Posted on: January 12, 2009
The major financial scandal that one of the largest IT companies in India, Satyam Computer Services Limited, has been involved in has shaken the confidence of the public, of the government and the corporate sector in general across India. Given the size and scale of this major fraud, there would also be several organizations across the world that would also be affected profoundly by this development particularly those that have had dealings with Satyam.
Cases of corporate misdemeanor and fraudulent and unethical acts by top management appear to have become widespread in recent years, and this at a time when the social, environmental and governance challenges facing human society require a high sense of corporate social responsibility and ethics in corporate organizations! For instance, despite stringent regulations and laws, the problems of environment damage, the growing threat of climate change and the inequitable distribution of income in different countries cannot be solved unless corporate organizations display a high level of ethics in their decision making and actions. It would be useful to explore the roots of the current trend. While there is obviously a multiplicity of factors involved, perhaps a major driver of unethical behaviour at the corporate level is the decline in moral standards and ethics in society in general. Whether this is the result of nuclear families, a growing obsession with material wealth or perhaps even the failure of governance and concern on the part of the public is hard to identify, but clearly the world would lose a great deal if corrective action is not taken early, which would necessarily have to be in the nature of some fundamental changes and not merely first aid solutions.
The Wall Street Journal of November 21-23, 2008 brought out an extremely important news report in which it mentioned that despite losses in the stock market, plenty of top officials managed to emerge with substantial fortunes. It identified fifteen corporate chieftains of large home-building and financial services firms reaping more than $100 million in cash compensation and proceeds from stock sales during the past five years. Four of those executives, including Lehman Brothers Holdings Incorporated and Bear Stearns Companies were actually responsible for companies that filed for bankruptcy protection or had their share prices falling more than 90% from the peak. The study further shows on the basis of examining 120 public companies in a range of sectors that top executives and directors of the firms who had filed for bankruptcy cashed out a total of more than $21 billion during the period reviewed.
Is human society losing its ethical and moral moorings to an extent that threatens the welfare of society? Even as poor people have been investing in the stock market, a series of frauds, irresponsible executive decisions and incompetence can cause undue hardship to a large number of people. But, more importantly, CEOs of companies are expected to set standards that others in industry and in society at large are expected to follow. The need of the hour is not only to expect honesty in decision making but also to go beyond the requirement of merely maximizing profits but to the extent possible doing good to society. This, of course, will not happen unless value systems change in the right direction.
In a country like India where 60% of the population today is under the age of thirty, the only means to bring about change in the right direction is to ensure that the youth of this country imbibe values that would ensure reverence for ethics in decision making in every sector of the economy. This, of course, would be true across the world even where the percentage of youth in society may actually be much lower. There is perhaps need for a global movement that upholds some of the desired values of protecting the earth’s ecosystems and upholding basic ethics, and I wonder if a movement in that direction globally would make a difference.
I am seriously considering the launch of a global movement called Forum for Revival of Ethics & Ecosystems for and by Youth (FREE Youth). Would those who read this blog care to provide any reactions?
