At the conclusion of the National Council meeting of the Confederation of Indian Industry (CII) held in Chennai on July 5, the CII President-designate and Chairman of its Task Force on Transparency and Integrity in Governance, Mr Adi Godrej, unveiled an eight-point Code of Business Ethics seeking to sensitise its 8,500 members to the values and principles that should govern their conduct with all stakeholders in respect of all forms of business.

I have used the word ‘sensitise' advisedly, because the Code, as admitted by Mr Godrej himself, is not binding on members and hence, does not incorporate any disciplinary or penal provisions for non-compliance. The observance of the code on the part of members is entirely voluntary. One can only hope that its call to members to encourage whistle-blowing and the necessary arrangements that it has promised to establish for reporting any actual or possible violation would impart a sense of accountability among members.

Follow the ‘right path'

There is a problem in monitoring, though. In its present form, the code is nothing more than a homily on the social responsibility and moral obligation of the members, who are expected “to behave with integrity, to be responsible and compliant, to abide by the law, and to have high ethical and moral standards”.

The general reaction of anyone who goes through the code will be that it is much too broad in its language and wording. For the most part, it is a reminder of BOMFOG (to use the delectable terminology coined by the Americans) which expands into the universally desirable “Brotherhood of Man and Fatherhood of God”!

Asking members to follow the “right path” to achieve one's goals is neither here nor there, because it is a precept that goes back to the dawn of history. That apart, the new doctrine known as “situational ethics” that has been in vogue for some decades holds that the right path itself is amenable to compulsions of particular situations!

Thus, the contents of the code are unexceptionable but without any specific pointers to concrete courses of action. A sampler: “All practices and business conduct should have the foremost objective of serving the national interest.” “Do not use official position to influence any person or body for any personal gains or favours.” “Perform due diligence specific to anti-bribery and corruption when evaluating mergers and acquisitions and joint ventures.”

Further tightening

One is happy that on bribe-giving and receiving, the code is categorical in tone: “No employee or company representative shall pay, or offer to pay, a bribe, or provide any other object of value for the purpose of obtaining a benefit, to any third party, public or private, with whom the company is doing business. No one should receive a bribe from any source.”

The code's credibility and effectiveness will be further enhanced if it is tightened in the following respects : All members should be required to disclose to their stakeholders any contributions they make to political parties or any business deals they enter into with any firms in which politicians have stakes.

Likewise, they should make known the names of any lobbying or public relations firms they engage to do liaison work for them, and those of any relatives of politicians, media outfits or officials of government or public sector who are employees of member companies. They should make available on demand to all stakeholders and the public and publish in their Web sites a complete directory of all their executives to the level of managers with their residential and official telephone numbers, mobile numbers and email IDs so as to be fully accessible and answerable to the people.

The member companies should also publish on their Web sites the compensation packages and moveable and immovable assets of all their senior executives. Finally, federations of industry and commerce and their member companies should, in the interest of transparency, agree to bring themselves on an informal basis within the purview of the Right to Information Act.

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