What You Do When No One Is Watching!

What You Do When No One Is Watching!

“In today’s world, governance is a big issue and some of the big scandals have hurt the shareholders, customers, and employees due to lack of corporate governance in companies.”

Mukund Menon

Every year the Arizona-based Ethisphere Institute publishes a list of around 100 plus companies who are listed as the world’s most ethical companies in the world. This is an in-depth survey and assessment based on the data and information they collect from different organizations. It is interesting to note that in 2016 we had 3 Indian companies and in 2017 we had just one, featuring there.

Companies often misunderstand ethics as following rules. It is not. Following rules is about being compliant since there is no other choice. Ethics is about, ‘what you do when no one is watching’. It is a behaviour, being fair, brave and having the courage to self-disclose.  It is a principle or philosophy that will be held high, irrespective of the loss or consequence of being ethical.

Organizations which imbibed ethical behaviour as part of their philosophy and principles have institutionalized and created a framework that will help every employee in the organization to understand, practice and follow irrespective of their level and location. The experience an individual gets when they deal with an organization defines how ethical and deep is the culture of the organization.

A few questions that arise are –

  1. How do we create one? It is not only through communication from the top down or displaying posters alone. It is more than that. First of all, does the company have ethics as part of their philosophy and is there a compliance and ethics program in the company.
  2. Next would be to define and determine if it applies to all from top to bottom of the organization irrespective of which role or office they hold?
  3. The third is the company’s contribution and responsibility to being a good corporate citizen and how seriously the company takes it without being pushed or mandated to do so?
  4. Fourth is to look at the corporate governance of the company from a company’s law perspective, board management; how do they manage their business, books of accounts and various other components of the company?
  5. Lastly, one of the most important is the quality and credibility of the leadership in the company, its reputation that it enjoys with the shareholders, customers, community, and employees as a reflection of their experience with the company.

“Companies often misunderstand ethics as following rules. It is not. Following rules is about being compliant since there is no other choice. Ethics is about, ‘what you do when no one is watching’.”

International Paper (IP) is being consistently listed by the Ethisphere Institute as World’s Most Ethical Companies. In IP, ethics is part of IPWay, which is ‘Doing the right thing’ as the core of ethical culture. A dedicated group is focused full time on managing the ethics and compliance framework worldwide with compliance officers in different parts of the world.

There are more than 25 policies around ethics, whistleblowers, empowering anyone to make a complaint or observation if they find anything unethical that will be thoroughly looked into.

In the last decade, we have seen several scandals in the corporates. One paved way for stricter corporate governance is Satyam Computers followed by several other companies. There were board level conflicts between the founders, board of directors and CEO of companies over compliance and ethical way of doing business. The government has made stricter corporate governance laws and there is a lot of visibility and control compared to earlier years. The board of directors is now held responsible for compliance and ethical way of running a public limited enterprise.

Some of the organizations over a period of time become institutions, not because they have great products or they are big in size. It is what they stand for as an organization and how they conduct their business at all levels. It brings pride, trust, transparency, and sustainability at the workplace.

In every scandal or issue, it is interesting to note that, more than the person who was unethical, the person who corroborated didn’t have the courage to stand up or push back. They were mere bystanders or the company didn’t give them a framework to seek justice and still be protected for their action.

Most of the multinational companies that have an office in India follow global ethical standards since their parent companies do. They want to make sure that they keep the credibility & trust to ensure nothing will deter their reputation globally.

The cost of being ethical is lower than being unethical. Eventually, non-compliance or a fraud can bring the organization down and it will become an irreparable damage. We are witnessing that the current generation believes in transparency and is bold enough to challenge the status quo if anything is done illegally. There is growing activism within organizations, public and country to bring down corruption, be more transparent, ethical and has a sense of right.

In the current age of social media and digitization, the access to information is faster and networked. The informal networks are stronger than the normal channels of communication. It’s time companies in India are not merely becoming compliant to the laid out norms, instead, they follow a fair and ethical business code of conduct and empower people to be ethical and have pride in what they ‘practice’.

Indian corporates have to be at par with global companies and being ethical brings a lot of credibility in the global markets, gains global customers, hires diverse employees across the world, has more shareholders invest in the company and truly sets being a global player in a sustainable fashion.


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