Beyond Profit - Corporate Governance, Civil Society, and the Search for a New Social Compact

Key Highlights

Beyond Profit: Understanding the Changing Balance between State, Market, and Society

The discussion begins by examining how the relationship between the State, the market, and civil society has transformed over the past several decades. While earlier development models involved a creative tension between actors, contemporary governance increasingly reflects the dominance of market forces. This shift has significant implications for democratic accountability, public welfare, and civic participation.

Collaboration as a Development Model 

Drawing from experiences in disaster rehabilitation and industry leadership, the conversation highlights the transformative potential of collaboration between corporations, governments, and civil society organisations. Moments of crisis often reveal that complex social problems are most effectively addressed through partnerships rather than isolated interventions.

The Emergence of Corporate Foundations and Structured Social Impact

Before CSR became a legal requirement, many large corporations developed dedicated philanthropic and social development structures to manage increasingly complex community programmes. As businesses expanded, founders delegated social initiatives to family members, trusts, foundations, and specialised teams that worked closely with civil society organisations. This intermediate phase marked the transition from personal philanthropy to organised social engagement and laid the groundwork for the CSR ecosystem that would later be formalised through legislation.

Corporatisation of Philanthropy and the Erosion of Long-Term Social Engagement

While CSR has become more structured and professionalised, concerns were raised that increasing corporatization risks weakening the original spirit of social responsibility. The discussion highlighted how short funding cycles, outcome-driven metrics, and compliance requirements can push civil society organisations towards service delivery models, making sustained community engagement and long-term social transformation more difficult. This raises broader questions about how CSR can balance accountability with meaningful social impact.

The Evolution of CSR: From Philanthropy to Compliance

The introduction of the Companies Act, 2013, marked a major turning point in the evolution of Corporate Social Responsibility (CSR) in India. By mandating qualifying companies to spend 2 per cent of their profits on approved social activities, CSR moved from a largely voluntary practice to a formal corporate obligation. The new framework introduced fiduciary responsibilities, reporting requirements, compliance mechanisms, and greater scrutiny of how social investments were made. While the legislation succeeded in directing significant resources towards development initiatives, the discussion also reflects on concerns that a spirit of social responsibility rooted in values and community relationships may have gradually been replaced by a more compliance-oriented approach.

CSR as an Enabling Rather than Prescriptive Framework

The Companies Act identifies broad areas eligible for CSR investment, including health, education, livelihoods, and innovation. However, corporates retain considerable autonomy in determining how funds are deployed. The discussion highlights CSR as a framework that enables social investment rather than a mechanism through which the State directs corporate spending. 

CSR, Reputation, and Corporate Identity 

The growth of market competition encouraged corporations to view CSR not only as a moral responsibility but also as a means of building reputation and public trust. As branding and social responsibility became increasingly interconnected, CSR evolved into an important component of corporate identity and stakeholder engagement. 

Defining the Roles of State, Market, and Civil Society

The conversation outlines distinct but interconnected roles for each sector. Industry generates employment, innovation, and investment. Civil society acts as a watchdog, protecting consumers, communities, and the environment. The government regulates competing interests, creates incentives, and balances economic and social objectives. Sustainable development requires all three sectors to function together rather than in opposition. The discussion suggests that the balance between these actors has shifted significantly, with market institutions gaining influence while both regulatory capacity and civic oversight have weakened.

Shrinking Civic Space and the Weakening of Civil Society 

The episode raises concerns about the erosion of independent civil society organisations and the consequences for democratic engagement. As many grassroots organisations struggle to survive, corporations increasingly rely on consultants, experts, and individual professionals rather than autonomous civil society actors. This shift risks reducing the diversity of voices involved in development processes.

The Professionalisation of Social Impact

The institutionalisation of CSR created new structures, processes, and measurement systems for evaluating social impact. While professionalisation has improved accountability and reporting, it has also introduced pressures to demonstrate measurable outcomes within short timeframes, often conflicting with the longer-term nature of social change and community development. 

The Missing Dialogue Between Corporations and Communities

Corporate engagement with communities often occurs through conflict-driven mechanisms such as land acquisition processes, environmental clearances, public hearings, consumer complaints, or social media disputes. The conversation argues that genuine dialogue spaces between communities, businesses, and government remain largely absent, contributing to mistrust and adversarial relationships. 

Adversarial Relationships Between Corporations and Civil Society

The discussion explores how corporations and civil society often encounter each other through conflict rather than collaboration, particularly around land acquisition, environmental clearances, resource use, and development projects. Corporations may view NGOs as obstacles to growth, while NGOs often perceive corporations as actors that impose decisions without meaningful consultation. This adversarial dynamic limits dialogue and underscores the need for new institutional spaces that enable trust, participation, and negotiated development outcomes. The conversation argues that civil society’s role as a watchdog remains essential, but that accountability is most effective when accompanied by institutionalised channels for engagement, negotiation, and collective problem-solving.

Framework of Dialogue: Towards a New Social Compact 

A recurring theme throughout the discussion is the need for a new social contract that brings together government, industry, civil society, academia, and citizens. Such a framework would create structured spaces for dialogue, deliberation, and collaborative problem-solving around development, environmental protection, economic growth, and social equity.

ESG and the Rise of Corporate Accountability 

The discussion explores the growing importance of Environmental, Social, and Governance (ESG) frameworks and Business Responsibility and Sustainability Reporting (BRSR) requirements. Although often criticised as compliance exercises, these frameworks have encouraged corporations to measure and disclose information related to environmental performance, governance structures, labour practices, and social impacts. By requiring disclosure on issues such as energy use, carbon footprints, governance practices, board functioning, and social indicators, these frameworks are reshaping how corporations understand accountability and sustainability.

From Compliance to Strategic and Economic Value

What initially appeared to be a reporting burden is increasingly viewed as a strategic asset. ESG performance now influences investor decisions, access to finance, recruitment, reputation, international competitiveness, and regulatory compliance. As a result, sustainability considerations are becoming integrated into corporate decision-making. 

Supply Chains and the Limits of Corporate Sustainability

The conversation highlights how sustainability challenges often emerge within supply chains rather than within large corporations themselves. Pressure on vendors to reduce costs can undermine labour standards and environmental practices, raising questions about how responsibility is distributed across production networks and whether sustainability commitments extend beyond the corporate core. 

Industry Associations as Knowledge and Capacity Builders

Industry associations play an important intermediary role in helping companies, particularly small and medium enterprises, navigate emerging sustainability requirements. By providing training, technical expertise, peer learning opportunities, and access to affordable consultants, these institutions help translate ESG principles into practical organisational change.

Responsible Capitalism and the Question of Inequality 

The conversation critically examines rising inequality while also acknowledging the importance of entrepreneurship, innovation, and business growth. Rather than focusing solely on redistribution, the discussion calls for a transition from promoter-driven capitalism to accountable capitalism and ultimately to responsible capitalism, where growth is balanced with broader social responsibilities. 

Inequality, Competition, and the Abuse of Dominance

The discussion distinguishes between inequality and market domination, arguing that inequality alone is not necessarily harmful if it emerges through innovation, entrepreneurship, and economic growth. The greater concern is the abuse of dominance, where powerful firms suppress competition and limit opportunities for others to grow. The conversation explores the challenge of balancing inclusive development with the need to encourage enterprise, investment, and long-term innovation.

Economic Growth, the Middle-Income Trap, and India’s Development Challenge

The discussion argues that India remains in a critical phase of economic development and must avoid becoming trapped at middle-income levels of prosperity. While concerns about inequality, environmental sustainability, and corporate accountability are important, the conversation stresses that economic growth, entrepreneurship, innovation, and job creation remain essential for improving living standards. The challenge is not choosing between growth and justice, but ensuring that growth is accompanied by accountability, inclusion, and responsible governance. 

Economic Growth, Regulation, and Development Trade-Offs 

The episode reflects on the tensions between economic expansion and regulatory controls. Excessive regulation can suppress innovation and entrepreneurship, while insufficient regulation can lead to exploitation, concentration of power, and social exclusion. Navigating these trade-offs remains one of the central challenges of public policy. 

Consumer Rights in the Digital Economy 

The rapid expansion of digital platforms, e-commerce, and technology companies has transformed consumer markets. While digital services have improved access and convenience, they have also created new concerns regarding accountability, grievance redressal, platform responsibility, and consumer protection. 

Data Privacy, Artificial Intelligence, and Democratic Risks 

The discussion highlights growing concerns about personal data collection, surveillance capitalism, and the influence of algorithmic systems on consumer behaviour, political preferences, and democratic processes. Questions of data ownership, privacy rights, and platform accountability are identified as critical governance challenges of the digital age. 

Climate Change, Disaster Mitigation, and Corporate Responsibility 

Disaster management is framed not merely as emergency response but as a question of prevention and resilience. The conversation emphasises that investments in disaster mitigation, climate adaptation, resilient infrastructure, and sustainable development generate significantly greater long-term benefits than post-disaster recovery efforts.

Technology and Innovation in Disaster Response 

Corporations increasingly contribute to disaster management through technological innovation, logistics, temporary infrastructure, and rapid deployment systems. However, the discussion argues that greater attention should be directed toward reducing vulnerability before disasters occur.

The Search for Ethical Leadership and Public Conscience 

The conversation concludes by reflecting on the absence of widely trusted public leaders capable of convening diverse stakeholders around shared goals. It argues for the emergence of independent moral leaders and public intellectuals who can act as conscience keepers, facilitate dialogue, and help societies navigate periods of rapid transformation. 

Frameworks for Dialogue, Dissent, and Collective Action 

The discussion repeatedly emphasizes the need for institutional mechanisms that enable dialogue between government, business, civil society, academia, and citizens. Beyond consultation, these structures should provide opportunities for dissent, feedback, negotiation, and course correction before conflicts escalate. Effective governance requires not only decision-making but also the capacity to listen, learn, and adapt.

Compassion, Inclusion, and the Future of Development 

The episode ends by emphasising that economic development must ultimately be grounded in compassion, empathy, inclusion, and social responsibility. While pluralism and disagreement are healthy features of democratic societies, the pursuit of a more equitable, less violent, and more humane future must remain a shared objective.

References and Resources 

Confederation of Indian Industries (CII): https://www.cii.in/

Confederation of Indian Industries (CII), Gujarat: https://www.cii.in/States.aspx?enc=5WcSaM0yzEfRFlFUNeIvYGPI9xL9HypQH+qrcmYEmb61K1Y3HKQDbmKCYErVdRSVV2hcClPokZf3lCiH1opHEw==

Consumer Education and Research Centre (CERC): https://cercindia.org/

New Economic Policy (NEP), 1991: https://vajiramandravi.com/upsc-exam/new-economic-policy-1991/

Companies Act, 2013 (Section 135- Corporate Social Responsibility): https://www.indiacode.nic.in/bitstream/123456789/2114/5/A2013-18.pdf

Corporate Social Responsibility (CSR), Ministry of Corporate Affairs: https://www.mca.gov.in/content/mca/global/en/data-and-reports/company-llp-info/csr-data-summary.html

National CSR Development Portal: https://www.nationalcsr.org/

Business Responsibility and Sustainability Reporting (BRSR), SEBI: https://www.sebi.gov.in/sebi_data/commondocs/may-2021/Business%20responsibility%20and%20sustainability%20reporting%20by%20listed%20entitiesAnnexure2_p.PDF

Environmental, Social, and Governance (ESG) Reporting Frameworks: https://public.unpri.org/review-of-trends-in-esg-reporting-requirements-for-investors/10296.article

United Nations Global Compact: https://unglobalcompact.org/

Reflecting on the UN Global Compact: What went wrong?: https://blogs.lse.ac.uk/businessreview/2022/07/26/reflecting-on-the-un-global-compact-what-went-wrong/

Global Compact: A Critique of UN’s Public-Private Partnership for Promoting Corporate Citizenship: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=925692

Millennium Development Goals: https://www.un.org/millenniumgoals/

Sustainable Development Goals: https://sdgs.un.org/goals

Competition Commission of India (CCI): https://www.cci.gov.in/

Consumer Protection Act, 2019: https://www.indiacode.nic.in/bitstream/123456789/15256/1/eng201935.pdf

The Digital Personal Data Protection Act, 2023: https://www.meity.gov.in/static/uploads/2024/06/2bf1f0e9f04e6fb4f8fef35e82c42aa5.pdf

National Disaster Management Authority: https://ndma.gov.in/

Sendai Framework for Disaster Risk Reduction: https://www.undrr.org/implementing-sendai-framework/what-sendai-framework

Climate Change and Disaster Risk Reduction: https://www.undrr.org/implementing-sendai-framework/sendai-framework-action/climate-action-and-disaster-risk-reduction

World Economic Forum: https://www.weforum.org/

Vibrant Gujarat Global Summit: https://cmogujarat.gov.in/en/vibrant-gujarat

Responsible Capitalism: Rethinking the Role of Business in Society: https://onlinelibrary.wiley.com/doi/abs/10.1111/basr.12123

The Monopolies and Restrictive Trade Practices Act, 1969: https://www.indiacode.nic.in/repealedfileopen?rfilename=A1969-54.pdf

Principles for Responsible Investment (PRI): https://www.unpri.org/

OECD Guidelines for Multinational Enterprises on Responsible Business Conduct: https://www.oecd.org/content/dam/oecd/en/publications/reports/2023/06/oecd-guidelines-for-multinational-enterprises-on-responsible-business-conduct_a0b49990/81f92357-en.pdf

Data Governance and Privacy in the Digital Age: https://www.unesco.org/en/data-governance-digital-age

Consumer Rights in E-commerce: https://www.iisd.org/system/files/2025-04/consumer_protection_and_e-commerce_-_issues_for_developing_country_policymakers.pdf

India Justice Report: https://indiajusticereport.org/

World Bank- The Middle Income Trap: https://www.worldbank.org/en/publication/wdr2024

Climate Adaptation and Resilience: https://www.ipcc.ch/report/ar6/wg2/

Artificial Intelligence and Democracy: https://www.unesco.org/en/articles/artificial-intelligence-and-democracy

Constitution of India: https://www.legislative.gov.in/static/uploads/2025/07/ca7ce5c746fa7480804bbdeb6cb704f0.pdf

Question of Cities: https://questionofcities.org/

Hosts

Gagan Sethi: Development practitioner and social justice advocate with 40+ years of experience in organisational development, policy advocacy, and minority rights. 

Minar Pimple: Human Rights Advocate, Development leader and Founder of YUVA (Youth for Unity and Voluntary Action), and former Senior Director at Amnesty International, Regional Director-Asia Pacific (UN Millennium Campaign) and Founding Chair, Oxfam India.

Guest

Dr. Sunil Parekh: Chairman of Consumer Education and Research Centre (CERC). He is also Senior Strategy Advisor to two multi-national corporations- Zydus Cadila Healthcare Group and Jubilant Bhartia. With over 48 years of global experience in strategy, innovation, start-up incubation, public policy, arbitration, and industry bodies (CII, FCCI), Dr. Parekh is highly regarded in the domain of Corporate Social Responsibility (CSR). He is also the India Co-Chair of the techXchange initiative under the Indo-UK Partnership Program for exchange of Start-ups.