Respect is earned over years from actions across one’s sphere of operations. Every action is watched, evaluated and scrutinised before opinions are formed on the basis of an unblemished record over a period of many, many years. Closer scrutiny is often reserved for how a company tackles a crisis and if it is able to hold on to its values and ethics, while weathering the storm.
It is easier to be in control of one’s own actions and ensure one’s integrity than be able to guarantee similar virtues for thousands of other fellow workers, making it that much more difficult for an organisation to earn respect and sustain it, compared to an individual. Moreover, to be admired and recommended for public recognition by competitors and rivals is definitely a matter of greater honour than bagging a trophy on the recommendation of a few wise men. The task, hence, was cut out for BW/ Businessworld and TNS Global market research.
In the initial survey of managers conducted between December and March, the feedback was taken more as a top-of-the-mind unprompted recall from across industry groups. Later between July and September the same set was queried again. The survey took into consideration factors such as innovativeness, quality and depth of top management, financial returns to shareholders, ethics and transparency, quality of products and services, people practices, global competitiveness, and technological prowess. Of the managers surveyed, 57 per cent have overall work experience of 15 years, and two-thirds of all respondents have 10 years of experience or more in that specific sector.
Data was culled out from companies across 20 sectors including apparel and textiles, four- and two- wheeler automobiles, aviation, banking, consumer durables, education, e-tail, FMCG, healthcare, hospitality, infrastructure, non-banking financial services, oil and gas, pharmaceuticals, real estate, retail, technology and telecom. Each sector comprised 15-20 companies. The second phase of the survey was conducted between July and September and 503 respondents were queried on 107 companies.
Fifty five companies were finally short-listed on these parameters. In unprompted responses, TCS topped the list, with Infosys and Google India following. Yet, in the structured format managers voted for Google India to head the overall list of Most Respected Companies, followed by Infosys, TCS and Microsoft India, giving a clear indication that global companies or firms with large global exposure command greater respect than local ones.
Respect is earned and cannot be demanded. The challenge for such surveys is to capture and filter perceptions, and not base conclusions on cold numbers only. Financial performance does reflect the capability of a company though it may not necessarily capture its values and ethics. So, while the perception of the uninformed can be misleading, that of skilled and experienced professionals is based on sound reasons, logic, and work-life experience across industries, making the exercise a lot more valuable and meaningful.
One could get a variety of answers to the basic question of what makes a company worthy of respect. Yet after some debate one could see a broad convergence of the virtues that could earn one the exalted position. “A company following right business practices with its stakeholders including customers, employees, suppliers, investors and the government is quite likely to earn more respect than others,” says Harish HV, partner at Grant Thornton, India. “It should be following right practices not just in letter but in spirit too.”
One such visible example is Infosys. The company remains an all-time favourite with global investors. It was the first choice for foreign investors when India opened its economy in the 1990s. The key factor was credibility of the company’s accounts and disclosures, and personal conduct of its top management.
Also in the same league, TCS got similar visibility after it got listed almost a decade after Infosys. Stakeholders of TCS vouch for its ethics and values, which go beyond just the group brand name it proudly carries. TCS is India’s most valuable company on the stock markets, known across the globe for decades for holding high India’s software flag.
“Consistent, honest and competent conduct will bring respect over time. Respectability has much wider parameters — it has more to do with values,” says Abhijit Joshi, founding partner of Veritas Legal. “A company that remains true to its values and delivers best in class performance in an honest and transparent way over a long period of time would earn respectability.”
A case in point is following the practices of corporate governance irrespective of whether they are legal requirements or not. For instance, almost every company follows the requirement of having independent directors. However, companies which want independent directors to really perform their role and help the company meet high standards of ethical practices, will not keep reappointing them for longer than a reasonable period. Unfortunately, independent directors on boards of bulk of Indian companies are no more than rubber stamps and many behave no different than passive pensioners.
“Clinical compliance to corporate governance may not be the road to respectability — compliance in spirit and sticking to value systems would be important for respectability,” says Joshi.
Similarly, on the issue of appointing a woman on the board, scores of leading companies are yet to make these appointments despite the government and regulator repeatedly urging them to do so. Carefully chosen board members who do the company proud and don’t owe their position to friendships or personal relations also influences the perception about a company.
All in all, companies with strict systems and processes, basic adherence to honest practices, and ethical standards are more likely to earn respect from not only their stakeholders but also investors, lenders and borrowers. Over a period of time that would makes a difference.
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(This story was published in BW | Businessworld Issue Dated 11-01-2016)
