Even as I pen this piece the much delayed merger of the ruling left parties, CPN-UML and CPN (Maoist Centre), remains clouded in uncertainty. One can only hope that the merger would have become a reality by the time you get to read the article.
But damage is being done to Nepal’s polity with every passing day. Can we fault the masses if they feel that the leftist parties are humming and hawing over the unification in their own selfish interests? Both are suspicious of each other despite being ardent devotees of communist ideology. Mere power play is at work. No national interest is involved.
The integrity of our political class is under question, again, alas at a time when the electoral results have created the best prospects for a stable dispensation.
But why am I talking of polity in a business magazine? Because the current political undercurrents provide the perfect peg to discuss the relevance of integrity in any system or process! Obviously, here I shall focus on the significance of integrity in business.
One is reminded of Jon Meade Huntsman Sr’s book ‘Winners Never Cheat: Even in Difficult Times.’ Jon, who passed away at the age of 80 this February, started his business in specialty chemicals almost from scratch and made it to Forbes list of America’s 100 richest persons. Jon’s business touched the $12-billion mark. He forked out well over one billion dollars towards different philanthropic causes, mainly cancer research.
Huntsman never compromised with integrity and honesty and repeatedly proclaimed that he owed his success to integrity. He wrote, “There are no moral shortcuts in the game of business or life. There are, basically, three kinds of people – the unsuccessful, the temporarily successful, and those who become and remain successful. The difference is character.”
Even those who do not always adhere to integrity in business do admit that it is the foundation of success. But the lure of quick money and growth often makes them stray away from the right path. But they soon realise that such success does not last and deprives them of their sleep. Bereft of integrity, business growth remains stunted. Business houses crumble.
Enron used to be the shining star of American business – worldwide. Its top management and senior executives used to boast of their connections even with the US President. Enron tried to step into India by setting up a 2200 MW power project at Dabhol in Maharashtra.
But Enron’s penchant for wheeling dealing led to its bankruptcy and the virtual dissolution of Arthur Andersen, one of the world’s leading audit and accountancy partnerships. How the mighty fall!
While this scam broke in 2001, the worldwide emission cheating scandal by German automobile giant Volkswagen shook the business world in 2015. The company had to spend $ 7.3 billion to cover the scam-related costs, its stock dipped by 17%, credibility went for a six and the CEO Winterkorn resigned.
The year 2009 witnessed the downfall of Satyam Computer Services, one of India’s top five IT companies. Its chairman Ramalinga Raju confessed falsification of accounts to the tune of INR 14,162 crores. Raju was convicted and the India arm of PwC was fined $ 6 million by the US Securities and Exchange Commission for collusion. Satyam was later taken over by the Mahindra group.
The list of scams is endless and includes virtually all industries and all countries. Almost all the time, the culprits behind the scandals are the owners or the top management. They suffer ignominy, loss of their business empires, imprisonment … But they are savvy enough to stash away the ill-gotten wealth in tax havens and similar destinations which are beyond the reach of law. Once freed, they don’t have to exactly beg around for a living.
So who are the worst sufferers? None else but the young business executives whose dreams go up in smoke. They flounder around to find a fresh footing. But with the rotten reputation of their fallen companies they find few takers in the job market. Corporates would not touch them even with a barge pole fearing that they will infect the new company with their dishonest work culture.
The tragedy is that most young managers from the tainted companies are not directly involved in scandalous business activity. Yet their career goes downhill because of their association with dirty companies. Prospective employers tend to believe that these young ones have not been exposed to the practice of integrity and corporate governance. Good companies would not like to vitiate their carefully nurtured work culture by inducting rotten apples.
Though I would not like to name the companies concerned, I am aware of several corporates and groups in the sub-continent which continue to run on archaic and feudal patterns. So deeply entrenched are they in dishonest practices that they refuse to change their way despite fast losing their name and worth. Not willing to approve of their management style the current generations of many such families have refused to inherit these discredited companies. They would not like to let the ‘sab chalta hai’ mental virus infect their modern businesses.
After all, why do management gurus and leading CEOs lay so much stress upon integrity? It is all about building trust – the bedrock of business or for that matter any other relationship. Business leaders are very careful about giving promises. But once they make the promise they follow through on that promise come what may. This builds strong and reliable business-customer relationship. It becomes easier to retain old customers. New ones come driven by good word of mouth.
Trust also cements the relationship between employer and employee and increases productivity. What would a company be without trustworthy and efficient human resource? All other things being equal, human resource is the only differentiator in today’s business.
All this sums up what has come to be known as the reality principle i.e. “seeing the world as it really is, not as you wish it to be.” Leaders with integrity are not afraid of facing the truth. They have the guts to employ people who tell them the truth on their face. They keep yes persons at an arm’s distance. Many companies have perished or are on the decline because of neglecting the reality principle.
And how can a business ignore the value of integrity and transparency with the rapid rise in technology. Dishonest behaviour can be easily tracked online. We can see the predicament being faced by Facebook and Cambridge Analytica currently. Their dubious business practices have been unravelled through technology of which they are masters themselves. What an irony!
Benjamin Franklin once observed, “It takes many good deeds to build a good reputation and only one bad one to lose it.”
Trust and integrity are indeed eternal. That is why what Franklin said in the 18th century rings true even today.
Basant Chaudhary is a Poet, Writer, The Chairman of BLC and Basant Chaudhary Foundation. (firstname.lastname@example.org)