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Posts Tagged ‘Corruption’

Can a business be run without resorting to corrupt practices? This was one of the several questions attempted to be answered by management experts at a recent seminar organized by Sri Aurobindo Center for Advanced Research at Pondicherry (SACAR) at Pondicherry in India.1 Inaugural Session IMG_2266At every step, a business faces a choice – whether to indulge in corrupt practices to get what is its legitimate due, or face hardships and bottlenecks in meeting its obligations towards such stakeholders as its suppliers and employees.SACAR Dr ReddyThere are no simple answers to this vexed issue. However, there could be innovative ways of handling such challenges. A strong anti-corruption image helps. The conviction, that this is just not done, takes time to radiate to those who place such a demand on the business.

Another way to face such a challenge is to politely decline meeting an illegal demand. Instead, an offer to fund a legitimate activity which falls in the realm of CSR and shores up the image of the official/department concerned could get readily accepted. This could be by way of toilets being set up in schools, trees being planted and maintained on a main thoroughfare, or by investing in a scheme of social benefit.

???????????????????????????????The conviction emanates from an inner strength and a resolve to ensure that the dealings of the corporate concerned remain above board. Once adopted and marketed as a strategic choice, the business gains in the long-term – by adding value to its own brand equity and by gaining public trust. In turn, this could be leveraged to command better margins in the market place and also to attract better talent at a lesser cost.???????????????????????????????According to a business captain who addressed the participants at the seminar, the core mantra is to not to readily give in to illegitimate demands and to do simply what is in one’s control. The path of righteousness is not easy to tread but can be adhered to successfully if the top management has the necessary conviction. Decision making based on good values and an inner connection always helps a business person to strike this delicate balance in its operations.

Speakers at the seminar also touched upon VUCA and the increasing rate of change in the business environment. Studies which have proved that businesses which adhere to the basic values of honour, truth, beauty, justice and love were quoted do better in the long run. Participants were exposed to leadership lessons drawn from such Indian scriptures as Ramayana, Mahabharata, Thirukkural and also from Sri Aurobindo’s works.???????????????????????????????The value of meditation and resultant control of one’s mind was demonstrated. A panel discussion explained the likely changes in the business environment over the next decade and outlined the leadership and management attributes which would become more relevant in the times to come. The emphasis was on leaders who steer their businesses not only directed by an economic compass but also by a moral one.

The seminar, entitled ‘Preparing Future Business Leaders and Managers: An Inner Approach’, drew an enthusiastic response from business managers, scholars and students alike. It was addressed by Dr. Ananda Reddy, Director of SACAR, Mr. R. Mananathan, Chairman and MD, Manatec group of companies, Prof R. P. Raya, Dean, School of Management, Pondicherry University, Dr. Saikat Sen from SAFIM, Prof. Kisholoy Gupta, Mr. J. V. Avadhanulu, Mr. Ganesh Babu and yours truly;  a heady mix of management educators, lifestyle coaches, business thinkers and influencers.

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The new government in India has promised to cut red tape and substitute it with a red carpet. This is a great promise, but one has to wait and see how it actually unfolds. India has a federal structure in place. So, unless states come on board, wannabe entrepreneurs might still be found running from pillar to post negotiating their way through the dense maze of policies, procedures and rules at all levels. A major MNC recently stated that as many as 167 approvals were required before its project could see the light of the day.

The Doing Business 2013 report of the World Bank ranks India at 134 out of 189 countries in ease of doing business. India has questioned the methodology of the World Bank. This could satisfy the ego of some patriots amongst us. But the stark reality is that the costs of setting up and running a business in India are unreasonably high.

One also needs to consider the fact that India’s infrastructure is anything but world-class. There is a mismatch between the skill set available in the labor market and the needs of the industry. Policy framework is inconsistent, giving rise to a sense of uncertainty in the mind of investors. Add to this India’s poor record in enforcing contracts due to legal delays and the tendency to slap taxes on a retrospective basis, and the high level of discomfort experienced by investors can be readily explained.

One of the most serious stumbling blocks to India’s growth story is the widespread corruption. Businesses which are driven by pure greed find this rather handy. But those which stand by business ethics and operate within the paradigm of a value system detest this scenario. The latter surely deserve all the encouragement they can get.

The new government in India would do a great service to the nation by seriously cracking down on corruption. Some baby steps do appear to have been taken, but these do not attack the root cause of the problem. It is good to chase black money stashed abroad. But steps need to be taken to stem the rot at the root level itself.

Here are some steps which could possibly help to curb the growth of the  cancer of corruption:

  • Political funding needs to be brought on a transparent plane. This can only be done if there is a clear message that witch-hunting of businesses, especially in case of a change of regime, would not take place. Suitable changes in India’s taxation laws would also help. Till the time political expenditure remains obscure, red tape would continue to hinder the country’s growth.
  • Bureaucracy performs a critical function. Safeguards can be improved. A well thought-out stick-and-carrot policy can be introduced and then ruthlessly implemented. This would ensure that the tendency of some to seek rent for grant of mandatory approvals is curbed.
  • A strategic policy for use of natural resources needs to be announced and implemented. It is not only about mineral resources but also about India’s rivers, airwaves and other bounties of nature.
  • Real estate sector needs structural reforms. A stronger MIS system is the need of the hour. Uniform rates of stamp duties attracted by property transactions across the country would go a long way in creating a level-playing field. Administering collections and detecting frauds would also become easier.
  • Pushing through DTC and GST would result in better revenues. This would give the government better leeway to reduce taxes across the board. In turn, this would improve Indians’ collective honesty levels.

On their part, businesses also need to do some soul-searching. By raising the bar higher on the compliance front, they could improve their market valuation. Their brand image is bound to get a makeover for the good. In turn, this helps them to attract more business as also more skilled employees.

Once a demonstration effect sets in, the government machinery would also develop confidence and stop viewing them through a jaundiced lens of suspicion. Instead, this would enable the government to go ahead with self-certification in several areas, thereby utilizing its own human resources better.

All of these are bitter pills to swallow. But unless this pain and suffering of chemotherapy and surgery is undergone, the cancer of corruption would continue to thrive. A strong political will alone can achieve this cure of the Indian system.

[Related posts:

https://ashokbhatia.wordpress.com/2014/05/03/a-16-point-agenda-for-the-16th-lok-sabha-of-india

https://ashokbhatia.wordpress.com/2013/04/14/combating-the-cancer-of-corruption%5D

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Bollywood’s take on corruption differs across various time zones. Just as the society has evolved, so has the approach taken by Bollywood on depicting and tackling corruption changed over the past few decades.

In the black and white era of Gandhian simplicity, it was often more about the bad guys being urban gentlemen and the good guys being rural urchins. Movies like ‘Do Bigha Zameen’ (1953), ‘Jagte Raho’ (1956) and ‘Parakh’ (1960) readily come to one’s mind.

Jagte_Raho_1956_film_poster

We have also had movies where the lead cast suffered in dignified silence. The audience was often left with a feeling of disgust towards all those who were shown as corrupt. Movies like ‘Satyakam’ (1969) left us with a fond hope that things would somehow improve in the future. satyakam

Then came the angry-young-man phase. Here, we had the revenge theme. Muscular power ruled and the law of the land took a back seat. The hero, whether single-handedly or along with his buddies, went about killing the corrupt ones with gay abandon. Movies like ‘Deewar’ (1975), ‘Ardha Satya’ (1983), ‘Andha Kanoon’ (1983), ‘Shool’ (1999), ‘Rang De Basanti’ (2006) and ‘Rajneeti’, (2010) typified the violent kind of response to the scourge of corruption.

Rand De Basanti_poster

In some cases, the message was that of joining the system, so as to be able to reform it from within. ‘Yuva’ (2004) represented a treatment of this nature.Yuva_(movie_poster)

Yet another genre in the corruption-related movies churned out by our Dream Merchants is that of comedy. The script presents corrupt practices laced with a liberal dose of humour. The underlying message is serious, but the packaging is satirical. Over time, this mode appears to be becoming more popular.

Here are some of the movies which have successfully attempted to comment upon the issue of corruption in a humorous manner.

Jaane Bhi Do Yaaron

Jaane_Bhi_Do_Yaaro_1983_film_poster(‘Just Let it Pass, Friends’, Kundan Shah, 1983)

A great spoof on the unholy nexus between politicians, builders and media people, with great performances by Naseeruddin Shah and Ravi Baswani.The climax scene which is a rip-roaring mix up of vignettes from Mahabharata and Mughal-e-Azam is a must watch for all cinema lovers. In an irony of fate, both the main protagonists end up going to jail for a crime they merely reported but never committed.

Lage Raho, Munna Bhai

Lage_raho_munna_bhai(‘Carry On, Munna Bhai’, Rajkumar Hirani, 2006)

By re-packaging the teachings of Mahatma Gandhi and interpreting them to suit the present context, the movie gave an effective anti-dote to corrupt practices. Property sharks, blind faith, dating do’s and don’ts, depression arising out of failure – all get treated head-on by the ultimate virtue – truthfulness.

Khosla Ka Ghosla

Khosla ka ghosla(‘Khosla’s Nest’, Dibakar Banerjee, 2006)

How property sharks operate and how a simple family can tackle such issues was brought home in a light-hearted manner in this movie. As a side benefit, the incident of property grabbing brings all the family members emotionally closer to each other.

Welcome to Sajjanpur

Welcome to sajjanpur(Shyam Benegal, 2008)

Shyam Benegal is renowned for having exposed oppression and corruption of different kinds in his earlier works during the ‘parallel cinema’ wave. ‘Ankur’ (1974), ‘Nishant’ (1975), ‘Manthan’ (1976) and ‘Bhumika’ (1977) etc left us stirred and shaken up in the earlier years. All these were very intense and serious movies. In the recent past, he has effectively used satire to convey a similar message. A remarkable transformation!

In ‘Welcome to Sajjanpur’, romance blossoms against the backdrop of corrupt politicians and hapless administrators. How the honest ones get to win in the end gives out a clear message as to how the ordinary citizen can indeed make a difference.

Well Done, Abba

Well done abba(‘Well Done, Dad’, Shyam Benegal, 2009)

How do you handle rampant corruption which makes a mockery of the benefit schemes rolled out by the government? A father-daughter duo, after having failed to get a well dug up with the aid of government funds, report to the police that their non-existent well has been ‘stolen’! What ensues is sheer hilarity. Upcoming state assembly elections ensure the complaint gets heard and acted upon.

Do Dooni Chaar

Do dooni chaar(‘Two Times Two Make Four’, Habib Faisal, 2010)

The movie was basically a hilarious take on the ambition of an ordinary middle class family to somehow upgrade to a four-wheeler. In a crucial episode, the hero, a teacher with modest means, endears himself to us by refusing to accept a bribe to declare an otherwise failing student successful.

Chala Musaddi Office Office

Chala_Mussaddi..._Office_Office(‘Musaddi Goes to Office’, Rajiv Mehra, 2011)

What does a person do when an inefficient and corrupt system declares him dead on government records?! An amusing story of how the hapless person goes about knocking the doors of justice to get his pension and identity restored.

Bhootnath Returns

Bhoothnath_returns(‘The Ghost Returns’, Nitesh Tiwari, 2014)

The nexus between crime and politics was etched out rather well in this movie. To fix mundane problems in a locality – power, water, roads, sewage, et al – a ghost decides to contest an election!

Admiring Bollywood
One admires Bollywood for several facets of its collective character. Other than the ability to handle a serious issue like corruption in a lighter vein, it also has the capacity to laugh at itself. Movies like ‘Rang Birangi’ and ‘Om Shanti Om’ are proof enough.

Bollywood is also secular. It does not matter which religion you believe in – meritocracy rules. Look at the credits of any movie and you would notice the diversity of faiths amongst those who have contributed towards making the movie.

Taking Corruption Head-on!
In most of these movies, the basic premise seems to be that an ordinary citizen can also make a difference to the system. If he/she refuses to pay for services which are his/her right, a change can start happening. Also, there is a strong need to clean up our political system. On this hope, we continue to live!

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The heat, the dust and the vitriol thrown up by the campaign for general elections in India has already started fading away from public memory. Media has had a field day, what with rival claims being made by the contestants in the fray. Quite a few voters have been at a receiving end of a different kind; of freebies, money and liquor. In some pockets, sheer muscle power has been on overt display. Some armchair revolutionaries are disappointed; when it comes to real issues, whether in the realm of economy, diplomatic relations or delivery of public services, very little light has been generated in the past few months.SansadBhavan

The denizens desperately hope to collectively bring in a stable and strong government at the centre. They also realize that it is the right time to set the agenda for the 16th Lok Sabha.

Here are a few things which our new representatives need to consider:

1. Boosting infrastructure across the board, especially in the farm sector.
2. Containing inflation.
3. Giving an impetus to manufacturing, especially to check projected imports of IT products and selected white goods in the years to come.
4. Simplifying investment processes with clear goal posts.
5. Boosting revenue and simplifying indirect taxation by introducing GST in a time-bound manner. Bringing in DTC so as to reform direct taxation.
6. Revamping our definition of growth which should include not only economic growth but also social indicators like the Millenium Development Goals. Eventually, like one of our neighbours, a Gross Happiness Index should become the cornerstone of public policies.
7. Upgrading skill development mission and related programs so as to reap the benefits of the demographic dividend.
8. Instituting Power and Coal sector reforms.
9. Redefining basic principles of natural resource allocation.
10. Judicial reforms.
11. Law and order reforms.
12. Political reforms, especially in the areas of poll funding and decriminalization.
13. Curbing the parallel economy; building sector reforms and rationalization of stamp duties.
14. Implementing women’s reservation in all legislative bodies, public services and institutions. Enabling women’s education, empowerment and safety.
15. Focusing on IT-based enablement of citizens. Building on Aadhar card to improve the delivery of services to citizens. Replacing ‘narrow band’ by broadband. Special focus on the greying population.
16. Restoring the dignity of our legislative bodies.

A heartening feature of the 2014 election campaign has been the higher voter turnout. The aggregate turnout so far in the first 7 phases for 438 parliamentary seats has been 66.20%, significantly more than 57.41% figure in 2009 general elections. It appears that the silent majority wants to register its aspirations more effectively. This is a clear indication that our politicos need to sink their differences and work together for improving the quality of life of all its citizens.

Concerned citizens eagerly await the future contours of their ‘tryst with destiny’ to emerge on the 16th of May, 2014. Irrespective of the shape and composition of the new government which takes charge, a vigorous thrust in the areas mentioned above alone can ensure that India performs better and improves upon its image and stature in the comity of nations.

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If you happen to be a professional to whom the allure of becoming a director on the board of a company is irresistible, here is a confidential note written by the Chairman of an imaginary company to one such aspirant, listing out the unstated terms and conditions of the offer.

From: The Chairman, XYZ Ltd.
To: A wannabe Independent Director

“Dear Aspirant,

I am happy to know that you aspire to be an independent director on the board of our company. Whereas a formal letter of appointment would soon follow, I write to you in my personal capacity to explain the real rights and responsibilities of an independent director.

1. You shall be hired only for your fame, your excellent contacts and your eminence. Your subject knowledge, competence and seriousness of participation in the meetings are important but secondary to the scheme of things.

2. Our company believes that machinations of the management (read “real owners”) are supreme. Our business is run on a quarter to quarter basis. PROMOTIONSAny talk of business strategy, etc, happens against this background. You shall always remain an embellishment on the board and shall conduct yourself with grace and equanimity accordingly.

3. Please appreciate that the Chairman and the President/CEO are advised by the best brains in legal and accounting matters. Their word is final and binding.

4. For the sake of excellent PR, as also to keep our market image shining and bright, the company has a set of clear guiding principles, a sparkling vision document, an exemplary code of conduct, a well spelled-out corporate philosophy, a robust governance framework, a sound CSR policy and a clearly articulated intention of zero tolerance to graft, corruption or sexual harassment. However, based on exigencies faced in the business environment or the seniority of the person involved, the management reserves the right to be flexible in its approach towards enforcing the aforesaid.

5. During your tenure, you may discover some creative accounting practices resorted to by the company. You may come across audit notes which point out the calculated risks we take while planning our direct as well as indirect taxes. You may also discover highly ingenious ways in which we interpret the laws of the land. You shall be expected to put across innovative suggestions to further refine such practices. You shall not be expected to raise any objection to the same, whether in private or in public.

6. You shall be encouraged to represent a group of shareholders, or appear to be partial to a group of stakeholders of the company; provided, of course, that your performance shall always be evaluated based only on the key deliverables – namely, towing the line of the management and ensuring that the company’s image is protected and its business interests advanced at all times.

7. Should you become involved in any legal hassle owing to having not registered a dissent on issues of either corporate governance or legal compliance by the company, an issue-based support may be provided. In such an eventuality, the company reserves its right to publically disown you and terminate its association with you forthwith.

8. Any attempt on your part to form a group of Independent Directors shall be treated as an act of dissidence and betrayal by management. As a matter of corporate policy, we do not encourage dissent, whether expressed or otherwise.

9. In respect of any matter pertaining to the operations of the company, you shall never take a moral high ground and start teaching us ethics and value YES-MENsystems. The last thing we need is a lecture from a glorified employee, the real capacity in which you shall serve the company.

10. The company expects you to observe complete confidentiality even after the end of your term as an Independent Director.

11. Post-retirement, you shall undertake not to become a whistle-blower and seek protection under any such scheme offered by the government of the day.

12. Advances, affiliations and activities of an amorous nature attempted by you towards directors from the other sex shall be frowned upon; unless, these happen to be dictated by the business needs of the company and have prior tacit approval of the management.

Even if you do not appear in the database of prospective candidates maintained by the Ministry of Corporate Affairs, we trust that you have so far been smart enough to ensure that your legal record is squeaky clean. We are sure that you shall continue to be vigilant on this score.

We look forward to a long-term mutually beneficial association with you. We welcome you as a part of the growing tribe of (perceived to be) independent directors in the country. We have no doubt whatsoever that you shall conduct yourself in a manner which would enhance the prestige and influence of this newly created labor market.

Yours truly, etc”

Background note:

Indian companies having a paid up capital of more than INR 100 millions and those whose aggregate outstanding loans, debentures and deposits exceed INR 500 millions are now required to have at least two independent directors on their respective boards. The new rules notified by the Government of India come into force from the 1st of April, 2014.

Likewise, some companies are now required to have at least one woman director on their board. For some, it is now mandated to spend 2% of their profits on CSR activities.

Hopefully, in the days to come, the newly emerging tribe of Independent Directors would play a far more effective role in ensuring that more companies conduct their affairs with better attention to transparency, ethical standards, gender diversity, environment protection measures and socially relevant investments.

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It is heartening to know that India’s civil services aspirants shall soon be taking an examination in ‘Ethics, Integrity and Aptitude’ as part of their endeavor to make a career in public administration. It is a laudable initiative, and one does hope that in the days to come, our denizens’ issues with the administration shall start getting resolved with empathy, pragmatism and promptness, sans any corrupt practices.    

As an average person, one is tempted to ask if our politicos should also be taking a similar test! We live in an era when probity in India emblempublic life is at a nadir. The conduct of some of our honorable MPs and MLAs on the floor of our august legislative bodies often leaves us red-faced and scurrying for cover. The only time we see a semblance of unity amongst politicians of different hues is when they are faced by the threat of declaring their finances under the landmark RTI Act or when trying to thwart the judiciary’s attempts to keep criminals out of our polity.

How about an Indian Political Service?!

May be, the time has come to introduce an Indian Political Service? If meritocracy has to rule, those aspiring for a career in politics can be made to first apply to a body like the Union Political Service Commission! Detailed CVs backed by details of socially relevant projects handled, vision for the future, parentage and financial backing etc will need to be submitted and made public. Thereafter, the aspirants would need to undergo a rigorous selection process, comprising a written examination, followed by a group discussion, individual PPT presentations for the benefit of their target constituents, personal interviews and the like.

A professional working license can get issued only after a five-year internship with a duly registered political party. Thereafter, the incumbent could become entitled to joining the election fray. license can be put up for renewal once every five years.

Criteria for disqualification can also be laid down. Involvement in scams of any kind, a lapse in discharge of core duties, getting convicted in a court of law, disrupting legislative work, browsing the net for pornographic content while on duty, tax arrears of any kind, etc., could lead to suspension of the license to practice.

An exhaustive appraisal system can be put in place. Performance could be rated on various aspects like development works completed in the constituency, number of new legislations introduced, hours of legislative attendance registered, besides core targets met for the portfolio handled. For re-election, the license will need to be renewed based on the ballot performance.   

Would a Management Development Program Help?India Parliament House

In case our leaders and constitutional experts declare the above mentioned approach as null and void, another option is at hand. We can ask some of our premier management institutes to design a Management Development Program for our politicians! Such a program could have modules on ethics and integrity and behavioral sciences – with a focus on etiquettes and manners. A crash course on meditation techniques could lead our politicos to do some introspection on their own part, trying to figure out ways to attract today’s educated youth into the political mainstream, handling important legislations with equipoise and equanimity, controlling passions on the floor of the house and cleaning up the finances of the parties they owe their affiliations to.

In an era of scams and systemic corruption, the reputation of our political honchos has taken a severe beating. This is not to say that there are no straight forward and honest politicians ruling us. But corruption appears to rule the roost. Whether it is through a loot of the exchequer (Westland helicopters, fodder scam), sale of patronage (allocation of natural resources) or plain extortion and rent-seeking (pay or take the highway), the ingenuity with which public money gets siphoned off to either fill the political parties’ tills or to shore up personal fortunes is something which one cannot learn at management or accounting institutes.

Connecting with the Post-reforms Generation

All political parties need to do some introspection as to how to win and influence potential voters, specifically Gen-Z, meaning those who were born in the post-reforms era and who expect performance in place of promises and delivery in place of dithering.

The writing on the wall is clear – cleaning up political funding, giving up vote bank politics, avoiding inane bickering to win India Rashtrapati Bhavanbrownie points and joining hands to work together and taking concrete steps which enable common citizens to become successful entrepreneurs and make the delicately nurtured amongst us experience true freedom.

It is apparent that as a country, India has so far focused only on economic reforms. Reforms in the other realms of a vibrant democracy, like legislature and judiciary, are yet to be conceptualized and rolled out. We have miles to go before we get to sleep!

 

 

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It is heartening to note that as many as six large Indian corporate groups have joined World Economic Forum’s Partnership Against Corruption Initiative at a recently concluded WEF India Summit in New Delhi. Infosys, Wipro, Godrej, Bajaj and Genpact have thus joined ranks with MNCs like Siemens, ABB and Rio Tinto in pledging to stamp out corruption across all their business verticals. Thirty more companies have apparently discussed concrete action that they can take to curb graft in their business dealings. A small beginning, but a crucial step appears to have been taken in the right direction. 

Corporates – Victims as well as Participants

To lay the entire blame for corruption in high places at the doorstep of either the politicians or the bureaucrats is like looking at only one side of the coin. The corporate world is not only a victim but also a participant in the vicious cycle of corruption that corrodes our economy and saps the vitality of our constitutional institutions. The fact that business has finally articulated its voice against unfair practices goes on to confirm that anti-graft measures make eminent sense as a business strategy.

India Inc willy-nilly becomes a partner in institutionalized corruption not only because of its need to line the pockets of those who make and implement laws and regulations which touch upon their businesses. The need to milk the exchequer to generate vast sums of cash to fund political activity also contributes towards the malaise.

Setting the Moral Compass Right

Siemens’ is a case in point. Based on investigations between 2001 and 2007, the German engineering major admitted to several bribery charges and paid fines of USD 1.6 billion to US and German authorities. The cases involved its operations in such far-flung countries as China, Venezuela, Argentina, Iraq, Bangladesh and Vietnam.

A massive clean-up started, starting right from the Board of Directors. A Compliance Director was brought in. Besides organizational changes, compliance teams were set up across all the business verticals. All such teams formed an integral part of the respective business processes but functionally reported to the Compliance Director. As a policy, internal whistle-blowing platforms were created. A conscious decision was taken to withdraw from projects and territories where it was not possible for the company to engage in clean business.  In other words, rather than confining itself to paper affirmations and lip service, anti-graft measures were made an integral part of the business processes of the company.

It is not surprising that Tatas, a group renowned for its ethical standards in business, decided to study the Siemens model. It is well-known that for more than a century, Tatas have maintained a steady rate of growth without succumbing to the charms of shady deals as a means to the end of making profits. The result has been a steady build up of the trust placed by the public in the Tata brand.

There are many instances of small businesses the owners of which suffer sleepless nights when asked to shell out taxes of any kind. Some reckless souls end up crossing the thin line dividing tax evasion and tax avoidance. There is no dearth of professionals who specialize in supporting such efforts, either due to pecuniary considerations or owing to the need to be in the good books of their bosses.

Quality and Types of Corruption

The World Economic Forum deserves to be lauded for its efforts to facilitate the anti-graft renaissance amongst India Inc. However, what needs to be realized is that the quality of corruption has undergone a major change over the past several decades. Way back in the late 1970s, it used to be either about bending the rules or for terming a “wrong” as a “right”. Now, it is mostly about framing the rules in such a way as to favor a privileged few, and terming a “right” as a “right”!

Corruption, as we face it today, has become more refined, operating within the legal paradigm, at subterranean levels. Corrupt practices brook no standardization; there are different kinds which have evolved depending upon the situation at hand.

The customary kind is designed to prevent harassment and delays. “Speed money” helps smoother implementation of a business venture, within the ambit of rules and regulations in force. This kind also covers a bidding process where all players do not get a level playing field.

The predatory type of corruption is one where those connected to power centers exploit business opportunities armed with prior knowledge of the development projects being planned. Again, all activities would be within the ambit of law, though there would be an in-built advantage in favor of the well-heeled.

The patronage kind of corruption is based on cliques. A team gets formed, and the proceeds typically flow towards the higher echelons. Private businesses as well public sector entities fall prey to this type of corruption.

Companies typically face internal corruption in such areas as procurement, logistics, outsourcing and the like. Internal audits are useful to curb these to some extent, but the real game changer is a clear message from the top, as also an exemplary reward and reprimand system for those who work in sensitive areas.

Then there is petty corruption which all companies and individuals face in their day-to-day operations! Eradicating this type could perhaps be the toughest challenge.

The Road Ahead

The RTI Act in India has surely been a very progressive step in the right direction. It has brought the corruption issue centre-stage and continues to remind us of the fragility of our systems and procedures at regular intervals.

The response of our business leaders to the initiative of WEF is praiseworthy. One would watch their future actions with a keen sense of anticipation and hope. If the business in India comes together and forms a self-regulatory Corruption Watchdog, it could bring in a major change in the way the masses perceive its conduct. Corporates can also resolve to make all political donations transparent, thereby dismantling one of the main pillars of our parallel economy.

The fact that India is ranked 94th out of 176 countries in corruption by the 2012 scores released by Transparency International is a wake-up call to all stakeholders to address this issue with all the seriousness it deserves.

Leaders with a High Moral Quotient

I may sound like a pessimist, but I do believe that just like the oldest profession in the world, viz. prostitution, the oldest practice in the world, viz. corruption, cannot be altogether eliminated. But all self-respecting citizens – corporate or otherwise – would perhaps agree with me that it can at least be reined in, if not eliminated.

For this to be achieved, both the Government and India Inc can work in tandem. The Government can pitch in by playing the role of a transparent facilitator of business and by renewing its efforts towards creating a more equitable and inclusive society. Corporates can effectively contribute towards this goal by depending upon those who have the wisdom to differentiate between right and wrong. In other words, by having leaders and managers who have a high Moral Quotient!

In the long run, a sound business strategy means steering a business by using a moral compass as well!

 

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