Relevance of Dharma in Corporate Governance

The increase in the size and proportion of organisational
activities over the last century, should have actually led to a proportional
increase in the organisations’ responsibility towards the various constituents
who contribute towards the survival, success and growth of the organisation.
However this has not happened. As seen from the corporate debacles that have
occurred across the globe in the last decade and more, the focus of the top
management became skewed as they started focussing only on one of their
constituents i.e., the shareholders. As a result of this skewed focus,
organisations neglected other constituents of the organisation such as
customers, employees, suppliers, local community and society, government,
environment and the like who are integral to society and hence critical for the
organisation’s survival, growth and success. In other words importance of Dharma
is not realised in Corporate Governance.

The best example to illustrate the need for a holistic
approach to business is the human body. Just as the hands, legs, head, face,
stomach and other external and internal organs are all parts of human body, the
various stakeholders of an organisation are parts of the society. Just as these
organs are all equally responsible for the effective functioning and good health
of the body, the well-being of all the stakeholders appropriately is necessary
for a successful organisation and a good society. If we focus only on and take
care of the face alone because it is most visible and neglect the other body
parts, it would be no good and rather damaging.

The human body itself is an example of perfect integration in
this regard. When a thorn pricks the foot, the eye waters, though they are so
distant. This is because the whole body is one whole and each part reacts to the
pain and joy of the other. Similarly the whole corporate organisation should be
treated as an integrated whole and the welfare of all the organisational
constituencies should be taken care of for the effective functioning and growth
of the organisation.

In a social setting, this can be considered as the Dharma
of the organisation.

The word ‘Dharma’ is a Sanskrit word and has no exact
equivalent in the English language. It defies a simple translation into English.
Though sometimes it is used as an equivalent for the word ‘religion’, it is not
only that. A number of words come very close to explaining its meaning. These
include — right action, truth in action, righteousness, morality,
virtue, duty, the dictates of God, code of conduct and others.

Hawley (1993) defines Dharma, Dharmic and
Dharmic Management in his landmark work ‘Dharmic Management’. He states,
‘The concept of Dharma is affixed to integrity, drawing to it the
energies of goodness, spirit, and fearlessness, creating a sort of super
integrity. The word Dharmic is Sanskrit for deep, deep integrity — living
by your inner truth. Dharmic Management means bringing that truth with
you when you go to work every day. It’s the fusing of the spirit, character,
human values and decency in the workplace and in life as a whole.’

Dharma is not the same for all. It differs based on one’s age
and stage in life. The ancient Indian scriptures highlight a large variety of
differences in the nuances of Dharma based on Desha-Kala-Paristhiti
(place, time and circumstance). These various types of Dharma are :

Hawley in the same seminal work makes his observations in
this context. He states, “Dharma is personal. It is not a one-size-fits-all
set of ethical standards. It’s an inner formula for only the individual. We each
have our own law, or Dharma, peculiar to ourselves. It’s as much a part of us as
our body is, probably more. As with any law, we have to comply with it or suffer
the consequences.”

Again, one’s Dharma is determined by one’s stature and status
in one’s organisation and in society and one is expected to act in accordance
with that for efficient functioning of the society as a whole. In this regard
Hawley states that one’s present status and level of achievement, or role in
life, also affect one’s Dharma. An individual’s Dharma differs according to
where he or she is in life. The Dharma of the CFO, for example, is different
from the Dharma of the accountant. It’s not that the accountant is inferior and
the CFO superior. It’s just that they are in different places in life at this
moment. This will change with time. For now, the differing responsibilities and
leverage that each brings to the table of life earn each of them a distinct
Dharma.

Whatever may be one’s stature or status, position or
situation in life, true perfection is excellence in action. The Bhagavad Gita,
one of the most revered spiritual texts of India also highlights this. It states
— ‘Yogaha Karmasu Koushalam’, which means ‘True Yoga is Perfection in
Action’.

No matter what one’s duty in life, one must do it and do it well. Whether one is a minister or a clerk, no matter what one’s particular role, one must carry it out to the absolute limit of one’s capacity for excellence.

Individual Dharma and Organisation Dharma:

This Individual Dharma can be extended to the organisation as a whole and be termed as Organisational Dharma. This is because an organisation is nothing but a collection of individuals working together towards achieving certain common goals and objectives. Each of these are bound by certain rules and regulations based on the roles and responsibilities allocated to them and they have to achieve the commonly chalked out goals which are in the larger interest of the organisation keeping these in mind. In this light the organisation can collectively be said to have a Dharma.

The collective traits/virtues of an organisation, which are its unique features and characteristics are in recent times represented as the organisation’s vision, mission and core values statements. They are the essential fabric of the organisation and form the core of its culture. Many organisations have a credo or an organisation charter which they adhere to and follow at all times and under all circumstances. One such example is of the Johnson & Johnson credo which the company follows and sticks to even in times of the famous Tylenol crisis.

Management Dharma:

Just as the organisation has its own Dharma, so do the managers working within it have theirs. Their Dharma as individuals differs from their Dharma as managers working in the organisation. As managers, they are the representatives of the collective value system of the organisation and they are trustees of the organisational wealth. Hence, they too have a Dharma.

Hawley expresses a similar opinion. He highlights the fact, “There is a particular Dharma for managers because they are in the responsibility seat. Their actions impact other humans and affect the economic and physical well-being of the organisation and, beyond that, the well-being of the environment and even the planet. With that power comes a greater measure of accountability. Management Dharma, like individual Dharma, matches one’s life station. Managers can’t expect to take the bigger jobs and not take on a broader Dharma. The manager’s Dharma is more demanding, more obligated to rightness, more careful (i.e., more full of care).”

The recent concept of Servant-Leadership coined and defined by Robert Greenleaf highlights the same fundamental. It emphasises the role of a leader as a steward of the organisations’ resources (human, financial and others). It encourages leaders to serve others while staying focussed on achieving results in line with the organisation’s values and integrity.

A Dharmic Organisation and Trikaranashuddhi:

An organisation which can be called Dharmic or a truly ethical organisation or the one pursuing business ethics in its day-to-day practice is the one which tries to ensure to the extent possible, the welfare of all its stakeholders. The true purpose of an organisation as highlighted by a number of studies is to Pareto optimise the welfare of the organisational stakeholders, as they are the ones, who in reality contribute towards the long-term growth and sustenance of the organisation.

‘To ensure the welfare of all concerned’ has been the endeavour and a part of the Indian culture and tradition right from the very beginning. The Indian scriptures have always hailed the ideal of Sarvajana Hitaya, Sarvajana Sukhaya (for the benefit and welfare of all). The excerpt from the Kaivalya Upanishad given below gives an insight into the all-encompassing approach of the Indian culture which has enabled the Indian civilisation (the longest and the only surviving ancient civilisation) to survive the last 5000 years and more.

Swasti Prajabhya Paripalayantaam,
Nyayena Margena Mahim Mahisham
Gou Brahmanebhya Shubhamastu Nityam,
Loka Samasta Sukhino Bhavantu

[May all the Subjects and their Rulers be prosperous; May the Rulers rule on the Righteous Path; May the cows (resources) and the Brahmins (individuals desirous of right living) be safe always; May all the beings in all the worlds be happy.]

The great leaders who got freedom to India and laid down their lives for such a glorious cause and the founding fathers of the Indian Constitution, believed in such noble approach to existence. The following scriptural injunction has been engraved on the entrance wall of the Indian Parliament:

Ayam Nijah Parovaiti Ganana Laghu Chetasam,

Udara Charitaanaam Tu Vasudhaiva Kutumbakam.

(It is only petty-minded individuals who fail to rise above selfishness and keep counting that this is mine and that is yours; on the other hand the large-hearted ones treat the entire humanity as members of their own family.)

In the light of the above it can be said that the complete accord in the corporation’s thought, word and deed — ‘Trikaranashuddhi1’ i.e., its intention of ensuring stakeholders’ welfare, framing policies commensurate with the aforementioned and communicate the same across the organisation, and ultimately undertake activities for realising this intention, is the righteous conduct of the organisation — the Dharma of the company. The Vedic scriptures declare: ‘Manasyekam, Vachasyekam, Karmanyekam Mahatmanaam’ which means, ‘A great individual is the one whose thought, word and deed are in complete unity.’ The same can be extended to a great corporate entity. An organisation whose intentions, communication and actions are in complete unison can truly be called a Dharmic Organisation. It is such scriptural injunctions which inspire and prompt one and all to set high standards of righteous conduct and put into practice these exaltations in day-to-day lives, thereby ensuring the welfare of all concerned — whether at home or at work.

To sum it up, I quote Bhagavan Sri Sathya Sai Baba, Revered Chancellor, Sri Sathya Sai University, Prashanti Nilayam, Andhra Pradesh, “Business should not be swayed by excess profits and wealth maximisation for a few, but should realise the significance of social responsiveness. Therefore, corporate philosophy should be guided by Dharma (Righteousness). A business organisation is to be treated as a place of worship, wherein the entire workforce, by means of sincere work, offers worship to God.” (Source: Man Management: A Values-Based Management Perspective — Based on the Discourses of Bhagavan Sri Sathya Sai Baba)

References:

    Hawley, Jack (1993) Reawakening The Spirit In Work — The Power Of Dharmic Management, San Francisco?: Berett Koehler Publishers.

    Sri Sathya Sai Baba (2009) Man Management?: A Values-Based Management Perspective — Based on the Discourses of Bhagavan Sri Sathya Sai Baba, Sri Sathya Sai Students and Staff Welfare Society (Publications Division), Prashanti Nilayam, Andhra Pradesh.