Why “Smoking” Is Injurious To Health In The Corporate World!
Today we live in a cluttered world with immense controversies!
Controversies from mass layoffs by large corporations including multinationals, to governance issues in large established companies, to dilemma in the trade-off between sustainability and profitability and finally in their contribution to the pollution in this world!
Many of these companies will always rationalise and give many reasons for doing what they are doing. But their credibility is hurt as most people and the public believe that “there’s no smoke without fire”!
We live in a world of perception! We have to wander through “half-truths “or is it “post truths” to get to the truth! And these perceptions are hard to erase!
Is it therefore, not possible for companies to have a “squeaky” clean image?
While we want to hire leaders with squeaky clean images, why should corporations not have a squeaky clean image?
Can we not walk the talk in governance and our commitment to society and be on the right side and win? Or are we too old fashioned to think that way!
And finally, does it all have to do with leaders and their type of leadership?
Therefore, the question is: is there no “dharma” in the corporate world? Dharma is defined as “the universal truth” as taught in the teachings of Buddha! It’s about doing our duty righteously!
What is the role of conscience and values when we work for enterprises that are sharply focussed on a single dimension of profit over everything else? Do passing off lies or half-truths under the garb of plausible explanations meet the test of righteousness, we wonder!
The recent controversy surrounding the Adani group and as we write this piece – Dell Technologies cutting down 6,000 jobs, equivalent to five per cent of their worldwide workforce – have once again brought to the fore the question of whether leaders should observe rules of dharma as enshrined in our scriptures.
Even in the famous epic of Mahabharata, amidst the sound of drums and bugles, Lord Krishna exhorted Yudhishthira (famously known as Dharmaputra) to tell a convenient half-truth about the death of an elephant called Ashwathama so that his Guru Drona lays down his arms assuming that his son Ashwathama had died!!
We find four Dilemmas of Dharma in the Corporate World!
1) Independent Directors Dilemma:
It is not uncommon, to find that business leaders across the world are advised by marquee law and accounting firms to cover up inconvenient facts by stating it in a manner that requires an expert forensic eye to detect what’s hidden underneath. It is in this context that independent directors and other executives in a firm are faced with a dilemma of whether to become a party to the disclosure or close their eyes and hide behind the convenient corporate veil of relying on the opinion of advisors or certifications of management.
Are these matters of moral conscience or just convincing themselves that they are not legally wrong?
2) Greed vs Responsibility:
Leaders in powerful positions always have the temptation to sacrifice values for personal gains. When the gains are huge, it becomes difficult to resist temptations and stay true to protect the interests of all stakeholders.
In the year 2012 the high profile Global CEO of McKinsey, Mr Rajat Gupta, was convicted by the US Court of felony and insider trading. He spent two years in prison. One wonders as to why such a high profile well-paid executive of one of the most reputed global consulting firms would indulge in insider trading!
Closer home, is the case of the former CEO of ICICI Bank, Ms Chanda Kochhar, who has been accused of favouring Videocon Group promoter Mr Venugopal Dhoot, by sanctioning loans to a firm owned by her husband. Ms Kochhar was again a very high profile CEO in India Inc. – most respected by everyone in banking circles and as someone who was closest to the powers-that-be in every dispensation in government.
While the jury is still out as to whether she is guilty of wrongdoing, she was summarily dismissed by the Board of ICICI which revoked her ESOPs and all the bonuses granted to her. She was also arrested and spent time behind bars. Did someone who was so well paid with huge stock options, need to compromise her values at the altar of personal gains? We are sure, she must have faced a difficult dilemma of her dharma versus supporting her husband.
Memory is still fresh of other examples like the Lehman crisis, Enron and Satyam Computers – all scandals involving fraud on shareholders with full support of many board members, auditors and executives of the company in falsifying accounts. We wonder what dilemmas the senior executives in the company must have faced while committing several acts of manipulation in the books and records. Was it fear of jobs or greed of personal gain, compromising their fiduciary duty to shareholders and the larger public!
3) Green vs Gain:
There’s a raging debate about the impact of global warming in the world and the role of corporates in “responsible governance” to alleviate the impending climate crisis across the world.
While there is a lot of increasing awareness amongst businessmen, this is an area that requires huge financial outlays, modernising old machines with less polluting machines, usage of fossil fuels and using highly effective biologically derived enzymes for treatment of waste-water, soil and other effluents. These measures will surely impact the bottomline of businesses and hence impact shareholder value creation in the short term.
The auto industry is known to be one of the major contributors to pollution and global warming. They are therefore, investing in electric vehicle (EV) technology. But whether developing economies can afford to transition at the cost of impacting demand and revenue is yet to be seen!
4) People vs Profit:
Recently the Google CEO apologised to all his employees that they had had to lay off 12,000 people to improve their bottomline. Others including IBM, Microsoft, Spotify, Amazon, Meta, Intel and many others joined the lay-off bandwagon citing reasons of recession. So far 256 tech companies are reported to have laid off a whopping 83,000 employees approximately. We hear stories of how pink slips are handed over by mail reaching the inbox of employees at midnight. As a result, many employees on H1B visas are left in the lurch overnight, without jobs, and are forced to return back to India.
Many Indian companies have also started downsizing. Ed-tech major BYJU’S has also found this a good opportunity to cut many senior level positions to improve their profitability. With such a
huge job loss, imagine the social and psychological impact of losing jobs overnight!
It is the dharma of business leaders to put purpose before profits, but how many of them will bite the bullet is to be seen.
Do we lose our good night’s sleep over these issues of dharma?
Only time will tell and it will also tell on the health of the corporate body!
Without “dharma” organisations will always face an existential crisis and like they say, it’s very unlikely there will
be “smoke without fire!”
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