More than a hundred years ago, in the first decade of the 20th century, Mahatma Gandhi had told business persons about building and leading an ethical and profitable enterprise. This he demonstrated through his own life and work of a lifetime offering accessible approaches between the comprehensive and fragmentary. Mahatma Gandhi had said in 1931 while addressing business houses that voluntary discipline is prerequisite for corporate freedom. This remains true even in today’s corporate world aspiring to establish good practices in corporate governance.
In the year 1927, Mahatma Gandhi advised top industrialists GD Birla and Purushottam Das Thakurdas to establish an association of business organizations in India known as the Federation of Indian Chambers of Commerce in India. In his address in the 4th AGM he said,' the industry should regard themselves as trustees and servants of the poor...' by collectively working for the good of the people.
In the 21st century “Corporate Governance” includes all the activities involved in governing corporations. Corporate Governance takes place on four interconnecting levels: Systemic, Intergroup, Interpersonal and Personal governance. Every one of us, regardless of our role and status, is involved in one or more of these levels. If all the government and governance systems and the people in them are working well, in a perfect world, business can be conducted smoothly, fairly, honestly, without hitches for the general good of all. It is a society in which trust is taken for granted. There are many boards, companies and responsible investors that make a positive difference. However, as we all know, the world is far from perfect.
Good governance enables sustainable wealth creation whereas unethical governance erodes everything that enables decent sustainable living for the common good. Poor corporate governance, usually through a combination of incompetence or criminal or corrupt practices, causes the eventual long-term destruction of whole communities and countries. Boards of directors are responsible for the corporate governance of companies. The legacies they leave behind will determine whether our children live in a healthy or unhealthy world. The quality of board performance makes a huge difference as the focus should remain on ethical behavior including accountability, transparency and integrity.
The world’s economic experience in the first decade of the twenty first century demonstrated that far from being optional in business, let alone incompatible with profit sound ethics are integral with the process of commerce and are essential to sustained profitability.
Mahatma Gandhi’s life and work as a transformational leader offers inspiration and guidance to the modern and aspiring business leaders in building and leading ethical and profitable enterprises. For this reason Mahatma Gandhi comes out as the most powerful motivator who had mastered the elements of personal leadership and institutional management and formulating a strategy for breaking out of conventional thoughts, outworn traditions and received wisdom. Mahatma Gandhi could have told any business person this very thing a hundred year ago during the first decade of the twentieth century.
Mahatma Gandhi measured all decision against truth, injustice, violence, disparity, favoritism and was able to make decisions governing the collective life that is a company and other enterprises. Certain core values that he had practiced and lived accordingly are transparency, accountability and integrity amongst many others.
‘A leader is only first among equals’ - Mahatma Gandhi
The essential unity of mind, word and deed was Mahatma Gandhi’s simple definition of Truth. He practiced what he advised others to do. What appeared to others as a difficulty was natural to him. Such resolve gave him strength to perform acts which had wide symbolic resonance.
Accountability in the public sector is broader than in the private sector (Ole Ingstrup and Crookall, 1998). In the private sector, everyone in the company is accountable to its board. The public sector is also accountable to a board of sorts: the minister, cabinet and legislature. But the public sector has additional accountability to its employees and to its customers, the citizens who use the services – as well as to its non – customers, the citizens who don’t use the service.
Mahatma Gandhi had also advised to the business and other enterprises that ‘A customer is the most important visitor on our premises. He is not dependent on us. We are dependent on him. He is not an interruption on our work. He is the purpose of it. He is not an outsider on our business. He is part of it. We are not doing him a favour by serving him. He is doing us a favour by giving us an opportunity to do so.’
It is a different kind of accountability, more subtle and indirect. Therefore, in general accountability for performance and the obligation that public functionaries (elected and appointed officials) have to give a satisfactory explanation over the exercise of power, authority and resources entrusted in them on behalf of the public (tax payer). Subsumed with this definition is a myriad of legal, oral and ethical obligations that come with the occupancy of any public office (Sarji, 1995). Accountability is therefore an ethical virtue, since ethics concern principles and rules that govern the moral value of people’s behavior. Improving ethics is crucial to enhancing accountability and vice-versa.
In all the organizations Mahatma Gandhi was associated; he took care not to take funds disproportionate to its needs. He made the public activity self-sufficient, bereft of debt and accounted for every expenditure. He insisted on accepting valid criticism, had the courage to accept his mistakes publically, avoided the habit of exaggeration and reformed colleagues. Today, many of these may be common rules, but he was a person who was setting up new values in society. His leadership can be seen in such measures too.
‘Let hundreds like me perish, but let the truth prevail, but let the truth prevail. Let us not reduce the standards of truth even by a hair’s breadth for judging erring mortals like myself’-Mahatma Gandhi
Mahatma Gandhi understood Truth in simple terms,’ speak what you think and act in accordance with your speech.’ This simple definition of truth is his testimony of his transparency. This is what we see in his personal life as well as in his public life. He practiced what he preached and set an example for others to follow. Now, in the first half of twenty first century, the metaphorical extension of the meaning a “transparent” object is one that can be seen through. With regard to the public services, it means that holders of public office should be as open as possible about all the decisions and actions they take. They should give reasons for their decisions and restrict information only when the wider public interest demands it (Chapman, 2000). Radical transparency in management demands that all decision making should be carried out publicly. Therefore, transparency promotes accountability and provides information for citizens about what their government and its agents are doing.
Mahatma Gandhi’s honesty and transparency made him admit all his in- experiences, his follies and his fears without hesitation and fear. The unity between means and ends made him strive for a nonviolent mode of arriving at truth. The harmony between all aspects of his life made him insist about the need for the moral values in all the realms of life.
Mahatma Gandhi had said that ‘A leader is useless when he acts against the prompting of his own conscience’
Integrity is one of the most important and oft-cited of virtues. The concept of integrity has to do with perceived consistency of actions, values, methods, measures, principles, expectations and outcome. When used as a virtue, term “integrity” refers to a quality of a person’s character. Some people see integrity as the quality of having a sense of honesty and truthfulness in regard to the motivations for one’s actions. Persons of integrity do not just act consistently with their endorsements, they stand for something: they stand up for their best judgment within a community of people trying to discover what in life is worth doing. Some commentators stress the idea of integrity as personal honesty: acting according to one’s beliefs and values at all times. Speaking about integrity one can emphasize the “wholeness” or “intactness” of a moral stance or attitude. Some of the wholeness may also emphasize commitment and authenticity. In the context of accountability, integrity serves as a measure of willingness to adjust value system to maintain or improve its consistency when an expected result appears incongruent with observed outcome. Some regard integrity as a virtue in that they see accountability and moral responsibility as necessary tools for maintaining such consistency.
Mahatma Gandhi accomplished any given task with honesty and hard work. Once a decision was made he gave his all to it. From June 24, 1884, from the age of 25 years his decisions which were personal acquired a public dimension. His energy became the power of the Indian community. The individual was transformed into a public person. He had intense sense of self-respect and a matter of self-respect became the challenge of the self-respect of the community. The characteristics of a moral leader manifested in him due to his integrity.
The new age expert Halfon (1989) offers a different way of defining integrity in terms of moral purpose. Halfon describes integrity in terms of a person’s dedication to the pursuit of a moral life and their intellectual responsibility in seeking to understand the demands of such life.
Mahatma Gandhi faced many times the very problem of balancing in decision making but he had the courage of conviction which is one of the keenest tools for good governance. He used to act on his intellect through introspection and questioning. His entire life demonstrates that the future progress requires both preparedness for failure and the strategy for recovery. He had advised that true satisfaction lies in the effort than in the achievement.
For Mahatma Gandhi the cardinal virtue was fearlessness. If you learn that, he declared, ‘nobody would be able to keep you down. People can be forced to do anything, but they cannot be forced to obey willingly. He advised his followers to regards any institution or enterprise in which they were involved as a family, in the sense that each member has his own life and his own role to play, yet all are united in the commonwealth.
In the end, the business leader must think and act with the wellbeing of every stake holder in his mind. This may mean, sometimes, making unpopular decisions departing from perceived wisdom exercising judgment and discretion in carrying out their official duties. Ethics certainly is a part of this corporate fairness of mind, but so are the other values. Formulating and living up to the sound core values is the commitment to truth, after which Mahatma Gandhi observed, ‘nothing more need to be said, truth always triumphs… Truth always wins.’
The path that Gandhi took is open to all those willing to adopt his principles and dedication.