Academic journal article Indian Journal of Industrial Relations

Corporate Ethics & Governance in an Inclusive Growth Framework

Academic journal article Indian Journal of Industrial Relations

Corporate Ethics & Governance in an Inclusive Growth Framework

Article excerpt

Introduction

"The community can't ride one track and business another. The two are inseparable, interactive and interdependent" Cleo F Craig, Former President and Board Chair, A T & T

In the context of the State as represented by the government of the day, inclusivity is a concept that connotes active participation of the largest number of its people both in the creation and sharing of wealth and prosperity to the greatest equitable benefit of all. Such wellbeing and happiness --despite the variations in their connotation to different people--are dependent upon the adequate and timely production and delivery of goods and services at affordable prices; this role is assigned by society to firms and individuals to efficiently produce and effectively distribute to concerned segments of buyers in need. Thus licensed and sanctioned by society, business--especially in the corporate format which is the focus of this paper--has its purpose well set out and can proceed to carry out its operations to fulfil societal objectives, along the way also earning an adequate, even attractive return for its shareholder owners.

Given this framework, how business should and could align achievement of its economic profit-oriented objectives alongside satisfactorily addressing the ever changing societal requirements so as to sustain itself on an ongoing basis creating both national wealth and shareholder returns is the subject explored in this article. Section 1 sets out the interdependent relationships between and among business, society and the state while section 2 outlines the ethical rationale and public policy imperatives of economic development and the practical problems encountered in equitably and inclusively spreading the benefits of such development among the population. Section 3 discusses the theoretical underpinnings of for-profit corporations and their struggle to meet and manage the often non-congruent goals of their stakeholders including the state. Section 4 explores some of the measures that could align corporate profit objectives with societal objectives, specifically of inclusive development. Section 5 concludes with a reiteration of the business case for incorporating inclusivity objectives of the state in the corporation's strategy and conduct.

1. Business, Society & the State

Government in most circumstances connotes the executive function of protecting the community from external threats as well as internal strife and discord among the populace. Among its earliest manifestations was the institution of a king to discharge these responsibilities. In the Indian tradition, the king was entrusted with the role of protector and law-enforcer of his subjects; in this task, he was guided by a vast set of principles and rules to be obeyed by the population under the pain of punishment for non-compliance generically referred to as Dandaneeti or the postulates of punishment to be administered fairly and without any discrimination (Ganguli 2000: 121-29) (1). The 18th century BC Code of Hammurabi was a similar edict transparently publicized for general information setting out the do's and don'ts and the punishments for breach (with the underlying dictum of an eye for an eye and a tooth for a tooth)in the ancient Babylonian kingdom (Lewis 2003: 7-12). Aristotle, the fourth century BC philosopher, summed up with great simplicity the objectives of the state: "Every state is a sort of association and every association is formed for the attainment of some Good ... [and] supreme Good, the object of that association which is supreme and embraces all the rest, in other words, of the State or political association" (Lewis 2003: 50). That the purpose of the state or the government was essentially to promote goodness or wellness among its people, besides of course protecting them from external aggression whenever that occurred (and often also initiating such aggression over others in the interests of preemptively protecting or further enhancing the wellbeing of its constituents) has been repeatedly stressed by succeeding generations of philosophers and political scientists, allowing for due differences in ideologies. …

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