Why the Business of Doing Good Cannot Be Business as Usual: In Conversation with Behavioural Economist Sutapa Banerjee

For years, businesses have been asked to do more than make profits—from advancing sustainability and inclusion to addressing social inequities. But what does it actually take to turn responsibility from an obligation into meaningful action? In her book, The Business of Business is (Not) just Business (HarperCollins, 2026), Sutapa Banerjee brings together business leaders, policymakers and practitioners to examine this question through the lens of behavioural economics. Reader’s Digest India sat down with Banerjee for a deep dive on why good intentions are not enough, the power of experimentation and collective action, and how businesses can become more effective agents of social change.

Reader’s Digest India: Every book has an origin story. What made you feel this book was an important conversation to have?

Sutapa Banerjee: So, the concept of business responsibility has been around for a while. But to me, it has largely been a lecture—a bhashan, a process of trying to tell people what to do—and it has often worked in silos. What has not been questioned enough is the ‘how’: how do you actually achieve what you want, whether from the policymaker’s side or the business side? Simply telling people what to do doesn’t work. As in most things, execution and knowing how to make something happen are far more important. I don’t know of many books that have been written in that space.

The second part came from my own journey. I had been on the financial-services front in my full-time employment, where I ran businesses within banks. I then stepped away from that and went almost straight into academia for a considerable period. I did a fellowship at Harvard and came back and taught, among other things, the subject I had studied there: behavioural economics and its applications. I found a lot of science-based tools, backed by empirical evidence, that could offer a huge amount to businesses, policymakers and others. I don’t think those tools have received much salience in India. Those were the two primary motives behind the book.

You make a compelling case that businesses can be powerful agents of social change, yet many people remain skeptical of corporate motives. What convinced you that business could be part of the solution?

Having been on the business side, I know that trillions of dollars go through businesses. And public good cannot be something that is the sole responsibility of policymakers or nonprofits. How you run a business determines how you serve all your stakeholders. So, to me, the question is almost rhetorical: the business of business cannot be only business, to rephrase Milton Friedman. Contextually, it may or may not have been right at that point in time, but I thought it was high time it was rephrased.

A path towards that has already begun. India is a heterogeneous country, and there are entities, such as the Tatas and other, that have done good before it became mandatory to walk that line. But my emphasis is on how you create a compelling motive to ensure that all businesses move in that direction, irrespective of their individual motives. The profit motive necessarily has to be there, because without a business surviving, how can you do anything? To me, the two have to exist in tandem: doing public good as well as being profitable. This book is an attempt to show, or at least move the discourse towards, how that can happen.

What makes the book’s approach different, especially when businesses are already moving towards ESG and greater responsibility?

There is no question that the regulatory glide path has begun, with companies above a certain net worth and revenue required to provide independent assurance of their disclosures. But responsibility is also in a company’s long-term interest. The Volkswagen emissions case showed how quickly corporate failures can hit share prices and affect consumers, investors and communities—not just shareholders. 

Businesses clearly need to toe the line. The question is how: Do you use only legislation? Only incentives? Or do you use behavioural economics, tools and frameworks, or all of them in a certain combination? The aim is to create a compelling motive for all businesses—not just those inclined to do good—to move in that direction. The challenge now is to hasten that journey and ensure responsibility is not reduced to box-ticking or circumvented. 

What are the biggest gaps preventing that journey from moving faster, both from a policy and business perspective?

If you look at the format of the book, there are many problems that are impacted by business and that business impacts in turn. I have chosen only three—sustainability, inclusion, and social norms and stereotypes—deliberately because those are things that I know something about. 

The idea is that you cannot work on any problem in isolation. You need to bring all views together to look at a problem in all its richness and nuance. That may have happened in a fragmented manner, but I have not seen it happen in the concerted way it ought to happen.

So, to me, the first thing was to bring everybody’s views in rather than state homilies and lectures while staying within your own silo. Mine is one small attempt to show that if you look at the same problem through multiple lenses, you see it more comprehensively and your decision-making becomes much more robust. That is the big gap.

Behavioural economics runs through the book, but remains unfamiliar territory for many readers in India. If you could persuade business leaders to adopt one behavioural principle, what would it be?

You asked for one, but I will give two because I think both are equally important. First, behavioural economics is cross-disciplinary, sitting at the intersection of economics, psychology, sociology, evolutionary biology and, increasingly, neuroscience. Its power lies in asking how to make a rule or policy genuinely adoptable.

But this is a social science. When I talk about empirical science and empirical evidence, it is still contextual. Within your business, or for a policymaker, you need to pilot something, test it, involve the right stakeholders, look at the results and have research entities that know how to measure them. It is probabilistic. You look at what has worked elsewhere, apply it in a pilot, test and measure it, and then scale it using the learnings. Everything has to be data-driven in that sense. That is the first principle: an experimental approach, a behavioural lens on business decisions. You do not assume that you already know. You look at evidence, test it, measure it and learn.

The second principle is conformity bias, or the herding instinct. The herding instinct exists for good reasons: it helps keep us alive and negotiate the world. But it also means that, when making big decisions—whether about investment, a new market or something else—we tend to conform. We do not like to be the odd one out.

There is a lot of evidence for this, and it is known in the business world, which is why you have independent directors on boards. It is also known to policymakers: bringing together a diverse group of people with independent views makes a decision more robust. That is exactly what I have done in the book. I have brought a cross-section of views together. The form of the book mirrors its content.

The problem is that even a diverse group may not give independent views because there are too many forces that make us conform. Our brains are wired to conform. Social dominance, hierarchy, the chairman of the board saying something, the promoter saying something, the fact that you earn your living in the company—all of these can influence whether you give a contrary view. Yet it is extremely important for promoters, founders, CEOs and board chairs to elicit those independent views. If you cannot rewire the brain quickly, you can rewire the environment. The important thing is to understand what conformity bias is, why it exists, and, most importantly, for key decisions, how you stop it from coming into play. What design interventions do you need? It depends on how key the decision is, how irreversible it is and how consequential it is.

These are the decisions I have chosen because they impact society, not just the business or the market. If there are only two things people take away from my book or talks, one is this: conformity bias is at the root of a lot of issues, problems and scams that have happened again and again—the desire not to be the odd one out, the wish to be part of the crowd and the tendency to agree quickly.

Your contributors argue that people do not make decisions in isolation; they are shaped by the systems around them. How should that change the way we think about responsibility?

The way I like to think about it is that, just as your question operates at multiple levels, so does the book. When I take a decision that impacts me and I know it has effects beyond me, to the extent that I am impacting other people, I need to be responsible for that. The law may hold me fully responsible today, or depending on the degrees of separation, it may not. But in the context of the book, where we are talking about large societal decisions and multiple stakeholders, all are equally responsible. Accountability is equal. I cannot tell somebody to go ahead and do something when the entire ecosystem is not ready for it. That is also why you need all of them to come together. It has to be cross-sector collaboration with the right stakeholders.

But simply saying that a multi-stakeholder approach is necessary is a motherhood statement. Who are those stakeholders? They differ according to context. The framework may be similar, but going a little more granular is important. So I would say they are all accountable in different degrees and in different contexts. The more interesting question to me is that you need to come together to move forward. I do not pretend to have the solutions. The book is not prescriptive. My attempt is to move the discourse in a certain direction.

Of the difficult issues the book addresses—from climate responsibility to women’s economic participation and entrenched social norms—which challenge is India most dangerously underestimating today?

To me, and this is a personal view, it is the third section of the book, which is on social norms and stereotypes. A lot of the work in the book brings together how people behave in groups and how companies behave in that ecosystem. In inclusion, I looked at the issue through a slightly wider lens, but there is a large concentration on gender, very deliberately, because it is the most in-your-face example. Women are almost 50 per cent of the population, and yet when it comes to the workplace, the numbers are still abysmal. The answer to that paradox is really social norms.

There have been entrenched social norms in other countries too, and people have been able to get out of them. I am not a believer that it will take centuries for social norms to gradually erode. There are ways and means of reasoning it, and it has happened within our own country as well. These changes have been studied almost like randomized controlled trials, where one village has progressed while neighbouring villages have not.

Take the Kolkata Metro as an example. I have not visited Kolkata for quite a while, but it is where I grew up. I remember when the Metro was first introduced. The city was as littered as any other city in India, but suddenly that one place became something that everybody felt pride in keeping clean. It was not necessarily because of penalties. It was conformity bias being used for good. All Indians, when they go to Singapore, suddenly become extremely careful about what they put where. It is not just deterrence; it is also that nobody else is doing anything else. It is all clean. That plays out across the board.

Is there a particular social norm that you think requires especially immediate attention?

Gender, without a doubt. We are doing bits and pieces in a fragmented manner, but it does not come together. If you want to make inclusion work within a business—and you can extrapolate that to society—it needs to be built into the company’s key performance indicators. It cannot be peripheral. It needs to be driven by the founder and CEO and be part of everybody’s KPIs. Make it pivotal and central, with equal weight to ROI and profits.

You have to intervene to get women into spaces where they are underrepresented. We have seen it with women working night shifts and in factories, and with women entering the Army and combat roles. If something is a typical male bastion, you need to storm that bastion because it can have ripple effects. Within a company, take people from HR and administration, put them in sales, make them sales heads, and put them in P&L and leadership roles.

I sit on the board of a company where I am in my sixth year. It started with a little more than 10 per cent women; today it is over 40 per cent, with the region contributing the largest amount in sales driven by women. It is possible. The chemicals industry, too, is often seen as not being an industry for women. That is exactly where you need to do it. Sales and P&L roles, which are typically thought of as stereotypically male, are where you need to reverse the pattern.

Many inclusion measures still feel tokenistic. How do you break the deeper ‘us versus them’ cycle?

Any marginalized group is primarily marginalized because of a historical accident, and whoever is in power will try to perpetuate that. You establish norms and ways in which you will perpetuate them—you obviously do not want to give them up. When the going gets rough, that becomes even harder. If jobs are disappearing, the question becomes: shouldn’t the jobs be reserved for men? It is almost like entitlement, because you have been entitled all your life, so it is not going to go away easily. The point is not to have incoherent rage about it, but to act smart. 

When women came onto boards, it may have looked like a token change. Sometimes you will have a maverick who initiates change because that is what he or she believes in. Those mavericks change everything. They move away from the idea that the existing structure is like a funnel and people will slowly rise to the top. They say: let's change the top. Let us change the board and the senior leadership team and see what happens.

That is phenomenal because it leads to what I call role modelling. What a young, ambitious woman sees tells her what is possible. If she sees three women at the top, she thinks that if she does well, she can reach them. If she sees none, she may decide that some other sector is better because this one does not seem to offer that path.

So the only way to break that is by not waiting for a larger number. Even one woman on a board, even 33 per cent reservation at a panchayat, is worth its while because it spawns more. Biases exist in everybody, both men and women. What you see, you absorb. You need to make that first gesture and then move from there to something else.

That is what happened with business-responsibility reporting on women on boards. It started with one woman, and now there is advocacy to increase the number further. Each intervention has a context: you see how it works, learn from it and quickly use that learning to scale it.

Every compilation is an act of curation. What principles guided your choice of contributors and the flow of the book?

Apart from diversity, two things were important. Naturally, I needed people I largely knew because I needed perspectives that I thought were valuable. They were people who were experts in their domains or ran businesses themselves and had an interesting point of view to offer.

The second was that, when you are doing something like this, naturally all of us like to say what should be and what should happen. I had to push back against that. I would send it back and say: no, what you are talking about is what should happen. What I want to know is: why did you do what you did? What enabled you to do it? What motivated you? What would have motivated you to do much more? What came in the way? Are those deterrents still there? And why are others not coming to the fore like you did and doing more of what you did? Those were the questions I needed contributors to answer. In some cases, it happened in the first draft and then needed only a minor revision. In others, I had to push back repeatedly. 

The one risk I ran with—and it is the risk of any compilation—is that I knew these contributors held interesting and valuable perspectives, but I did not know the quality of their writing. Some are naturally good at writing; some are not. I was willing to accept laboured language because what they had to say was more important to me than how elegantly they wrote. To a certain degree, the publisher was good on the editorial front and helped me bring the material into a readable format.

Ten years from now, what tangible change would make you feel the book has fulfilled its purpose?

One of the things I think is going to happen, and hopefully the book hastens, is a shift in how we deal with uncertainty. Market cycles have become shorter, and fairly random unknowns have been happening—geopolitically, with COVID and so on. The amount of uncertainty has increased. It is during those moments that you start to have self-doubt. In traditional companies, there is often a view that you are almost scared to use the word ‘experiment’, particularly as a senior person, because you are supposed to know—that is why you are where you are. That is foolhardy. Experience cannot be a substitute for skill. What worked in a particular environment at a particular time does not mean it will work again, particularly in completely changed circumstances.

That is the reason for diversity, the reason for dissent, and the reason for interventions that legitimize dissent. You need to take a decision and move in a particular direction, but you need to move from ‘I know’ or ‘I think this is the way it is going to be’ to stress-testing what you think you know. That means experimenting, measuring and running pilots. Instead of doing something across the organization or applying one policy everywhere, do it at a smaller scale, run it in a particular place, and then expand it.

This data-driven approach also necessitates a mindset shift: From ‘I might as well jump onto this bandwagon’ to "I do not really know what is true. I do not really know what is going to happen." Behavioural economics is about probabilistic thinking. I am deciding to go this route because I think there is a chance it will work, but then it might not. What do you do about that? You need agility. You need guardrails. You need a Plan A, Plan B and Plan C. If that happens, that is a way of thinking more than a set of behavioural nudges. I think that would be really interesting, and hopefully the entire ecosystem and environment is pushing us towards it.

Do you think the next generation of leaders will naturally be more comfortable with this kind of uncertainty and experimentation?

Yes, because they have, at a fairly young age, already seen completely strange events happen before their eyes. COVID is one of them. They are therefore more likely to have grappled with uncertainty. There is a tenet in behavioural sciences—‘what you see is all there is’—which I use in the book as well. If you have seen a very stable world in front of you, that is your view of the world. If you have seen a very unstable world, you learn to cope and grapple with uncertainty.

You can see that even in how younger people lead their own lives: they are not necessarily married to one company, they do multiple things at the same time, they do something of their own. It is sometimes the older generation that has problems understanding that. 

The concept of very high-conviction leaders who are career lifes, for instance, has vanished. Some people are still holding on to 1950s-style work culture, and very traditional financial services still hang on to it, while other industries are changing faster. I actually give a lot of weight to the word ‘self-doubt’. When I speak to women, I am sometimes asked whether they should have self-doubt, and I give almost the opposite answer. For different reasons, women may have self-doubt, but I think it can be a very good thing. What does self-doubt make you do? You seek new data. You want more validation. You look at a variety of things and then form a more informed view. You think more deeply and in different ways.

Unfortunately, both in the business world and the political world, we tend to like people whom we think are decisive and can take quick decisions. But in behavioural economics, and intuitively too, the more consequential, key and irreversible a decision is, the more time you need to arrive at an informed view. You validate, take independent sources of data, consult more people and make the decision-making process more robust. The probability of taking the right or more optimum decision becomes higher, even though you will never know for sure. And you build guardrails and different plans for anything that might go wrong in the process. That, to me, is the kind of leader you would need for the world or for individual businesses.

About: Sutapa Banerjee is a business leader with over three decades of experience spanning financial services, corporate governance and behavioural science. She began her leadership career at multinational banks and was recognized among the Top 20 Global Rising Stars of Wealth Management by the Institutional Investor Group in 2007 and shortlisted for Fortune India’s 50 Most Powerful Women in 2012. She serves on the boards of several leading companies. An Advanced Leadership Fellow at Harvard University, Banerjee has taught postgraduate students at IIM Ahmedabad as a visiting professor, applying behavioural insights to questions of gender and economic participation. She is also an adjunct faculty member in corporate governance at the Indian Institute of Corporate Affairs, an autonomous think tank under the Ministry of Corporate Affairs. 

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