The Hindu Business Line : For ethics, you can bet on ancient wisdom

BUSINESS ethics are rules of business conduct by which propriety of business activities may be judged, defines Biswanath Ghosh in Ethics in Management and Indian Ethos, from Vikas (www.vikaspublishing.com).

"The concept of social responsibility of business was first mooted by President Woodrow Wilson in the US as early as 1913," writes Ghosh in a chapter on corporations and social responsibilities. "As the only American President with a PhD," he understood the value of linking ideas and public policy, according to Exxon Mobil chairman and chief executive Lee R. Raymond, quoted on www.exxonmobil.com.

Disturbingly, though, the www.ethicalcorp.com has a report dated July 19 saying that ExxonMobil had recruited recently former chief of staff at the White House's Council of Environmental Quality, Phil Cooney. "Cooney resigned from his job in mid-June, two days after a non-profit group published documents accusing him of personally editing government climate change reports in 2002 and 2003 that considerably played down the certainty of the science of global warming. Reflecting a similar view, Exxon has been known to vociferously campaign against the Kyoto Protocol," one learns.

With a sigh, therefore, I turn to 2000-year old wisdom in Thirukkural, one of the three parts of which is for virtue and another for wealth, in good balance, leaving but the last for love. Kural 754, translated, reads, "Their wealth, who blameless means can use aright, is source of virtue and of choice delight" meaning that wealth acquired with a knowledge of the proper means and without foul practices will yield virtue and happiness, as http://tamils.tamilpower.com informs.

To supplement that lesson in ethics, the next verse says, "Wealth gained by loss of love and grace, let man cast off from his embrace", while in yet another Thiruvalluvar assures that to those who have honestly acquired an abundance of riches, the other two, viz. virtue and pleasure, are things easy of acquisition.

Returning to Ghosh, I find that he devotes chapters to ethical investment, HRM and ethics, and so on. Chapter 10 titled `ethics and international business' notes that there can be clash of cultures, on matters such as bribery. "When seeking business permission in India, should a westerner offer bribes to officials, especially when most other business people do?" asks the author, reminding one of the Volkswagen issue in Andhra Pradesh.

Useful read.

What's good and `good' in governance

GOVERNANCE and `good governance' are not amenable to precise definitions, concedes Kavaljit Singh in Questioning Globalization, from Madhyam Books and the Asia-Europe Dialogue Project (www.ased.org). "From NGOs and community organisations to powerful states and multilateral institutions — all swear by good governance," he points out, and comments that definitions may often be at cross-purposes.

The word `governance' derives from the Greek word kybernan, meaning `to steer and to pilot or be at the helm of things', notes Singh, and lists the six characteristics of good governance specified by the World Bank.

These are: voice and accountability, government effectiveness, quality of regulatory framework, rule of law and protection of property rights, independence of the judiciary, and curbing of corruption.

One learns that the Bank first used the concept in a 1989 report titled `Sub-Saharan Africa: From Crisis to Sustainable Growth', and rued about the ineffectiveness of aid due to governance issues.

However, it was a 1998 report titled `Assessing Aid: What Works, What Doesn't, and Why' which gave a major ideological push to make good governance a conditionality. The author discusses the pros and cons of such an approach and wonders if the Bank and the IMF practise what they preach.

"These institutions follow highly undemocratic structures and poor governance standards. Voting rights in the World Bank and the IMF are still governed by the archaic rules framed in 1944... No doubt, the membership of over 180 countries gives international financial institutions a multilateral character but unequal voting rights and faulty quota formula grant disproportionate power to a small number of developed countries to control these institutions," laments Singh.

Participate in the debate!

The competition game

IN THE beginning of 1990, there were about 30 countries with a competition law, but now the number is about a hundred, informs Vijay Kelkar in his foreword to a new book from Academic Foundation (www.academicfoundation.com), titled Towards a Functional Competition Policy for India: an overview edited by Pradeep S. Mehta.

In the intro, one comes across dismal statistics, cited from a 2004 report of the World Bank: "... in India entrepreneurs on average go through 11 steps to launch business, which takes 89 days on average, against a regional average of 9 steps and 46 days." In a sample of 145 countries, India scored the 130th place in terms of number of days to get procedural clearances!

The book compiles more than a score chapters written by experts and the topics covered include evolution of competition policy, the Competition Act, mergers and acquisitions, cross-border competition issues, competition in agriculture, manufacturing, and so on.

Mehta is the founder Secretary-General of CUTS (Consumer Unity & Trust Society) based in Jaipur. And, predictably, there are chapters devoted to the consumer. "Unfortunately, there is no agreed definition of consumer welfare," he writes, before looking at the UN's guidelines in this regard for help.

Consumers have eight rights according to the Charter of Consumers International, and these are about basic needs, safety, choice, redress, information, consumer education, representation, and healthy environment.

Another chapter studies `competition abuses at consumer level' and focuses on `tied-selling in healthcare and education services'.

On `competition and professional services', T.C.A. Anant states that the key feature is that the service, supplied through individuals, is highly idiosyncratic in character, and so services are strictly not comparable across consumers.

This characteristic lays the ground for different types of market failure, which can be due to informational issues, both asymmetric and imperfect, or externalities, comments the author.

A book to keep pace with.

BooksOfAccount@TheHindu.co.in

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