LAHORE: We frequently criticise the government for not delivering, but ignore the fact that our corporate sector has also failed to do something for public good.
Both are interested in increasing revenues without regard for the poor or the environment.There is no doubt that governments’ world over need revenues for better governance and provision of better services to the public.
The governments are also expected to build new infrastructure or upgrade the existing ones.However, the governments in Pakistan have continued to ignore development for the last 30 years and continued to jack up administrative expenses.
In the same way, the corporate sector is first responsible to its shareholders for ensuring them better returns. And it is also responsible for its contribution to the society. It is the responsibility of the corporate sector to ensure that they operate on clean technologies; do not release polluted water or smoke into the environment.
Continue adding plantations from part of annual profits to create a healthy atmosphere for their employees and people living around their factories. The corporate sector should also join hands with the government in infrastructure projects.
This sector should not invest in real estate and national saving schemes to generate profits without creating new jobs.According to McKinsey and Company research, as we enter a new decade, we recognise that the role of corporations is evolving. Times are changing. No longer are corporations only obligated to answer to shareholders, they are now held against a broader set of stakeholders.
Whether these stakeholders are governments looking to build new infrastructure to keep up with staggering urbanisation rates or the mass of growing environmentally and ethnically aware consumers; the role that corporations play in society to answer demands is being redefined.
It is time that our corporate sector analyses to see how far it is operating from these global trends. The research also pointed out that 43 percent of the world’s top 5,000 firms by revenue are now headquartered in Asia.
Three hundred fewer Japanese firms make the cut today than ten years ago. Singapore and South Korea largely maintained their representation at 40 and 160 companies, respectively.
However, Chinese companies doubled their share of the G5000 in the past decade to more than 900 firms. The number of Indian firms represented has also doubled from a lower base of 85 to 142, the seventh-highest share.
Companies from emerging Asian economies that include the Philippines, Thailand, Malaysia, and Vietnam have also risen to prominence. Bangladesh now has a company in the G5000 for the first time.Is it not unfortunate that we do not have a single corporate entity in this list?
In fact the 5000 top companies are multinationals and we do not really have a corporate entity that can truly be classified as a multinational. The 43 percent top 5000 companies that represent Asia are following the new trend of being socially responsible as well as generating profits for their stakeholders.
One reason for the failure of the corporate sector in Pakistan to emulate its peers in rest of Asia is the general thinking that making money is a sin. People feel elated if even false stories of wrong doings of big corporates are highlighted by a section of media.
The defamation suit filed against them prolongs for an indefinite period with the result that large corporations in Pakistan try to avoid coming to limelight. Even the contributions they make towards betterment of society are misreported.
It is indeed surprising that the society respects smugglers, hoarders and tax evaders. Their social work is highlighted.
They are not job providers but they do come in the limelight by providing free meals to anyone that comes at their designated outlets in the afternoon and morning. People line up in long queues disturbing traffic flow every day to get that free meal.
They spend most of their time in this exercise and do not seek any job. General public praise this generosity as a noble act without realising that people are being turned into beggars. The government is also doing the same exercise of providing unconditional resources through Benazir Income Support Program. Lately this government also started opening shelter homes to provide unconditional free meals and a shelter to live in.
These unproductive exercises might create goodwill for the government, smugglers and tax evaders, but it is poisonous for society and productivity. These practices have triggered revenue led recession where government increases taxes and wastes revenues on non-productivity.