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Corporate governance and business ethics

Monday, January 26, 2009

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One of the inevitable fallouts of the Satyam saga has been the way almost every private sector organization has been indulging in blowing their own trumpet about how much better they are in terms of corporate governance. The Satyam crisis has become a PR exercise for almost every company portraying themselves as the mascots of clean management and hoping this branding will get them some new projects from the same clients whom they shared with Satyam earlier. During this entire episode unfolding in front of us, the question that is foremost on my mind is, is corporate governance only about having clean account books or does it also involve having impeccable business ethics? Mr. Mohandas Pai of Infosys has been spending more time in TV studios than his office saying how unethical Mr. Raju has been all these years. Now this is coming from a person who belongs to a company whose very foundations are surrounded by dubious business ethics when the great Mr. Murthy walked out of Patni Computers along with its best talent and its client. Was that ethical Mr. Murthy? What makes Mr. Murthy more vulnerable to the accusation that Infosys is based on an unethical business decision is his reluctance to come with the truth about those days of his Patni to Infosys transition. Mr. Murthy also says Infosys will not take Satyam employees because it’s in the interest of Satyam but they will not hesitate to take its clients. What will the Satyam employees do if you or other IT majors take all their clients, who will these employees, cater to?

Another corporate bigwig who has been talking about this is Mr. Kamath of ICICI bank. Now open any consumer grievance web site and check and this is the bank against maximum complaints are registered. The way it employs illegal means to recover its loan by hiring goons and this has even resulted in a person’s death. Is this your definition of good corporate governance Mr. Kamath? According to me this is the most unethical bank in our country today and yet no one talks about this. Infosys and ICICI are the best examples of some great PR. They must have some very talented people working in their PR department. The need of the hour is that all corporations realize that clean governance is not only the absence of any fraud or cooking of account books but also providing your products/services to the customer in the most ethical and transparent manner. Only then these people can boast that they are really different from Mr. Raju. All this brings to my mind a Urdu couplet which goes like this:

Is basti mein kaun hamare aansoon paunche ga

Jisko dekho uska daaman bheega lagta hain …

1 Response to "Corporate governance and business ethics"

Anonymous said :
February 22, 2009 at 6:40 AM
I don't agree with your argument.Raju has tarnished the reputation of India Inc.Its a disgrace to the vibrance of india culture & the glory of our statesman gandhiji.
Headhunting skilled manpower is not unethical.Companies use their brand power,to convert a priced applicant to an employee.Murthy also used his personality,as brand power to get the best of talent along.Everything was transparent.
The supreme court has banned use of crooks to recollect money by bank.Again its a discipline to repay debts on time.Otherwise,one deserved to be chastised.Its pretty difficult to deal with fradulent debtors.That's a different debate all together.
Coming back to Raju's what they have done is a brutal displace of wick gluttony.They has damaged the aspirations of innocent stakeholders - employees,clients,shareholders...

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