(This article was published in the Souvenir of Vigilance Study Circle, Hyderabad during their fifth Anniversary celebration)

Mantra is basically shruthi (veda) and sloka is smruthi (non Veda).  Mantras are texts as available in the Vedas, whereas slokas are texts like in Bhagwat Gita, Ramayana and so on.  So Mantras are composed of mystical slokas.  Mantras, being sacred sound vibrations, are composed of sacred syllables representative of and containing within great spiritual power, or energy.  Utilising mantras allows us to concentrate and focus on achieving higher plane.  The mantras were perceived originally by the great seers or rishis from the primeval or cosmic ether and translated into very definite syllables with rhythm and melody, the Slokas. Is corporate governance a new mantra or a new sloka or a new sloka of the old mantra preached by the management gurus and practiced by the corporate houses?  The purpose of this article is to know that truth.

Dynasty Kingdom - the governing principles

The dynasty kingdom is history now though it exists in politics and business.  The vacuum created by the phasing out of the King rule and the kingdom has been slowly and steadily filled by the corporate houses of today.  The corporate houses are equivalent to the dynasty kingdom in addition to other kingdoms in other area like politics, culture etc.  Thus the principles which applied to the Kings and Rulers of the dynasty Kingdom simply apply to the Organisation and their management which manages the organisation.  Here are some of the interesting governing principles based on which the Kings ruled.  Of course, they stand perfectly suiting to the today’s corporate houses.

First of all, who is a king?  According to Indian culture, a king is the epitome of justice.  In Mahabharata, Vyasa states the qualities of a king:

Van navanitam, rudayam tiksna-dharam 

( Adiparva 3/123)

A king’s words are soft like butter, but his heart is like a sharp-edged knife.  That is, keeping his innermost thoughts hidden, maintaining an external calm, speaking sweet words of diplomacy, and weaving deadly plots to weaken an enemy’s barriers – these are the distinguishing features of a king.

Raja, the ruler, is anyone on whom depends the happiness and welfare of thousands. Rajate, virajate, ‘shines’ – the one who shines in responsibility.  The administrator is a raja.  A minister is a raja.  An industrial magnate is a raja, for on them depend the happiness and welfare of thousands and thousands, share holders and stake holders in the case of corporate houses.

The combination of a raja and a rsi in an administrator, the synthesis of manliness and saintliness, this is what is desired by the Gita.  When one combines power and social responsibility with the strength arising from character, clear thinking, dedication, and practical efficiency, one effects in oneself this unique synthesis of the Rajarsi of the Gita.  So Krishna says in the opening three verses of the Gita:

‘I taught this immortal yoga to Vivaswan; he taught it to Manu who, in turn, taught it to Iksvaku.  Coming down thus in a tradition, this yoga was known to the rajarishi; in the course of long ages, his yoga was lost.  O Arjuna.  This same ancient yoga, this invaluable mystery, I am now imparting to you, finding in you a devotee and a friend’

This is what Kalidasa says in his classic statement in raghuvamsa (I.18):

Prajanam eva bhutyartham sa tabhyo balim agrahit;

Sahasragunam utsrastum adatte hi rasam ravih-

‘It was only for the welfare of the people that the state (under the Raghu line of kings in which was born Sri Rama in a later age) took taxes from the people; as is the case with the sun which draws moisture from the earth only to shower it back thousandfold (in the form of beneficent rain)’

System of governing

The rulers and kings had their own set of principles and systems in governing their kingdom.  These principles and their way of governing their kingdom had the direct influence of their religious leaders and their faith.  So, different principles and practices had been adopted by every ruler, but the common thread was the same, being the universal truth.

Principles and disciplines

Now let us see the governing principles and disciplines which guided the Kings and Rulers. Lord Buddha propounded five principles, which were known as pancasila.  Sila means conduct or behaviour.  These five principles are non-violence, truth, non-stealing, celibacy and non-intoxication.

In the 23rd chapter of the Uttaradhyayana Sutra, Kesi Gautama discusses the five teachings of Lord Mahavira.  There is no difference between pancasila and these five teachings.  Both are similar and share the same thoughts.  Like sila, the work siksa is treated as principles of conduct.  Four vows were advocated in heretic’s penance.  The five teachings are non-violence, truth, non-stealing, celibacy and non-possessiveness.

The five teachings of Vedic religion are similar to the five Jaina teachings, both in thought and in words.  Yama means control, discipline.  Pancha-yama has been described in the Yoga Sutra as the five principles of non-violence, truth, celibacy, non-stealing and non-possessiveness (ahimsasatyastebrahmacaryaparigraha yama)

In Bhagwat Gita, Lord Krishna details the Daivi sampad (divine treasure)

Abhayam satvasamsuddhir


Danam damasca yajnasca

Svadhyayas-tapa arjavam


Fearlessness, purity of heart, steadfastness in knowledge and yoga, charity, self control, and sacrifice, study of scriptures, austerity and uprightness.

Ahimsa satyam-akrodhas-tyagah


Daya bhutesvaloluptvam

Mardavam hriracapalam


Non-violence, truth, and freedom from anger, renunciation, tranquility, and aversion to slander, compassion to beings and freedom from covetousness; gentleness, modesty and absene of fickleness.

Tejah ksama dhrtih saucam

Adroho natimanita

Bhavanti sampadam daivim

Abhijatasya bharata


Courage, forgiveness, and fortitude, purity, freedom from malice and overweening pride – these belong to him who is born with divine treasure

In his brief but masterly introduction to his commentary on the Gita, Sankaracharya conveys in two sentences the nature and scope of the philosophy of administration:

“The Vedanta is (an integrated philosophy of)a two-fold dharma, namely, pravrtti or outward-directed action and nivrtti or inward-directed meditation, which (together) form the means for the maintenance of the world on even keel, for they are, verily, the means of the abhyudaya, social welfare, and nihsreyasa, spiritual growth and fulfilment, of all beings’

This is what the great Tamil Saint, Thiruvalluvar had to say about the approach towards effective administration:

Thirukkural (Ch.68, Ver.676)

Mudivum idaiyurum murriyangu eythum

Padupayanum partthuch cheyal

Every act is to be performed after considering the exertion required, the obstacles to be encountered and the purpose to be achieved on its completion.

The great Tamil woman Poet Avvayar also gave a wonderful advice to the King of her time about how the King can achieve fame.  In a beautifully described phenomenon of ‘bottom up glory’ years ago, she said: 

Varappuyara neer vuyarum; Neeruyara nelluyarum; Nelluyara kudi vuyarum ; Kudi vuyara kol vuyarum; Kol vuyara Kon vuyarvan

When the height of the boundaries of the paddy field increases, the water level in the field increases; when the water level increases, the paddy level increases; when the paddy level increases, the quality of life increases; when the quality of life increases, the quality of governance increases; and when the quality of governance increases, the country flourishes and the greatness of those who govern admired.  

Thus by taking care of the basics, the glory is achieved.  This is the secret of good governance and bringing fame to the ruler as she prescribes.

These are the virtues.  These virtues of principles and disciplines derived from the scriptures through the inspiration of the religious leaders formed the governing principle for the rulers who ruled their Kingdom.

Is Corporate Governance different altogether?

It is not always correct to define everything.  Definitions do well in scoring marks in exams.  Anything and everything in this world can be defined.  Nevertheless, none of them can be defined completely and perfectly.

Any attempt to define good corporate governance would be like trying to define ‘rain’.  How could rain be defined?  Perhaps it is easy to understand by saying; when there are dark clouds and when there is a cold breeze or in short, when there is an environment conducive for the dark clouds to transform themselves in to water droplets, then it said is to be raining!  So, rain is an effect of certain causes.  Later on, the rain itself becomes a cause for many other effects.  The same is the case with corporate governance.  It has to be looked at from the ‘cause’ and ‘effect’ point of view.  Because ‘that which we sow we reap’; this is the essence of the doctrine of Karma.

Corporate governance is in fact, an effect of various causes, which are mainly conditions.  Before we discuss about those causes or conditions, it is worthwhile to have an idea about why and how corporate governance has become a buzz word in the recent times.

Corporate governance – a Buzz word

The world is rediscovering the fact that honesty is the best policy.  Good governance is perceived globally as the antidote for corruption.  As long as the world was divided between the two ideologies of East and West, corruption was not considered as a major issue.  

“Corruption is fine, as long as you are in my camp” was the attitude of the two super powers.  But after the end of the cold war the countries have become interdependent. As a result, the resources started moving across the borders and today we are witnessing the Flat World phenomenon; again to borrow the words of Thomas L. Friedman.  In this process, the liberalization and the economic reforms thereof paved way for entry of private players in economic development.  This has slowly pushed the private players to the reality of competition and at the same time being self reliant.  The outburst of financial irregularities and scams were the result of this situation to cope up with the competition and at the same time profit making.

Added to this factor, there was another interesting development taking place after the end of cold war.  The tax payers of the donor countries and societies who provide aids to the developing countries are now very vigilant and are particular that the funds are spent properly without any misappropriation.  They are very keen that the countries receiving aids are well governed.  So the buzz words, governance and corporate governance have become very relevant and gained prominence in the present scenario.   There is a paradigm shift in the thinking from ‘business of business is business’ to ‘business of business is ethical business’.

So, corporate governance, a subject hardly discussed a decade ago in any forum in India and a subject almost non-existence in public domain earlier, has become a relevant issue today because of the emerging economy due to the integration of Indian economy with the global economy and the private sector playing a major role in it.

Transparency and accountability

In a crispy term, corporate governance can be understood as the process which enables “Enhancement of the return on capital through increased accountability”.  It is, in fact, the mechanism by which values; principals, management policies and procedures of a company are made in consonance with the real world.  It refers to the entire system by which the company is managed and monitored in a transparent manner. Undoubtedly, transparency and accountability are considered as the two fundamental principles for good corporate governance.  In a practical sense, corporate governance provides a structure through which the objectives of the organizations are achieved and the performance monitored from time to time.

Corporate governance has several claimants – shareholders and other stakeholders include suppliers, customers, creditors, the bankers, and the employees of the company, the government and the society at large.  The right starting point for good corporate governance is the high degree of priority on the interests of the shareholders who have immense faith in the Corporations to use the investment funds wisely and effectively.

Corporations or Corporate are the republics.  In any corporate sector, the ultimate authority rests with the shareholders or the shareowners.  The shareholders are the owners.  They elect the representatives called the Board of Directors.  The Board of Directors delegates most of the decisions to Managers down the line, for effective management of the affairs of the Corporation.  In any case, the ultimate objective of any Corporation is to protect the interests and rights of the shareholders or shareowners. As in the case of any republic, the actual power sharing relationship depends upon the specific rules of Governance.

Good corporate governance involves a cohesive set of relationships among the Board of Directors, management, shareholders and stakeholders of an organization.  Researchers have found that “Firms with stronger shareholder rights had higher firm value, higher profit, higher sales growth, lower capital expenditure and fewer corporate acquisitions”.  The Board of Directors represents the interests of the company’s shareholders i.e. the owners of the Corporation in optimizing long-term value by providing the company with proper guidance and strategic vision on behalf of the shareholders.  In the recent times the usage of word ‘shareowner’ is being used instead of `shareholders’ particularly in the case of public sector enterprises, perhaps, it is because the Government holds the major shares in it.  Equally important is the responsibility of the Board to ensure that the company’s management and employees operate with the highest degree of ethical standards.

Samyagdarsana-jnana-caritrani moksa-margah     – Tattvartha Sutra 1.1

Right vision, right knowledge and right practice constitute the path to liberation.  The term ‘right’ refers to an enlightened state. The vision, knowledge and practice in their enlightened state are the three jewels which illumine the path of liberation.

Nadamsanissa nanam, nanena vina na humti caranaguna agunissa natthi mokkho, natthi amokkhassa nivvanan       – Uttaradhyayana Sutra 28.30 :

Without faith, there is no knowledge; without knowledge there is no virtuous conduct; without virtues there is no annihilation of karmas and without annihilation of karmas, there is no liberation.

When it comes to organisation, the liberation comes when the vision and mission are achieved thorough the sustained efforts of the employees of that organisation.

Corporate governance, therefore, is only part of the larger and economic context in which the funds of the shareholders operate.  However, sustenance and long term success of a company depends on the factors such as business ethics and corporate awareness of the environmental and societal interest of the communities in which it operates.  The degree to which Corporations observes the basic principles of good corporate governance is considered increasingly as an important factor.

Where do all these lead us to?  They only give us the realization that there are three basic parameter which are considered to determine good corporate governance.  They are :

(i) Accountability – when it comes to corporate houses, the accountability is towards the Stake holders;

(ii) This accountability can not be determined unless there is transparency in the system.  So, ‘transparency in operations’ becomes the second parameter which determines or good corporate governance; and

(iii) Thirdly, the ethical and moral framework on which the entire transparent system works.

In order to ensure accountability, we need to have transparent system based on high ethical standards.  Thus it becomes necessary to understand what the ethical standards are and how they influence in managerial decision making.  It is very interesting to see how we could narrow down to ethical standards in individual from the global scenario.  After all, the atom bomb is powerful because of the atoms and not because of its size!!!!!

Incidentally, in India, we have been taught by our Upanishads and the Gita to approach the subject of religion, ethics and morality in the context of human growth.  After all, the strength of a nation lies in its citizens, physically healthy and mentally well-instructed, alert and confident.

Emphasis in Indian culture is placed on a harmony of thoughts and action, knowledge and conduct, logic and faith, philosophy and religion.  No society can function without integration.

The great saint of Veerayatan, Amar Muniji expounded three tenets for a good and pure life – Service, Education and Sadhana.  Service : Developing a healthy, clean life system.  A life of non-violence.  Education : Constructing one’s spiritual intelligence, and support towards such an act in the life of others as well.  Sadhana : Right distribution of acquired wealth by detachment.  Non-possessiveness in life’s sadhana. It is once again the Bhagvad Gita which identifies the root cause of problems, which says, ‘The problem that is presented is a problem of confusion resulting from the conflict of moral duties.  The wisdom that is imparted in the answer is meant to remove that confusion”.  – Bhagavad Gita

So, here we are, with the basic dynamics of how ethical values can be built into an Organisation.  After all, what constitute an organization?   The atom bomb is very powerful not because of the size of the atom bomb, but because of the action that is taking place inside the atoms.  Similarly, in an organization, the individuals matter the most in every thing that is happening at the macro level.  Therefore, the journey which we started from trying to define corporate governance necessitate moral and ethical framework which need to be knit over the individuals at the micro level.  Therefore, corporate governance has become very much relevant to every sector whether it is public or private sector.

In nutshell, corporate governance boils down to existence of Values and Value based system, which absolutely revolves around the ‘Self’, the individual.  This again reminds the importance of an atom and atoms in an atom bomb.  This perhaps can be termed as the ‘bottom up glory’ as described by Poet Avvayar as mentioned earlier.  

Ultimately, if we closely look at the spirit behind corporate governance, we will realise that it is like a Yoga.  The philosophy of Yoga is expounded in the Gita as:

yogah karmasu kausalam (Meaning thereby, ‘yoga is efficiency, dexterity, in action’)

This is the great message of Bhagavad-Gita.  It is the loftiest and the most practical philosophy of administration, in the present context, corporate governance when it comes to corporate sector.  For instance, a project for which twenty crores of rupees allocated and on completion, if it is converted into a one-hundred crore rupees benefiting the shareholders, then that is yoga.  This is karmasu kausalam.  In the same project, if the goal is achieved productively, in a much quicker and efficient way, and benefiting all parties involved in that project, then that is yoga.  The light of knowledge and culture, the spirit of mutual trust and cooperation, are the external fruits of that Yoga.  The internal fruits are the happiness, peace and the sense of fulfilment of the administrators concerned or the corporate governance operators.  This in fact, results from their growth in ethical sense and spiritual awareness.  This is the fusion of the energy of manliness (raja) with the energy of saintliness (rishi).  This is the ultimate state to attain as long as one is in the arena of governing, whether it is corporate governance or governance of the nation or global governance.  The power of impact of this Rajarishi on the world situation leads the humanity on the road to collective human welfare.

This philosophy of yoga of the Gita and its rajarsi spirit should be the inspiration for those in politics and administration.  The corporate governance is thus a new sloka to chant the old mantra we have in our scriptures.

The meaning and significance of the grand testament of the Gita given in its closing verse, which all of us need to take as a challenge to us to achieve good corporate governance:

Yatra yogeswarah krsno yatra partho dhanurdharah;

Tatra srih vijayo bhutih dhruva nitih matih mama-

‘where (there is) Krsna, the master of yoga (and) where (thee is) Partha, the wielder of the bow, there (in that society), I think, wealth, victory, welfare and unshakable Justice (shall prevail)’.

Isn’t it the mantra which is now being chanted through the new sloka of ‘corporate governance’?

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