ETHICS IN BUSINESS AND CORPORATE GOVERNANCE

Ethics is quite old as a subject but in recent years ethics and ethical behaviour in business have emerged as a topic of interest due to mis-governance in corporate houses and banks despite having a well laid governance structure in place with checks and balances in systems and procedure. This is attributed to lack of ethical behaviour and culture.

- Ajay Chandra Pandey

Ethics is the study of right or wrong. It tells you whether your actions or behaviour are morally correct. Ethics includes equity and justice. Business ethics is related to ethical dimension of corporate activities and governance. Corporate governance is controlling the activities of an organisation and directing the organisation to achieve its goal. This controlling and directing has to be ethically correct. History shows that the main reasons of corporate mis governance are immoral decisions either for personal benefit or for a group's benefit. To overcome unethical behaviour and develop an ethical culture in business, it has been felt necessary to include ethics as part of curriculum even in top notch business schools.

Several corporate scandals from Enron to Satyam to Volkswagen and many others not so widely discussed have brought unethical business behaviour to the forefront. Banking being a business working closely with business organisations cannot remain aloof and untouched from the current trend which has infected business practices. A number of banks like Global Trust Bank, PMC bank and Yes bank etc. to name a few have been in news for their poor governance and RBI was forced to step in. Mounting NPAs which have brought banks under pressure, in many cases,are believed to be the result of poor governance practices.