To Illumine, To Imbibe, To Inspire Business with Integrity

“The unexamined life is not worth living”. Immortalized in these words of Socrates, is the task of ethical theory and introspective examination. Ethics as a set of moral values within the business perspective has never had fixed boundaries and the eternal debate has been whether the propensity towards ethical conduct is an inherent quality of human beings or can be inculcated. The Loyola Fraternity aspires to expound this debate further with LIBA BEACON, its first International Conference on Business Ethics, Corporate Governance and Corporate Social Responsibility.

The area of finance has been inflicted with many cancerous issues ranging from IPO scandals, securities scams and insider trading to window dressing, greenmail and agency issues in the corporate consortium. The lack of efficiency and accountability in Public financing is another issue that is a matter of utmost ethical concern in India. There has been a growing emphasis on the need for transparency, trust and concern for clients and issues such as client information confidentiality which also raise issues that garner a lot of ethical consideration especially in the context of banking and insurance. A subject that creates another new dimension to the debate given the increasing trend of Mergers & Acquisitions is the absence of ethics in the game of M&As. Besides these, money laundering and the reduction of capital gains tax through Double Taxation Avoidance Treaties with tax havens such as Mauritius is another ethical issue to be deliberated in the world of investments.

New age marketing is increasingly moving towards the philosophy “Let the seller beware” forcing the seller to take responsibility for the product. But it is not safety of the product or other R&D concerns at the stage of product development that are the only significant ethical concerns that are to be considered. Issues concerning pricing, promotion and distribution require to be looked into and given significance. Advertising issues that raise concerns are those such as approaches adopted whereby advertisements get noticed among a clutter of others through exaggeration or false and misleading ideas. Equally significant are the many ethical dilemmas that the market researcher also faces. He has direct responsibilities to several stakeholders and it is still debated as to whether there really is a binding requirement for ethics in this area of marketing or is the concept of ethics more complex in this particular segment since the potential for ethical wrongdoing stretches from research methodology to reporting and its further uses.

It can be seen that borders are rapidly shrinking by the inescapable phenomenon of globalization and the potential market for most companies has expanded to encompass every nook and corner of the world. Transnational trade has opened up and global business is now dominated by the presence of an increasing number of Multinational Corporations (MNCs) that have spread across continents. With these developments however issues that lend themselves to debate are raised such as the ethics of MNCs’ actions, the neglect of human rights and environmental issues as well as the promotion of free trade especially with a view to aiding poverty alleviation of Third World and developing countries. Global fora such as The Caux Round Table (CRT) and Global Compact have been constituted to promote and ensure that fundamental ethical norms are adhered to and that businesses with cross-border linkages realize their responsibilities to society with a view to ensuring sustainable development especially of poor and developing societies.

Corporate Social Responsibility (CSR) is the continuing commitment by businesses to behave ethically and pause to ponder the impact of their businesses on the global community in general and their key stakeholders in particular. It is also being increasingly realized in business circles that a strong CSR policy is a significant competitive advantage. In a world where corporate image means everything business houses do all that they can to portray a positive image and benefit from it. As a result, corporations increasingly seek to project themselves and want to be looked upon as socially responsible citizens and spend a good deal of time and resources for the promotion of social good. Nevertheless criticisms are often levied at use of CSR as a proactive strategy, questioning the actual motives of a company and claiming that the entire process is an eye-wash meant to enhance the public relations value of the company. The debate still rages on as to whether CSR will ever be altruistic or is just business as usual with it being employed as the perfect strategic tool to enhance the company’s brand.

Being typically perceived in academic literature as dealing with “problems that result from the separation of ownership and control”, Corporate Governance (CG) is a new buzzword, both in business and academic circles. CG systems depend on a set of institutions and systems with laws, regulations, contracts and norms that create self governing firms as a central element of the competitive economy. Though steps are being taken in the right direction and with alacrity there still are several problems and issues that confront India Inc. to put in place an effective Corporate Governance system. Of these, the most important are, Constitution of an effective Board of Directors (including induction of Independent Directors), Role of Auditors in ensuring Corporate Accountability, Challenges faced by the market regulators to ensure better governance and many more. Indeed some corporates have taken up the cudgels and have been facing challenges in implementing corporate governance in their organizations but it is evident that there are no soft options available and that the Indian Corporate sector must necessarily turn to good governance in its pursuit of competitive excellence in a challenging global business environment.

Therefore, the development of a sense of responsibility in the way business is conducted has become critical and the need for inculcation of social consciousness in the corporate world has never been more pressing. Stephen Covey once said, “The character ethic, which I believe to be the foundation of success, teaches that there are basic principles of effective living, and that people can only experience true success and enduring happiness as they learn and integrate these principles into their basic character.” With LIBA BEACON, it is our aspiration to enable this realization of true success with strength of character.