Moral integrity and professional efficiency are two essential pillars of corporate governance in India, crucial for maintaining trust, transparency, and sustainable growth in business operations. Moral integrity refers to the adherence to ethical principles, honesty, and accountability in decision-making processes within an organization. It entails upholding values such as fairness, respect for stakeholders’ interests, and compliance with legal and regulatory standards. On the other hand, professional efficiency denotes the ability to execute tasks competently, achieve objectives efficiently, and deliver high-quality outcomes in a timely manner. In the context of corporate governance, moral integrity ensures that companies operate with integrity and prioritize ethical conduct, while professional efficiency ensures optimal performance and value creation for all stakeholders. An illustrative example can be seen in the case of the Tata Group, where under the leadership of Ratan Tata, the company demonstrated moral integrity by adhering to its core values even in challenging times, such as the decision to exit the tobacco business due to ethical concerns. Additionally, professional efficiency was exhibited through strategic initiatives like the acquisition of Jaguar Land Rover, which contributed to the group’s growth and global presence while maintaining financial discipline and operational excellence. These examples underscore the significance of moral integrity and professional efficiency in fostering sustainable corporate governance practices in India.
Answer:
Corporate governance is the combination of rules, processes and laws by which businesses are operated and regulated. It encompasses external and internal factors that affects the interest of a company’s stakeholders, including shareholders, customers, suppliers, government regulators and management.
Moral integrity and professional efficiency are two pivotal values of corporate governance.
Moral integrity in corporate governance in India -:
- Moral integrity refers to steadfast adherence to ethical values and principles that enables rectitude behaviour.
- It involves honesty, fairness, transparency and accountability in the decision making as well as day to day process.
- Presence of moral integrity helps to avoid the GANDHIAN SIN of “commerce without morality” which often results into corruption, conflict of interests, legal troubles,scams and scandals.
• For example –
o TATA Group is known for moral integrity and ethical conduct reflected via mass campus placements, sustainable products, good customer service and CSR activities.
o In contrast we have seen mass layoffs during COVID or the Pharma companies duping customers with substandard products – Johnson and Johnson faulty hip transplants.
Professional efficiency in corporate governance in India
- Professional efficiency refers to efficient utilisation of resources, by the organisation and its employees so as to achieve organisational goals.
- It includes the virtues of frugality, resourcefulness, time management, team building, innovation, risk mitigation etc.
- Professional efficiency is quintessential to ensure productivity, profitability and sustainability in business operations.
• For example –
o HDFC bank’s proactive measures helped it to keep its NPA levels to comparatively lower levels, Zomato’s food delivery guarantee within stipulated time, else refund coupons etc.
o Many new fintech companies and startups are struggling to take off due to low level of professional efficiency.
Therefore, Ethical corporate governance imbibing the values of ‘moral integrity and ‘professional efficiency’ can go a long way in enhancing the global standing of Indian corporates. For ensuring this, framing a code of Corporate Governance and implementation of Kotak Committees’ recommendations can be a good way forward.
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