The good news over the last decade has been the increasing importance attached to values and ethics in business. The better news is that as we move ahead into the 2020s and beyond, this aspect will become even more important. When we speak of "the soul", two thoughts come to mind. One, that the soul is something that is permanent and indestructible, whereas the body ages and finally perishes over time. Two, the soul represents something deep within and fundamental that urges you to move towards what is right, like the voice of conscience. Though both these thoughts may sound spiritual, they have a direct relevance to business. Some of the major economic scandals involving large corporations have proved that a flaw in the character can bring down crumbling something that has taken years to build. Sustainability and ethics are inextricably linked. You cannot have one without the other.

I am really happy that the debate, which went on for decades on whether business goals and ethics oppose each other, has been finally laid to rest. Similarly, I find Milton Friedman's views on the role of business extremely limiting in the present context. In his now famous statement, Friedman asserted that "there is one and only one social responsibility of business-to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition, without deception or fraud". Friedman felt that doing anything else was a waste of resources. I, however, believe that the interests of shareholders are best served when we serve the interests of society at large, and therefore the purpose of the business is really to push the envelope further for every stakeholder.

Let me first address the issue of why businesses must engage with society. I would like to offer two reasons. The first is that, like people, no business is an island. A business cannot be a success in a failed society. Let me illustrate this by a concrete situation. In India, except for a handful of higher education institutions, a large part of the higher education system is producing poor quality graduates and post-graduates. Sooner or later, this is going to pull down the growth of India's it services industry. Therefore, it makes sense for businesses to engage this issue to serve the interests of shareholders on a longer time horizon.

My second argument is that of "being able to do it". Corporates have the resources and the credibility to make a difference to society and, therefore, must engage society to transmit this difference. It is the same principle that applies to individuals as well. Those who can do something, must do it. Let me illustrate this with personal examples. At Wipro, we have an initiative called "Wipro Applying Thought in Schools", which focusses on bringing about systemic changes in elementary and secondary school education to deliver quality education to every child. The same theme of quality education is being carried forward by the Azim Premji Foundation at a much larger scale in rural education in partnership with state governments across several states. While the former is a corporate initiative, the latter is an individual initiative. Both exemplify the principle of ability to make a difference.

Having demonstrated why businesses should engage society, I would like to share my own belief that expectations from society are not different from one another. The community, in general, evaluates a business on the following seven yardsticks.

One, is the business complying with the law of the land? If the basic notion of compliance with the law is not embedded in the culture of the organisation, it cannot go very far in serving shareholder interest. At Wipro, any wilful violation of law is treated as breach of code of conduct and separation is the only end.

Two, does the business have a sense of "propriety"? While a business may operate within the minimum legal requirements, propriety demands that it is also seen as doing the "right" things. Propriety may seem like a nebulous idea, but I believe "you know it when you see it". For instance, when you discover that an infant formula manufacturer is selling its product through a sales force dressed as nurses, you "know it" as a violation of propriety.

Three, do the product claims match reality? The manner in which a company treats its customers is telling. I remember the case of Intuit when a flaw in its tax programme was revealed. The company apologised and offered full refunds or exchanges. Its quick response, beyond its technical liability, is indicative of a culture that treats every customer with respect.

Four, how forthcoming is the company with information sharing? If the company is not disclosing relevant information to its shareholders, customers and employees, and which have a direct impact on them, it is clearly not serving the interests of its immediate stakeholders.

Five, how does the company handle third-party ethics? It is not sufficient that the company has a sense of propriety; it has to ensure that its business associates-suppliers and vendors-also have a similar sense of what is right.

Mahatma Gandhi espoused "trusteeship" as the core pillar of business. In the ultimate analysis, "trust" constitutes the soul of a business, unites all stakeholders and builds a firm linkage with the rest of society

Six, how charitable is the company? The issue here is not how much or to whom, but how honest is the engagement with the community. I have earlier mentioned Wipro's initiative to provide quality education to every child. The amount we are investing in the initiative every year is not large, but we are using the money strategically to push the right levers to bring about the largest change. We have also forged relationships with individuals and groups who are working outside the government for the same objectives. They are happy working with us as they find our intentions honest.

Seven, how does the company react when faced with negative disclosures? Some companies say nothing when faced with a crisis, some others deny its existence or attempt to cover up the problem, or charge the public with over-reacting. An ethical company would respond immediately even if it believes the crisis is overblown. It would acknowledge the problem and apply appropriate corrections. We have the example of Johnson & Johnson's sensitive response to the Tylenol episode. The test for a company is how well it responds to stakeholders' fears and anxieties, not just whether it confronts the technical reality of the problem. Its responsiveness is a measure of its character.

Are these seven yardsticks by which the society measures any business not the ones that shareholders should also be using to judge the long-term sustainability of the business? I believe that this is indeed so. I see complete alignment between the shareholder's and society's interests. Therefore, I believe that the purpose of any business is to serve the interest of all its stakeholders-shareholders, customer, employees and society at large-and ensure their interests are truly aligned.

To conclude, what gives soul to the business is having a clear sense of the whole system in which business is embedded. It is about understanding the impact business decisions make on the business, on people and on the society around them. Businesses, like individuals, live not for bread alone. They strive to find a meaning for what they do and one meaning can be the sense of contribution to make the world a better place.

Recently I came across this sentence from a well-known writer that "business is becoming the dominant institution on the planet". This is an immense recognition of the role of business in society. But as I have always believed, all recognition brings with it an equal measure of responsibility. Mahatma Gandhi ji has espoused the concept of "trusteeship" as the core pillar of business. In the ultimate analysis, it is "trust" that constitutes the soul of a business. Trust not only unites all stakeholders but also builds a firm linkage with the rest of society.