, labor relations with employees, their families, local community and the society as w hole to improve the life quality.  For example, all our employees (some 3,000) are granted with significant social guarantees: along with the salaries, they are provided with free meals, preferential medical care, full rest and recreation.  
One of the greatest social projects is the construction and start-up of sport and recreational complex of the corporation. The activities and action of the foundation "Budushcheye Miviny" [Future of Mivina] should be paid special attention. Its activities are aimed at supporting the all-round development of children, providing material support to them, encouraging knowledge and skills, paying for education. We also make contributions to sport and dance tournaments.
- Who is the one to be responsible for the social sphere, the state or the business?
Yuriy Gladush: - In other countries the businesses make donations of up to 10 percent of their profits. As you understand, nobody is likely to simply give away the tenth part of one's profits. I'm confident: to make donations, the businessmen should be interested in the same. A relevant legal framework is required to encourage businesses to spend money on social projects and charities.
Corruption in our country is another problem. I have meetings with the representatives of big businesses who are reluctant to provide funds for particular programmes. They do not believe the funds will be utilized purposefully. Yet, a lot of them are ready to spend significant amounts on a certain sick child. That's why, I believe, social programmes in our country are in the eggs.
- Doesn’t the state encourage the business at all?
Anatoliy Zabolony: - If donation amount is within 2-5% of the net profit, it is tax-exempt. But this privilege doesn’t cover the amount less than 2% and upward of 5%.
Yuriy Gladush: - Indeed, if someone transfers money to a hospital otherwise than as a charitable aid, these sums are charged with taxes. Such charitable aid should be used for development only. Now try to imagine a nurse in a neonatological department where premature newborns are nursed. Ukraine has undertaken to nurse newborns starting from 500 grams. So, this nurse should be a first-class specialist, but the salary she is paid is insufficient to exist on. The donations are prohibited from being used for the labor remunerations of employees.
Where can we find the money sources if we are not entitled to provide paying services in pediatrics? The budget funds are insufficient, and there are mere talks of insurance medicine. That is why the Verkhovna Rada have much to do in this aspect.
- Why hasn’t the Ukrainian parliament approved the laws required to stimulate the business yet?
Anatoliy Zabolotny: - If we take motivation of big businesses, the tax privileges are not the first priority for them. Our assets are often city forming, so the most of their citizens work at our companies. Operation of plants and factories depends on social climate in cities. These large assets allocate funds to establish and maintain infrastructure, e.g. hospitals (for example by purchasing equipment for them), roads, and sport facilities. Health of employees and their families depends on their living conditions.
Valentina Senchenko: - We are trying to provide a targeted support to a particular sport club, particular organization, or a particular child. It's of high importance to provide support to the one who needs it most. Only in this case the support makes sense. The State has to create conditions encouraging sponsorship activities.
- Are small businesses socially responsible?
Anatoliy Zabolotny: - Big businesses obviously have more opportunities for social responsibility. Yet mechanisms and opportunities for the small business are necessary as well. Proper treatment of employees by the small business must be legally fixed. Large companies have been paying officially registered salaries and providing social protection to their employees for long. But it remains a problem for small firms.
 
By Maria Andrushchik, Andrey Khrustalev, Andrey Gatsenko
 
No Way Forward Without Social Activity
A founder of management science Peter Drucker regarded responsibility to the society as one of eight key spheres of company’s life (together with innovations, profitability and efficiency) that require clear goals. A proper policy of the Western companies in this field increases their capitalization noticeably, improves their reputation in the eyes of consumers and business partners. A survey conducted in the USA by DePaul University in 2002 showed that performance of the businesses included in the rating of Busіness Ethіcs Best Cіtіzen Companies is 10% better than operation of other businesses listed in 500 Standart&Poors.
 
Major investment spheres comprise training of employees, labour safety, environment protection, development of local communities, and integrity of business practice. The largest European companies are even engaged in promotion of traffic safety.
 
Russian companies spent from $500 million to $1 billion on social projects annually. Metal businesses obviously account for the most number of such initiatives. So, Ural Mining and Metal Company alone intends to invest about $130m until 2008 in social projects. Sual Group commits annually over $40m, while Magnitogorsk Steel Works allocates around $30m on such initiatives.

12.01.07