something is changing in the world of corporations the traditional model of profitdriven capitalism is giving way to the idea of compassionate capitalism a listed companys balance sheet today is peppered with words like purpose and people along with profits organisations are increasingly addressing their communication to stakeholders suppliers customers consumers and society at large rather than shareholders alonebusiness leaders are voicing these opinions too in conversations with toi hindustan unilever hul cmd sanjiv mehta critiqued conventional capitalism while vijay govindarajan professor at tuck business school said it is in urgent need of redemption and ajit ranade president and chief economist aditya birla group said capitalism is losing support because of its failure to address widening inequalitiesclearly things have sharply changed since the 1970s when nobel laureate milton friedman said the business of business is business he meant that the sole social responsibility of business was to use its resources and engage in activities designed to increase profits as long as it was engaged in open and free competition without deception or fraud it only needed to focus on shareholders said friedmanbut now companies frame their vision statements to convey that whats good for society is good for business mehta of hul says in the era of globalisation we saw immense wealth being created large populations came out of poverty and the lives of people became more comfortable than ever through technology the 80s and 90s was also an era where it was clearly proven that market economy is the best way to allocate scarce resources we also saw the downfall of the socialist economy and even from a political lens the disintegration of the soviet bloc the question that might come up is if capitalism and milton friedmans theories are working so well then why should they not continue but then if you pause and reflect millions of people still go to bed hungry each day every six seconds a child dies of malnutrition a few people who can all be accommodated in a bus have more wealth than half the worlds population the big challenges we are facing over our continued stewardship of our planet then you realise that the current model of capitalism is not working all that wellmillennials show the waycorporate social responsibility csr and environment social and governance esg factors are an important part of corporate thinking today as the levers of success change one will see that the financially successful companies are also the most socially inclusive harsh goenka chairman of rpg enterprises told toithe idea of compassionate capitalism is gaining ground across the globe last month the business roundtable comprising ceos of 200 of americas largest companies redefined its purpose statement highlighting that friedmans concept of shareholder primacy was changing more than 180 american companies pledged that their purpose would go beyond promoters to a wider community even two decades ago the business roundtable had been of the view that the paramount duty of the management and the board of directors