I have always maintained that no organization can stay isolated from its local surroundings. Wherever a company has tried to stay disengaged from its immediate surroundings, it has faced major issues, often leading to the closure of business. This poses a major risk for investors.

We can classify local relationships into two categories—local administration and social environment. For a business, maintaining close relationships with local government agencies and officials helps a lot. With the fast-changing business environment, staying up to date with the rules, regulations, policies, and laws that govern the business is important to help avoid unnecessary conflicts leading to fines and shutdowns. It also helps to show prospective employees that the organization is a responsible employer, as no one wants to get associated with an entity that is regularly at loggerheads with regulators.

VFS Capital has always tried to maintain a cordial relationship with local government agencies. We keep them abreast of all plans and proceedings and partner with them in local initiatives. VFS Varta, a quarterly newsletter published by our organization, keeps all stakeholders updated.

When we talk of maintaining relationships with the social environment, an organization’s activities under the Corporate Social Responsibilities head play a big role. CSR is the best way of creating a positive impact on the local stakeholders, who are not directly related to the company. Along with the reputation of acting legally and responsibly, local communities like to support companies that give back through charity and participate in local community activities and events. Moreover, it is seen that the morale of the internal team also goes up if it is involved in CSR activities. Doing good and giving back to the lesser privileged of society fills employees with pride and has a great effect on team building. Added to that is the prospect of local job creation. Roles that can be filled with locals should be filled with locals.

I would like to iterate that it is of utmost importance for companies to establish and maintain beneficial relationships with the communities in which they operate. However, it is a concern that this most important communication activity is often overlooked, till the time the organization lands in a problem. Sometimes it is too late.