Corporates are undergoing a culture change. First, there is a marked shift from conventional wisdom to strategic thoughts to manage market and sovereign risks for a sustainable business development.

The sovereign risk combines a wide range of issues emerging from business cycle, political cycle and social cycle. In these ups and downs, there is a strategic path that leads to sustainable development.

Despite the economic take-off, business concerns in Pakistan are focused on political instability and the rule of law- constitutional writ and sanctity of commercial contracts.

The business risks are also enormous. Globalization has brought increasing connectivity, competition and contagion, volatile markets, disruptive technology and fast changing rules of the game. Then there are local sensibilities, emerging from unemployment, low literacy rate and poor purchasing power.

But many a strategic investors profit from all kinds of risks though there are quite a few corporate failures. They argue that the higher the risk, the higher the rewards. Every crisis brings an opportunity. Mass poverty offers enormous scope for economic development and business growth. It is the industrial economies that suffer from saturation.

To manage risks, the corporates are agile to pick up new, creative and innovative ideas to sustain business and develop the emerging market. The changing corporate culture perhaps can best be illustrated as to how the chairman of a leading industrial house takes pride in the fact that he is recognized in the market not only by the wealth that he controls but also by the intellectual input that has gone into the making of his business empire.

It is a professionally managed outfit with family members constantly upgrading their business skills. A conference organized by the Management Association of Pakistan was recently informed that all successful joint ventures of the group were managed by a combination of business statesmanship of multinationals, with worldwide experience, with local business statesmanship based on local know-how, know-who, experience and expertise.

On the global stage, the most admired companies are those which have the highest ranking in social responsibility. Introducing the new logo of his company, the president, BASF, South East Asia, Dr Harald Lauke told his business executives how to combine "business successes environmental protection and social stability". He said business development has to be sustained despite the Iraq war and the war on terror.

Big corporations attract the best minds and hands from a variety of educational and cultural background. Though secure, government jobs are not attractive for the best talents.

Not only that. Many professionals with masters degrees in business administration change their jobs as often as they change their cars. They prefer life-time employment in different companies to life-time jobs in a single company.

The corporate umbrella for employees is fast being withdrawn. There is also a continuous trimming of corporates to keep business outfit fit for growth. The best corporates impart entrepreneurial skill to their executives and staff. Business units of any modern firms have to establish their financial viability.

Yet, the concerns on unemployment and poverty arising out of shrinking government and trimming corporations are yet to be tackled.It raises the issue of social stability. Corporate social responsibility assumes added significance as the private sector is in the driving seat of the economy.

Some people recall the observations of the noted scholar and economist Donaldson: " All productive organisations can be viewed as engaging in an implied contract with society."

Corporations have been bestowed by society... with authority to use and own land and natural resources. In return, the society has the right to expect that productive organizations will enforce the general interests of consumers and employees. Society may expect that corporations must honour existing rights and limit their activities to accord with the bound of justice."

Capital-intensive investments on sophisticated machinery and plants create enormous wealth but few jobs. So, the concept of community development is acquiring new dimensions.

SMEDA is carrying a survey to assess the need of inputs of nearly half a dozen big companies like Engro and Fauji Fertiliser located at Dharki which can be met through cheaper local production.

Once that has been identified, efforts would be made to persuade all the units to support local vendor industry in their area by making purchases from them and developing local skills. Engro vice-president Parvez Ghias says that his company had taken this initiative and is working with Smeda on this project.

So far, big companies have focused on social development like opening of schools, dispensaries, sports facilities, provision of water, etc. If they are able to develop a vendor industry in the rural areas where their plants are located, they would help generate employment.

Engro also plans to become a participant in the UN Global Reporting Initiatives (GRI). The GRI indicators cover environmental, social and economic issues and the impact of a company's operations in these areas. The reporting firm indicates where it stands in GRI indicators and how it plans voluntarily to improve its social ranking. There is no compulsory compliance.

So far, only some multinationals have been reporting to the UN but no Pakistani company has taken the initiative, says Parvez Ghais. But the corporate executives are divided on the issue whether poverty is a corporate issue.

Some believe that the companies should serve their shareholders and pay their taxes. They forget that tax revenues are spent on bailouts of banks and corporates at times of economic slump or subsidies are offered to a wide range of export-oriented industries, leaving very little for the welfare of the majority of the population.

Others believe that poverty is a corporate issue when the nation's production facilities are essentially located in the private sector.