I am provoked to write this article after hearing an impressive and eloquent address by the CEO of a Public Sector Bank.  Mr. Albert Tauro, CMD, Vijaya Bank, addressed the members of the Vigilance Study Circle – Bangalore on 18th August 2009.  Holding the thread all through his address, he was very emphatic on the fact that values and value based systems are indeed the utmost requirement for the positive health and growth of an organization particularly, PSUs/PSBs.  The focus of his address was on improving the value system at the personal, family and then societal level.  I, as a person breathing in the atmosphere of ‘Vigilance’ for the past 22 years and as the Founder of SIV-G (Self Imposed Vigilance for Good Governance) in particular, cherished the views of CMD, Vijaya Bank thoroughly, for of two reasons.  One, they perfectly support my Law (Suresh’s Law of Corruption Dynamics –refer www.siv-g.org) and two, there was a strong and categorical message from a CEO.  It is with this background, I am proceeding with the ‘Values and Value System’ which is the very fundamental need and perfectly in consonance with what Rabindranath Tagore said, “Light a candle, the darkness vanishes.  There is no point in cursing the darkness”.

The power of Individuals

The atom bomb is very powerful not because of the size of the atom bomb, but because of the action that takes place inside the atom.  Similarly, in the globalised world, in any organisation, the individuals matter the most in every thing that is happening at the macro level.  Therefore, a journey from the macro level to micro level is made in this paper to understand the reality and to appreciate the need of the hour.

Macro level - global

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.  The two camps were not bothered about corruption. “Corruption is fine, as long as you are in my camp” was the attitude of the two super powers.

However, with the end of the cold war the countries have become interdependent.  As a result, the resources started moving across the borders and today the world has become a global village and we are witnessing the process of globalisation.

Globalization necessitated liberalization and the economic reforms which started in India in 1991.  The investment of government in public sector, which was once considered as compulsion, had become an option in the hands of the government with the entry of private sector and their contribution in the economic development of the nation.  This has slowly pushed the private players in to the reality of competition and at the same time to be self reliant.  This situation perhaps has led to the outburst of financial irregularities and scams across the world which led to the disappearance of companies from the Fortune 500 list.  Enron, WorldCom, Global Crossing, Tyco International, Parmalat and Arthur Andersen are the big names which vanished from the scene due to financial irregularities and scams.  We as Indians have also contributed to this ‘shame list’ by adding the name of Satyam, never bothered about the literal meaning of Satyam, ‘truthful’!

The big challenge for the private sector has been to cope up with the competition, while ensuring profit making and at the same time hold accountable to their stake holders.

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’.

FAT Test

There are three basic parameter which are considered to determine good governance or 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 good governance or good corporate governance; and

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

In fact, in all my lectures and workshops on ‘Vigilance’, particularly after my joining BEML, I am doing an exercise called ‘FAT Test’ – FAT stands for Fairness, Accountability and Transparency. The FAT Test has been found to be an amazing tool by the participants to understand why they are doing what they are doing, particularly being in a public sector.

Thus, accountability and transparency built over ethical standards have to be ensured to achieve good governance or good corporate governance.

Micro level - individuals

As mentioned earlier, 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.  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!!!!!

What is happening inside human?

In order to develop a value system, first of all, we must be clear about what is happening inside the human being and understand how a value system develops in a particular individual.  The following two diagrams depict the same. It is the Antakarana (inner instruments) and the five senses (outer instruments) in human being which are responsible for developing a value system:

So it all boils down to the human behaviour and human acts based on the input that goes into the human and processing by the Antakarana.  Here comes the challenge of building a system for controlling or monitoring mechanism and processing.  If at all any serious attempt to build a value system is made, it has to focus on this point.  The question of integrating and holding the possessed and acquired values thus comes at this point and so we talk about ‘integrity’, values and value based system.

What are values?

As I understand, the best way to understand ‘ethics’ and ‘morality’ vis-à-vis values is this: the ethical values possessed could be demonstrated through the moral behaviour.  However, supreme oneness is the rationale of all ethics and morality. The fundamental theme of ethics and morality is “Do not injure others; love everyone as your own self, because the whole universe is one’.  Injury not only mean physical but also psychological, fiscal and so on.

Practically, values can be looked at from individual’s point of view as well as from the societal point of view.  It will be worthwhile to know the factors which determine them:

Value Determining factors

Individual’s sense of Value

Integrity

oIntellectual integrity

oMoral integrity

oFinancial integrity

Honesty & Truthfulness

oIndividual Character

Family Background

Education

Self Confidence to hold character

Societal ValueFrom Individuality to Collectivity

What is integrity?

Then we come to integrity.  Integrity is ‘dharma’.  To bring anything together is ‘dharma’.  When people come together in any form is the first pulsation of divinity.  In other words, to bring people together in any form is dharma. One which holds together is dharma.   For example, the solar system, the innumerable stars that are around are following certain principle or set of principles, some rules, some laws and they are subject to change that is dharma. In a family, the family members are held together; that is dharma.  In a locality, in a society, various types of people following very many things, various economics, political, social, cultural, religious functionalists for a society, can pull on together, which is dharma.  Dharma is a principle of life.  And this principle of life is in everything. Similarly, in human beings, when the set of values are held together and demonstrated continuously for good causes producing harmony, peace and benefiting the whole society, it becomes a dharma and is known as integrity.

The litmus test

There is a three-point test, which is being advocated by the stalwarts who had seen great success amidst adversities to confirm whether we have integrity and our acts are ethical.  It is a three-point test prescribed by Norman Vincent Peale and Kenneth Blanchard in their book, ‘The power of ethical management’.  Any decision taken or any act performed has to be subjected to this test.  The first test is, is it legal?  If it is not legal, it is not ethical.  The second test is, is it fair? Whether the decision or act is fair enough to all the parties involved in the process.  In other words, it should lead to a win-win situation.  Then the third test is, if our decision or act is made public subsequently, will it not bring shame or embarrassment to the individual or organization.  If the answer to these tests is affirmative then the decision is ethical and one can be sure of integrity intact. Else, it is a serious issue for introspection!

Need for introspection

“The thief is an artist and the policeman is only a critic”, said Oscar Wilde.  The real glory will come only when the thief takes over the role of the policeman to criticize his own art and reform himself.  This is the utmost need towards good governance or corporate governance. The big question is how to make the artist to become a critic of his own act.  This is where the challenge lies.  Perhaps, the voluntary congregation of Vigilance like the Vigilance Study Circle should take the lead and travel an extra mile in this direction, particularly when strong messages emanates from the champions of the industry like the CMD, Vijaya Bank.  Therefore, serious attempts should be made to not allow any person to become an artist in terms of what Oscar Wilde said!

The path ahead

It is in this context I would draw the attention to the recent initiative of launching the National Governance Corps (NGC) on the lines of NCC / NSS in schools.  After the launch of NGC in a Chennai based School in December 2008, the BEML Management has decided to launch a pilot project of NGC in one of its schools.  If other Managements and Schools follow the same pursuit and if NGC becomes a national movement, then perhaps, the controlling and monitoring mechanism for imbibing values and building value system would be built in at the individual level and in the long run it is bound to have its own effect.

In the ultimate analysis, as Swami Vivekananda said, ‘we have only to bring the chemicals together; crystallization will take place on its own’.  I am sure VSC is all set to take up this role, particularly when the climate is very conducive.

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