SINGAPORE - Bringing about change is a long drawn-out process. Among those who would know that well is Professor Klaus Schwab, founder and chairman of the World Economic Forum.
As a young business academic in 1971, he penned the notion of "stakeholder capitalism" to bring it into mainstream thinking.
In essence, it is a form of capitalism in which companies do not only optimise short-term profits for shareholders, but also seek long-term value creation, by taking into account the needs of all their stakeholders and society at large.
The pandemic gave that notion a new urgency, drawing attention to the state of "fragility" in different societies and showed that people expect more from governments and businesses, said Prof Schwab at this year's virtual Davos Agenda week, which is being attended by more than 1,500 leaders from business, government and civil society.
"They want not just material benefits but security, for example, in terms of health services," he said.
The coronavirus crisis has shown that we have to pay more attention to the well-being of people. A mindset change is essential if we want to move from a world that is based on material objectives like gross domestic product to one that is more conscious of the well-being of people, he told the audience.
The theme of stakeholder capitalism is one of the key topics being discussed over various days of the forum. It coincides with the release of Prof Schwab's book titled Stakeholder Capitalism: A Global Economy That Works For Progress, People And Planet.
The existing economic systems of shareholder capitalism and state capitalism led to tremendous economic progress over the decades, but it also led to widespread inequities, according to an article published on the forum's website.
While shareholder capitalism is dominant in many Western societies, state capitalism is prominent in emerging markets.
The two systems "led to rising inequalities of income, wealth and opportunity; increased tensions between the haves and have-nots; and above all, a mass degradation of the environment", notes an excerpt. Stakeholder capitalism addresses the shortcomings of both the systems, it states.
The notion got a further boost at this year's Davos Agenda meet as 61 global business leaders committed to adopting Stakeholder Capitalism Metrics that would signal their commitment to working for the well-being of societies, and not just shareholders.
"Business has a very important role to play," noted Mr Dan Schulman, president and CEO of Paypal, during a panel discussion.
"(The notion that) profit and purpose are at odds with each other inside of businesses is ridiculous. The two go hand in hand," he said.
Paypal joined 60 other multinational corporations which committed to embracing the metrics that will measure their long-term enterprise value creation for all stakeholders. Several of those companies have strong footprints in Asia.
Explaining why he became a signatory, Mr Anand Mahindra, chairman of India's Mahindra Group, said it would be in the interest of everyone "to grow businesses sustainably".
The biggest growth opportunity for companies comes from serving the bottom of the pyramid and business should promote the economic prospects of as many people as possible, he remarked.
The metrics entail a set of universal, comparable disclosures focused on people, planet, prosperity and governance that companies can report on. Some of the things signatories will need to disclose are greenhouse gas emissions, pay equality and board diversity.
The metrics were developed by the forum's International Business Council in partnership with the Bank of America, Deloitte, EY, KPMG and PwC over the past two years.
Still, there are those who are not convinced that stakeholder capitalism is the way forward for all economies, with some arguing that it is still evolving.
For now, speakers at the forum drew attention to the need to get over the pandemic.
Among them was Ms Kristalina Georgieva, managing director of the International Monetary Fund.
"What we are watching is 3Rs," she said.
"The race between the mutating virus and vaccines. The resolve of policymakers to continue to support the most vulnerable parts of the economy - the young people, women and low-skilled workers - so that they can get through the crisis and businesses undertake a big transformation to ensure capitalism that works for everyone.
"For us, it is important that we see a future that is green, fair and inclusive (with) a job for everybody."
The third R would be "a revitalisation of global cooperation", she said.
"Unless we work together, we won't get to the other side of the crisis."
Signing up for stakeholder capitalism
Here's a list of multinationals that committed themselves to stakeholder capitalism metrics.
Accenture; Adecco Group; African Rainbow Minerals; Allianz; Banco Santander; Bank of America; BBVA; Boston Consulting Group; bp; Clifford Chance; Credit Suisse; Dell Technologies; Deloitte; Deutsche Post; DHL; Dow; Eni; Ecolab; Ecopetrol; Equinor; EY; Fidelity International; Heineken; HP; HSBC Holdings; IBM; JLL; Kearney; KPMG; Mahindra Group; Majid Al Futtaim; Mastercard; McKinsey & Company; Medtronic; Mercuria Energy Group; Mitsubishi Corporation; Mitsubishi UFJ Financial Group; Nestlé; Novo Nordisk; Palo Alto Networks; PayPal; Publicis Groupe; PwC; Reliance Industries; Repsol; Royal DSM; Royal Dutch Shell; Royal Philips; Salesforce; Schneider Electric; Siemens; Solvay; Sony; Sumitomo Corporation; Sumitomo Mitsui Financial Group; Suntory Holdings; Takeda Pharmaceutical; Total; UBS; Unilever; Yara International; Zurich Insurance Group.