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.
Accountability
‘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.
Transparency
‘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.
Integrity
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.
