Corporate Ethics \u0026 Governance in an Inclusive Growth Framework

$Page 1: Corporate Ethics \u0026 Governance in an Inclusive Growth Framework$

N.Balasubramanian is Visiting Professor of CorporateGovernance at the Indian Institute of Management Bangaloreand Ahmedabad, and the former Founding Chairman of the Centrefor Corporate Governance and Citizenship, Indian Institute ofManangement Bangalore,E-mail: [email protected];[email protected]

By Invitation

Corporate Ethics & Governance in an Inclusive GrowthFramework

N.Balasubramanian

Inclusivity connotes active participation ofthe largest number of people in the creationand sharing of wealth and prosperity to thegreatest equitable benefit of all . Suchwellbeing and happiness are dependentupon the adequate and timely productionand delivery of goods and services at af-fordable prices; this role is assigned by so-ciety to firms and individuals to efficientlyproduce and effectively distribute to theconcerned segments of buyers in need. Thuslicensed and sanctioned by society, business– especially in the corporate format - hasits purpose well set out. Failure to aligncorporate initiatives with the inclusivityobjectives of the state will likely lead to im-pairment and erosion of corporate freedomof choice to govern itself. This paper ex-plores how business should and could alignachievement of its profit-oriented objectivesalongside satisfactorily addressing the everchanging societal requirements so as to sus-tain itself on an ongoing basis creating bothnational wealth and shareholder returns.

Introduction

“The community can’tride one track and busi-ness another. The two areinseparable, interactiveand interdependent”Cleo F Craig, FormerPresident and BoardChair, A T & T

In the context of theState as represented by thegovernment of the day,inclusivity is a concept thatconnotes active participa-tion of the largest numberof its people both in the cre-ation and sharing of wealthand prosperity to the great-est equitable benefit of all.Such wellbeing and happi-ness – despite the variationsin their connotation to dif-ferent people – are depen-dent upon the adequate andtimely production and deliv-ery of goods and servicesat affordable prices; thisrole is assigned by societyto firms and individuals to

571 The Indian Journal of Industrial Relations, Vol. 46, No. 4, April 2011

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efficiently produce and effectively dis-tribute to concerned segments of buyersin need. Thus licensed and sanctioned bysociety, business – especially in the cor-porate format which is the focus of thispaper - has its purpose well set out andcan proceed to carry out its operationsto fulfil societal objectives, along the wayalso earning an adequate, even attrac-tive return for its shareholder owners.

Given this framework, how businessshould and could align achievement ofits economic profit-oriented objectivesalongside satisfactorily addressing theever changing societal requirements soas to sustain itself on an ongoing basiscreating both national wealth and share-holder returns is the subject explored inthis article. Section 1 sets out the inter-dependent relationships between andamong business, society and the statewhile section 2 outlines the ethical ra-tionale and public policy imperatives ofeconomic development and the practi-cal problems encountered in equitablyand inclusively spreading the benefits ofsuch development among the population.Section 3 discusses the theoretical un-derpinnings of for-profit corporationsand their struggle to meet and managethe often non-congruent goals of theirstakeholders including the state. Section4 explores some of the measures thatcould align corporate profit objectiveswith societal objectives, specifically ofinclusive development. Section 5 con-cludes with a reiteration of the businesscase for incorporating inclusivity objec-tives of the state in the corporation’sstrategy and conduct.

1.Business, Society & the State

Government in most circumstancesconnotes the executive function of pro-tecting the community from externalthreats as well as internal strife and dis-cord among the populace. Among its ear-liest manifestations was the institution ofa king to discharge these responsibilities.In the Indian tradition, the king was en-trusted with the role of protector and law-enforcer of his subjects; in this task, hewas guided by a vast set of principles andrules to be obeyed by the population un-der the pain of punishment for non-com-pliance generically referred to asDandaneeti or the postulates of punish-ment to be administered fairly and with-out any discrimination (Ganguli 2000: 121-29)1 . The 18th century BC Code ofHammurabi was a similar edict transpar-ently publicized for general informationsetting out the do’s and don’ts and thepunishments for breach (with the under-lying dictum of an eye for an eye and atooth for a tooth)in the ancientBabylonian kingdom (Lewis 2003: 7-12).Aristotle, the fourth century BC philoso-pher, summed up with great simplicity theobjectives of the state: “Every state is asort of association and every associationis formed for the attainment of some Good… [and] supreme Good, the object of thatassociation which is supreme and em-braces all the rest, in other words, of theState or political association” (Lewis 2003:50). That the purpose of the state or the

1. These copious discourses on Rajadharma, orstatecraft are available in the ancient epicMahabharata, in the chapter titled SantiParva.The cited reference is from section LIX from thisParva, in Volume III of the book.

Corporate Ethics & Governance in an Inclusive Growth Framework

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government was essentially to promotegoodness or wellness among its people,besides of course protecting them fromexternal aggression whenever that oc-curred (and often also initiating such ag-gression over others in the interests of pre-emptively protecting or further enhancingthe wellbeing of its constituents) has beenrepeatedly stressed by succeeding gen-erations of philosophers and political sci-entists, allowing for due differences in ide-ologies. The critical question however hasalways been how the state should go aboutdischarging this assigned responsibility.Obviously the state cannot itself produceand/or distribute the required products andservices as efficiently or effectively as theprofit-driven entrepreneurial merchantsand businessmen2 . Delegating businessoperations to the competent and the moti-vated, while certainly improving produc-tion and delivery, was fraught with thepotential for exploitation and abuse forprivate gain. Adam Smith (1776:709), theeighteenth century Scottish moral philoso-pher and political economist, referred tothis ingrained phenomenon when he fa-mously alluded to the powerful “desire ofbettering our condition, a desire which …comes with us from the womb, and neverleaves us till we go into grave.” This hu-man trait spills over to the corporationswhich, although endowed with an indepen-

dent identity and corpus by a sleight ofthe law, continues to function through, andonly through the human medium whichinevitably brings along its baggage of self-interest, greed and personal gain. This hadto be countervailed by mandates and regu-lations under pain of punishment for theirviolation. These measures in public inter-est were intended to protect the freedomof the people in terms of their choice, cost,health, happiness and welfare. Both theinclination towards a propensity for per-sonal profit and the need for, and compli-ance with, regulatory interventions by thestate were emphasized by Nobel Laure-ate, Milton Friedman when, in the wakeof some strident support for corporatesocial responsibility, he wrote: “… onlyresponsibility of business [was] to … in-crease its profits, so long as it stays withinthe rules of the game …” (1962: 133)(emphasis supplied). These rules are themandates on behaviour businesses arerequired to comply with in public interestsuch as free and fair competition and es-chewing of deception, even as they goabout their activities with the profit mo-tive.

Delegating business operations tothe competent and the motivated,while certainly improving produc-tion and delivery, was fraught withthe potential for exploitation andabuse for private gain.

One will also have to recognise thepotential for mismatches between theaspirations of the people on one hand andthe agenda of their elected representa-tives in a democracy or the powers that

2. This may not necessarily be so obvious in statesadopting centralized planning and stateownership and control of industries, businessesand other required activities. India’s industrialpolicies of 1948 and 1956 reserved for the statelarge chunks of industrial production and manyconsumer goods industries. The public sector wascharged with the task of achieving commandingheights in the country’s business scenario

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be in case of other forms of government.Having been entrusted with the requisiteexecutive authority to govern and thephysical (often violent) means of enforce-ment to ensure strict obedience by thegoverned, it is quite conceivable, as hasoften been the case, that the will of thegovernment of the day being at signifi-cant variance with the will of the people.The protector can and often does turnpredator preying on its own population(Mill 1859). In that event the shroud thatblankets the differing personae of thestate and society gives way to disclosethe chasm that may exist between theaspired and the achieved, another analo-gous instance of what Galbraith (2004:ix) had labelled innocent frauds .

The protector can and often doesturn predator preying on its ownpopulation.

There is thus a continuing tension be-tween and among the three pillars of busi-ness, society and government in terms oftheir respective rights and obligations.When the equilibrium level is reached andmaintained, there is cohesion in the realmensuring appropriate service delivery andinter se discipline with due regard to re-spective roles and restraints. Any signifi-cant deviations in the exercise of author-ity or discharge of duty lead to societalunrest that can only be resolved by cor-rections restoring the equilibrium.

The message is therefore quite clear:society permitted businesses to freely op-erate to meet its needs at reasonable costs- monetary, social and environmental - and

was not averse to the entrepreneurialclass making a profit for themselves in theprocess so long as it did not breach man-dated requirements of the state made inpublic interest. Business thrived when dulycomplying with or even excelling the pre-scribed or desired regime; disaster andeven demise were the result otherwise.

2. Development & its LimitedBeneficiaries

Despite the perennial quest for im-proving the quality of life of people in ev-ery society and the demonstrable evidenceof some success as measured by metricssuch as growth in GDP, per capita income,wellness indices and so on, it is indeedironic that no nation around the world atany time has reached a desired ideal levelwith little or no scope for further improve-ment! Partly, this continuing gap betweenthe ideal and real worlds of universalwellness can be attributed to the persis-tent human tendency of raising the bar andmoving the goal posts of the connotationsof wellness. This phenomenon was wellcaptured in the insightful hierarchy ofwants and needs that Maslow (1943,50:370-96) postulated decades ago. Aspeople move up the scale of wellness, theirdesire for even better levels continuesunabated. The stage of economic pros-perity achieved in a society also dictatesthe expectations of its people. Thus whilea developed economy may not approveof certain polluting and hazardous tech-nologies, less developed nations may notbe averse to hosting them in their coun-tries if they offered better opportunitiesfor employment and earnings. While theethics of such dispersal of industries are



indeed questionable – what MeghnadDesai (2009: 380) called “shaming ex-amples of …. moving … polluting plantsaway from where the laws are strict, ex-porting [them] to where poverty and cor-ruption allowed unhindered activity”3 - thechoices before such countries and societ-ies may well be limited. Similar is the casewith child labour: while no one would ar-gue in its favour, the harsh reality often isthat such employment may well be theonly source of sustenance to some fami-lies until society is able to find an equi-table alternative solution to the problem.

Such (child) employment may wellbe the only source of sustenanceto some families until society isable to find an equitable alterna-tive solution to the problem.

And yet, even with the best will in theworld, it is practically impossible to en-sure in absolute terms distributive justiceequitably to all or even a substantially largemajority of all the members constitutingthe society. The chasm between the havesand the have-nots keeps widening inexo-rably; while developmental efforts of thestate certainly enlarge the size of the dis-tributable cake (as measured, for example,

by the growth in absolute GDP), an in-creasingly larger slice of that cake seemsto be sequestered by a progressivelysmaller proportion of the population (assuggested by an escalating number of mil-lionaires and billionaires) in the country.In other words, the impressive outcomesof development and its associated pros-perity seem to be bypassing a vast pro-portion of the population, which is left outof the party. Bringing such people back into the field covered by the footprints ofprosperity and wellness is the principalobjective of inclusive initiatives that thestate enjoins on society.

The call for inclusivity is all the morepressing in case of least developed coun-tries. An Eminent Persons Group consti-tuted by the UN Secretary General con-cluded (UN 2011:39):“The story told bythe economic and human developmentexperience of LDCs over the last fewdecades, particularly when compared tothe experience of other developing coun-tries, is not an encouraging one. Whilethere has been some individual countrysuccesses in specific areas, as a group,the LDCs have become more “least de-veloped” over the last three decades.”

But the phenomenon is not entirely in-applicable to developed regions and nationseither. A telling example is that of the Eu-ropean Union which is striving to bringabout greater inclusivity among its mem-ber countries with a blueprint of objectivesto be achieved by the year 2020 (EU 2010:16) as: “Inclusive growth means empow-ering people through high levels of employ-ment, investing in skills, fighting poverty andmodernising labour markets, training and

3. Desai was commenting upon the Union CarbideCorporation, the Indian subsidiary of which wasoperating a manufacturing facility in Bhopal inthe central Indian state of Madhya Pradesh,producing chemical fertilisers using a highlyhazardous process without ensuring attendantsafety precautions that led to the worst industrialaccident in history when a lethal gas leak inDecember 1984 killed, maimed, and geneticallyimpacted several thousands of people in andaround the factory.

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social protection systems so as to helppeople anticipate and manage change, andbuild a cohesive society. It is also essentialthat the benefits of economic growth spreadto all parts of the Union, including its out-ermost regions, thus strengthening territo-rial cohesion. It is about ensuring accessand opportunities for all throughout thelifecycle. Europe needs to make full use ofits labour potential to face the challengesof an ageing population and rising globalcompetition. Policies to promote genderequality will be needed to increase labourforce participation thus adding to growthand social cohesion.”

In India, development and empower-ment of socially disadvantaged groups(comprising largely scheduled4 castes(SC), scheduled tribes (ST), and otherreligious minorities) and bringing them atpar with the rest of the society is a con-stitutional commitment, through specificarticulation of fundamental rights and di-rective principles of state policy. The Plan-ning Commission of India (2006: 85-86)enumerated some of the key measuresrelating to education required to be takento accelerate inclusivity in the country’sdevelopment effort: “Education is one ofthe most effective instruments of socialempowerment and is vital for securinghorizontal and vertical mobility. Schemesfor the educational upliftment of the SCsand STs have borne fruits although thegap…….. is still at unacceptable levels.

Educational schemes in favour of thesesections therefore need to be continuedwith redoubled vigour…… it is impera-tive to promote education among all otherbackward sections including minorities,particularly among poor Muslims, whohave fallen far behind the national aver-age in all aspects……. It is neces-sary…….. that remedial measures can betaken during the 11th Plan.”

Mandating Inclusivity

The Indian Prime Minister, ManmohanSingh in a 2007 address to the captains ofIndustry in Delhi referred to the guidingprinciple of his Government as: “while sus-taining higher rates of economic growth,the improved performance of the economymust contribute to employment generation,poverty reduction and human develop-ment,” and “The aim of each of our flag-ship programmes is to ensure that growthis more equitable and that it empowers themost deprived of our citizens”5 . He out-lined a Social Charter of a ten-pointprogramme for inclusive growth and invitedindustry to partner with the government intheir efforts. Industry welcomed these sug-gestions aimed at capabilities building on avoluntary basis and proceeded to producean Affirmative Action Report calling uponcorporations to contribute to the capabili-ties building efforts of the nation.

While the capabilities maximizationtheorem has received virtually universalacceptance around the world, govern-4. Various castes and tribes have been identified as

weaker and vulnerable sections of societydeserving special protection and affirmativeaction; these have been enumerated in schedulesto the constitution, hence the terminology,scheduled castes, scheduled tribes etc.

5. Speech at the CII annual general meeting – 2007,on May 24 2007; [accessed on 16 April 2011]h t tp : / /pmind ia .n ic . in / speech /con ten t4print.asp?id=548



ments of the day have also coped withthe “here and now” situations on theground and responded to the expectationsof their people impatiently awaiting de-liverance from their unenviable predica-ment. These pressures tend to push thestate towards adopting an outcomes-based approach instead of the more ra-tional but time consuming competenciesbuilding approach. Certain proportions ofjobs or seats are reserved for the ex-cluded classes at the expense of otherswho may be better equipped for the jobor seat. This tends to create a sub-opti-mal situation where to achieve inclusivityfor the excluded the state is obliged tocreate another group of excluded partici-pants who ought to have been included!

The Indian Prime Minster’s (2007) ad-dress was an uncharacteristic mixture ofpressure and persuasion, and bears quot-ing if only to highlight the thin dividing linebetween counsel and mandate: “I alsoknow that increasingly you benchmarkyourself against global practices. I appre-ciate the fact that a corporate entity’s pri-mary responsibility is to its shareholdersand to its employees. Your businesseshave to be globally competitive. However,even to win this race, you must work in aharmonious environment, an environmentin which all citizens feel equally involvedin processes of economic growth; an en-vironment in which each citizen sees hopefor a better future for him and for his orher children. ……In a modern, democraticsociety, business must realize its wider so-cial responsibility. The time has come forthe better off sections of our society - notjust in organized industry but in all walksof life - to understand the need to make

our growth process more inclusive; to es-chew conspicuous consumption; to savemore and waste less; to care for thosewho are less privileged and less well off;to be role models of probity, moderationand charity”.

The industry did not accept and in factstrongly lobbied against mandatory reser-vations in the private sector for-profitbusinesses. In its Affirmative ActionImplementation Report (CII 2007), it wasargued: “Indian industry had assuredPrime Minister Dr. Manmohan Singh thatit would draw up a robust AffirmativeAction plan and it is Indian industry’s con-tention that a beginning has been made toaddress a challenge which is very novelfor industry and which addresses a lot onthe Indian society which goes back sev-eral millennia. It would be counter-pro-ductive..…. for political expediency torevive the demand for job reservations inthe private sector. For one, such a mea-sure will not amount to many jobs on theground.” There are as yet no such imposedrequirements, but it is fair to speculate thatthe jury on this is still out.

Revisiting the Exluded

Creation of wealth involves entrepre-neurial, technical, artistic and other sun-dry skills: it also requires an environmentwhere opportunities exist either naturallyor are created by the state. Reservationsof certain industries and avocations toorganisations of certain size or status, aswas substantially the case in India priorto economic liberalisation towards the endof the last millennium, or restricting for-eign direct investment in certain industries

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and sectors, are clear cases of discrimi-nation. This however is not to suggest thatsuch restrictions are not required: theymay be justified on grounds of protectingdomestic and smaller industries from un-fair competition and hence considered inthe larger interests of the society. It mayhowever be prudent to limit these protec-tions to a finite period of time so that theultimate consumers are not denied thebenefits of competitive business for ever.A related issue is the need to provide op-portunities to a larger pool of societal con-stituents to acquire such skills; any impedi-ments to acquiring such skills would mili-tate against the concept of inclusive de-velopment. Lack of adequate higher edu-cational facilities offering such instructioneither by design or just serendipity is thusa disservice to the cause of inclusivity. Asan interim measure (until such additionalfacilities matching the demand are put inplace) affirmative action such as reserv-ing a reasonable proportion of extant fa-cilities to those who may not qualify onstricter criteria of admission may be justi-fied as a lesser evil in larger interests,even though this measure may unfairlydeny such opportunities to those whowould otherwise have qualified; in fair-ness to those thus likely to be so deprived,such measures need also have to be re-viewed and removed in a time-boundschedule. Equity would demand that in-clusive initiatives in the longer run be an-chored on the principle of providing op-portunities and not just outcomes: equiplarger sections of the population to com-pete for the opportunities, refrain fromquasi-permanently assuring results with-out enhancing competencies. The oft-quoted assertion of Jack Welch, then CEO

of General Electric Corporation in the US,that his company’s objective was not toguarantee employment but certainly assureemployability through training and educa-tion is an example of how this principlecould be effectively applied in practice.

It may however be prudent to limitthese protections to a finite periodof time so that the ultimate con-sumers are not denied the benefitsof competitive business for ever.

The second dimension is the more un-acceptable and unjustified in the contextof inclusivity and has to do with traditionalbarriers based on ethnicity, genealogy, ge-ography, gender, physical or mental chal-lenge, and so on. Virtually every countryin the world seems to have suffered fromthese prejudices at some time or the otherduring their evolution. Slavery in the USSouth, anti-Zionism in Nazi Germany,apartheid in South Africa, racial superi-ority in Britain of the whites over thebrowns and blacks, the white-Australiapolicy and the marginalization of nativeaborigines in Australia, the caste-and-tribes-based regimes in India, the intoler-ance of practitioners of other religions intheocratic states, and scores of other suchexclusions have over the centuries meantdenying opportunities to fellow humans onthe basis of one or the other of the manyunacceptable dogmas. Many of them con-tinue till date even where formally out-lawed: racial profiling of and discrimina-tion against Sikhs and Muslims in manyparts of the world, notably in the US,France and more recently Italy, subjuga-tion of women on religious grounds in



many Islamic countries, the ongoing illtreatment of the so called untouchablesand the tacit tolerance of “honour killings”in case of cross-religious-or-communalmarriages in India, and so on offer starkproof of the unsuccessful attempts by re-formers around the world against the out-dated legacies of the past. Export of un-tested or unacceptable products, servicesand technologies to underdeveloped coun-tries (briefly referred to earlier), pharma-ceutical field testing on animals and hu-mans in the third world, and glass ceilingsin case of career women are some of theother prejudices that still militate againstethical behaviour and human dignity andagainst inclusive development of theirpeoples and resources that countriesacross the world profess to strive for; it istime that we began fully “walking thetalk.”

3. Towards a Regime of CaringCorporations

The 18th century Industrial Revolu-tion in the UK signalled the advent of ma-chines in manufacturing operations, in-cluding the ginning wheel and processtechnology, and the legendary steam en-gine which powered the growth of railroads both in the UK and the USA. Allthese ventures required finances beyondthe reach of small groups of individuals,thus offering a fillip to the formation ofjoint stock corporations. The substantialfunds required to finance such expedi-tions had to necessarily be raised fromthe “public” that went beyond kith andkin. In effect, the traditional concept that“owners managed and managers owned”gave way to a situation where owner-

ship of the business in varying propor-tions was held by a large number ofpeople who had nothing to do with themanagement of the actual business. Thiswas undertaken by the “dominant” own-ers or, in later times, hired managers and/or professional executives with the req-uisite skills. The event that catalysed thegrowth of the joint stock companies inEngland was of course the cautious andcontroversial legislation of the limited li-ability provisions in 1855 and 1856. Thesemore than achieved the stated objectivesof encouraging risky innovations and ex-peditions which individuals and collec-tives could not have embarked upon hadnot their personal exposures been cappedby these limited liability provisions.

The modern corporation promisesto be a continuing challenge tosociety’s ability to harness its po-tential benefits while concomi-tantly attempting to contain its illeffects.

Modern corporations are, and for quitesome time have been, a significant part ofpeoples’ lives. For example, the Global Top200 corporations’ combined sales werereported to be bigger than the combinedeconomies of all world countries barringthe ten biggest. Among the largest econo-mies in the world, 51 were found to becorporations while the remaining 49 werecountries, based on a comparison of cor-porate sales and country GDPs. Theirsheer size, reflected in their financial andpolitical clout, has predictably caused anadverse reaction among world citizenswondering how to balance the positive and

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negative impacts of such mammoth enti-ties (Business Week 2000). As a productof economic freedom and entrepreneurialaggression, the modern corporation prom-ises to be a continuing challenge tosociety’s ability to harness its potentialbenefits while concomitantly attempting tocontain its ill effects.

Whose Corporation Is It Anyway?

Corporations and their account-ability have been the subject of manyconceptual and political debates, butthe most dominant of these has beenan ongoing discussion as to whetherthe company, its board, and executivemanagement should be accountableexclusively to the shareholders, fol-lowing the residual claimant theory(Easterbrook & Fischel1991) , 6 orwhether their accountability and re-sponsibility should extend to otherstakeholders as well. There have beenmany staunch supporters of the viewthat the company was accountable tonone other than the shareholders;Elaine Sternberg (2004), among oth-ers, contends that the stakeholdertheory “destroys, rather than supports,conventional corporate accountabil-ity.” Equally, a contrary view that theinterests of other stakeholders shouldalso be taken care of has been steadilygaining ground (Bala 2010:98-102,OECD 2004, Principle IV).

Most modern corporate gover-nance codes and guidelines seemto be cautiously moving towards aposition that in some measuretakes cognizance of stakeholderclaims on the corporation.

An OECD advisory group7 chaired bythe legendary corporate governance ex-pert, Ira Millstein and included the iconic.Adrian Cadbury among others,summarised the position in 1998 admira-bly: “Companies do not act independentlyfrom the societies in which they operate.Accordingly, corporate actions must becompatible with societal objectives con-cerning social cohesion, individual welfareand equal opportunities for all. Attendingto legitimate social concerns should, in thelong run, benefit all parties, including in-vestors. At times, however, there may betrade-offs between short-term social costsand the long-term benefits to society ofhaving a healthy, competitive private sec-tor. Societal needs that transcend the re-sponsive ability of the private sector shouldbe met by specific public policy measures,rather than by impeding improvements incorporate governance and capital alloca-tion.” Most modern corporate governancecodes and guidelines seem to be cautiouslymoving towards a position that in somemeasure takes cognizance of stakeholderclaims on the corporation. In India, for ex-

6. This theory argues that the accountability is onlyto the shareholders on the ground mainly thatthey stand last in the pecking order of claims,when a company’s liabilities are settled, and alsobecause they take the risk and use theirdiscretionary power to allocate resources.

7. Corporate Governance: ImprovingCompetitiveness and Access to Capital in GlobalMarkets, A Report to the OECD by the AdvisoryGroup on Corporate Governance (1998),Organisation for Economic Cooperation andDevelopment, Paris.



ample, listed companies are exhorted topursue enhancement of shareholder value,keeping in view the interests of otherstakeholders (SEBI 2000).

Inclusivity as Equality

To be included is to be treated asequal with the rest in the group. Suchequality can be in terms of opportunitiesor of outcomes. As the expert group onEqual Opportunity Commission percep-tively explained: “The idea of ‘equality ofopportunity’ has a much wider appeal thanthe idea of equality itself. Equality of op-portunity may or may not lead to equaloutcomes; the concept suggests a fairrace at the end of which some participantsget rewards, others don’t. Unequal re-wards are morally acceptable – indeedeven desirable – as long as everyone hadan equal chance in the race, and as longas the unequal rewards were due only tounequal ability or effort. Thus the idea ofequality of opportunity is in principle com-patible with inequality of outcomes; it of-fers an equal chance to be unequal.”(Menon 2008 :16). In the context of ourfocus on for-profit corporations success-fully operating in a framework of desir-able inclusivity in society, this emphasison capabilities (Sen 2009: 293-98) inimplementing a sustainable equal oppor-tunities programme is inescapable. Theprescription is not necessarily to inflictsub-optimal competencies on the organi-zation but rather to provide opportunitiesfor levelling up such strengths throughmeaningful training and exposure initiativesthat would stand the organization in goodstead even while affording opportunities inexcess of extant levels of capabilities.

Inclusivity as CorporateResponsibility

The egalitarian view of the moderncorporation has gradually embraced andaccepted a position of holistic responsi-bility towards society and its constituentseven while pursuing its profit objective.Evidence of this transformation –whetherout of conviction or compulsion - is avail-able in the large number of corporationsaround the world and in India publishingsustainability reports of their perfor-mance and goals in respect of the im-pact of their businesses on society andthe environment besides of course theireconomic performance in terms of prof-its. A large number of statutory provi-sions also impose upon corporates mini-mum public interest requirements in re-lation to several of these matters. Oneshould not of course lose sight of the factthat these provisions usually represent thelowest common thresholds that are ac-ceptable to the political equations of theday. The more enlightened corporationsand their boards and executive usuallyaim to raise the bar and achieve higherlevels of performance than mandated.

Besides, there are also gentle andat times not-so-gentle persuasions fromthe government and other stakeholdersfor adoption of measures as yet notmandated. The voluntary CSR guide-lines of the Indian government (MCA2009: 10) are a case in point. The Pre-amble to the document leaves one inno doubt that the prescriptions, euphe-mistically labelled Guidelines, are infact a comply-or-explain direction tothe corporate sector in India: “While it

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is expected that more and more com-panies would make sincere efforts toconsider compliance with these Guide-lines, there may be genuine reasons forsome companies in not being able toadopt them completely. In such a case,it is expected that such companies mayinform their stakeholders about theguidelines which the companies havenot been able to follow either fully orpartially.”

While one may or may not whollyendorse all the guidelines provisions, itis undoubtedly a strong indicator of thewinds of change as to what the societyand its elected government have cometo expect from business corporationsin terms of their impact on society. Inthe context of inclusive development,the guidelines (:12) postulate: “Depend-ing upon their core competency andbusiness interest, companies should un-dertake activities for economic andsocial development of communities andgeographical areas, particularly in thevicinity of their operations. These couldinclude: education, skill building for live-lihood of people, health, cultural and so-cial welfare etc., particularly targetingat disadvantaged sections of society.”

Inclusivity Areas for Corporations

Given the basic premise thatinclusivity seeks to bring on board thosewho are left out of benefiting from cor-porate opportunities, businesses will in-deed have to cope with a very vast ar-ray of claims for attention. Broadly,these would relate to the three dimen-sions of impact that corporations have

– economic, social and environmental.Under each of these, issues will arise inrespect of the relevant stakeholders –financiers including shareholders anddebt providers, employees, vendors, cus-tomers, the societal communities whereorganization is present, and the govern-ment.

4. Embedding Inclusivity inCorporate Governance

The board of directors in a corporateformat occupy a unique position of author-ity and responsibility; they are trustees ofbeneficiaries ranging from shareholders(exclusively in a principal-agent construct)to numerous stakeholders who can affect,or who are affected by, the corporation(Freeman 1983). Cadbury (1992) placedthe corporate board “in the centre stageof the governance system.” Similar is theposition of the board in India where it issupreme as far as the company is con-cerned, subject only to the laws of the landand restraints the shareholders may im-pose through the company charter docu-ments and subsequent decisions in gen-eral meetings of members. Every right en-joins corresponding obligations as well andhence the onus of devising and implement-ing through the executive, strategies andinitiatives for building in the requiredinclusivity measures squarely resides in itsrealm. How well the board discharges thisresponsibility will decide the sustainabilityand prosperity of the company itself. Wediscuss four key dimensions (among sev-eral others) of this challenging task here:employment, environment, communities,and shareholders. These are not mutuallyexclusive watertight compartments and



there would inevitably be significant over-laps between and among these facets.

Inclusivity & Employment

Encompassed in this dimension areat least four sub-themes dealing withemployment creation and accessibility toas wide a population as possible consis-tent with required competencies, conge-nial working environment free from in-tended or unintended discrimination orharassment, a developmental ambiencewhere gaps in individual competenciesare closed to the extent possible, andapplication of such principles and prac-tices to an extended value chainworkforce engaged in outsourced-con-tracted out operations and the entity’svendors-suppliers network. Embedded inthese initiatives will be the recognition ofbasic human rights and dignity of indi-viduals, as well as internal information andassurance mechanisms to monitor andreport adherence with, and breaches ofdesired and prescribed processes forboard review and action.

Announcing (as many organisationsdo) a policy on equal opportunity employ-ment by itself may be dysfunctional un-less matched with measures ensuringsuch equal opportunities are in fact pro-vided at the ground level. Many leader-ship companies have a practice of an-nouncing upcoming senior job vacanciesacross the organisation, often internation-ally, so that all people with requisite ex-pertise have the opportunity to competefor the job, which otherwise may be re-stricted only to those within the geographi-cal or functional location. In case of re-

cruitments from outside the organisation,inclusivity policies would provide for freeand open access to consideration basedonly on the competencies and specificallyexcluding any adverse bias on grounds ofage, colour, gender, religion, caste,ethnicity or other such considerations.8

Such policies have to be not only in placebut also seen to be practised as a matterof course. Managing perceptions - suchas for example the glass ceiling syndromein case of women9 - is a challenge thatboards and managements have to addresson a continuing basis, and this is best doneby open and transparent adoption of laiddown policies.

8. Depending upon job requirements, nationalsecurity or personal protection, certainrestrictions may be warranted and these wouldnot be deemed in breach of equal opportunityplatform. Some of the legislative mandates suchas prohibition of employment of women infactory night shifts, under-aged children inhazardous occupations, and so on fall under thiscategory. Even here, these artificial restraintsmay be relaxed if extenuating circumstances existor protective measures are in place: for example,employment of women on night duty in someIT related industries like call centres may bepermitted if only to neutralize client-countrytime-zone differences and with stringentsecurity requirements to protect employees bothduring and in transit to and from work. Similarlynational security might demand employment ofonly nationals in certain strategic jobs andindustries.

9. Boards around the world – India being noexception – have not acquitted themselvescreditably on this front even in respect of theirown membership! Women on boards constitute avery small single digit percentage of all availableboard positions in virtually every country; eventhose limited numbers are comprised largelyexecutive career women rather than non-alignedindependent members on boards.

N.Balasubramanian


Announcing (as manyorganisations do) a policy on equalopportunity employment by itselfmay be dysfunctional unlessmatched with measures ensuringsuch equal opportunities are in factprovided at the ground level.

The second element relates to thedevelopmental environment within theorganisation to bridge the capabilitygaps among otherwise suitable candi-dates. Internally, this is addressed bymeaningful human resource develop-ment initiatives including, but not limitedto, training inputs to acquire higher lev-els of skill-set competencies, job rota-tions and geographical relocations tobuild and enhance wider cross culturalappreciation and exposures especiallyfor more senior positions, and inter-dis-ciplinary inputs to enhance holistic ap-preciation of business situations for bet-ter decision making.10

Every effort should be made tomake all employees inherently feelas belonging to a social group ofindividuals without any of the divi-sive distinctions.

In terms of such skill-building in theexternal environment, leadershiporganisations have followed several inno-vative measures. Many leadership ITcompanies in India have set up their owneducational facilities to impart job-relatedtraining and skills to candidates joining theprospective employee pool of the indus-try with options and first-refusals built inwhen adequately qualified. This is an in-stance where industry is helping in capac-ity building in society even while strength-ening its own inflow of required compe-tencies which otherwise would have to beoffered by external educational institu-tions. A different initiative aimed atstrengthening prospective employee poolsis one where enlightened companies en-courage – even mandate – time alloca-tions by their employees towards teach-ing at external educational institutions andprofessional seminars. This has two ad-vantages for the company: first it helps itsmanagers to be updated in their field forteaching purposes, and second, it supple-ments the ever-in-short supply teachingfaculty pool engaged in capacity-buildingin society. Much of this volunteeringshould be internalised in such organisationsas part of the job – not as philanthropy inkind – and included in the employee per-formance evaluation criteria.

The next sub-theme has to do with theworking conditions and culture inorganisations that would promote inclusivity.Every effort should be made to make allemployees inherently feel as belonging toa social group of individuals without any ofthe divisive distinctions. Most leadershipcompanies seek to develop their own cor-porate identity unifying their employees

10.This is particularly relevant in case of functionalspecialists being prepared for general managementpositions; an ability to de-specialise from one’sspecialization so as to be able to appreciate multi-disciplinary dimensions of business problems andinter-disciplinary conflict resolutions is animportant skill, the lack of which can militateagainst achieving meaningful inclusivity in highermanagement selections.



wherever they may be. Work place harass-ment – sexual, ethnic or otherwise – needsto be put down with strong punitive actionin case of breach. If this is not donepromptly and rigorously, affected employ-ees would prefer to be excluded from theoffending group, an action clearly militat-ing against inclusivity objectives.

If the organisation has a whistle-blower policy, the company must ensurethat genuine non-frivolous whistle-blow-ers are not victimised or discriminatedagainst. Although it is the stated objec-tive, even supported in many jurisdictionsby legal provisions, it is not easy to to-tally eliminate the scourge of reprisals inone form or another.11

Finally an important, even if difficult,element of inclusivity implementation isthe task of ensuring their observance inoutsourced entities and the firm’s sup-plier-vendor network as well. Given thatsuch contracting out various activities hasbecome a way of life in modern-day busi-ness operations corporations have anobligation to see their inclusivity practicesare observed in the contract units as rig-

orously as they are within the company.The relevance of extending this obliga-tion has been recognised for a long time,but its application and enforcement havebeen gaining ground rather haltingly. TheSarbanes-Oxley legislation in the UnitedStates extending corporations’ responsi-bility on certain matters to outsourcedunits beyond its political borders is just areinforcing manifestation of the moral andlegal compulsions that had always beenpresent but glossed over. The inconsis-tency of approach can be vividly illus-trated in case of child labour – more of-ten than not, companies that profess theiropposition to such labour in theirorganisations would scarcely be agitatedif such labour were (as often the case)to be engaged by their contracting units.A further extension of this principle is toprefer wherever possible suppliers andvendors whose employment practices arein accord with those of the buying firms.Although not easy to implement – espe-cially in case of suppliers of proprietaryproducts and services – such purchasepreferences, the ends of justice with re-gard to adopting inclusivity discipline inthe country are unlikely to be met untilall the units in the value chain fall in lineon their own or by persuasive pressuresfrom linked-up constituents.

Inclusivity & the Environment

Discussions on inclusivity are usuallyassociated with people; its extension toenvironment may therefore need to be jus-tified. Peoples’ lives are impacted uponby the economic, social and physical en-vironments in which they live; theirwellness, which is the objective of all

11.History is replete with such instances ofvictimization even if not so called. To cite justtwo examples: Sherron Watkins, the whistleblower who brought the Enron fraud to theattention of the world had to leave the companylong before its demise. In case of the 2008 financialmeltdown, Lehman Brothers who were amongthe major casualties to file for bankruptcy, firedMathew Lee, their senior vice president – finance,who blew the whistle blower to expose theirinappropriate treatment of repo transactions,much before the case hit the headlines. Protectivelaws seem to be ineffective in curbing this trend,even in developed markets such as the US.

N.Balasubramanian


inclusivity efforts, will never be achievedto the desired levels if any of these pa-rameters are not optimally maintained.While the economic and social environ-ments are sought to be extended to allpeople without any unjustified exclusions,ignoring the third component, environment,will vitiate any of the successes on theother two dimensions. One could wellimagine how dysfunctional even a societywith economic and social inclusivity canbe without simultaneously pleasant physi-cal environment in which to enjoy the fruitsof such inclusivity in other dimensions.Such a society without universal accessto pure air, clean water, safe power, goodcommunications and so on can hardlyboast of high levels of wellbeing. It is inthis context that concern for the physicalenvironment becomes an integral part ofany inclusive growth initiatives.

Concern for the physical environ-ment becomes an integral part ofany inclusive growth initiatives.

Business corporations could contrib-ute significantly to this important com-ponent of inclusivity. In manufacturingindustries especially, they should ensurethat they not only comply with but im-prove upon emission and pollution con-trol regulations. It is not an acceptablerationalisation that the gutters and canalswhere pollutants are discharged areworse in quality than the treated factoryeffluents and hence any shortcomings onthe part of the corporations are not ma-terial. Leaders should lead by example,not hide behind defensive or irrationalexcuses. Global warming and climate

change are issues threatening the levelsof comfortable living for the populationsof the world and offer leadership com-panies great opportunities to minimisetheir roles in further aggravating an al-ready delicate balance.

In a land of consistent energy short-falls, ensuring effective energy manage-ment is a key corporate response. Thisapplies not only to the energy usage orwastage within the company in its ownoperations but also to the energy-effi-ciency of its products and services. Whiledesigning products and services, compa-nies may like to invest in technologies thatfacilitate recycling, and optimally utilisingthe resources consumed in providing theproduct or service.

Similar considerations apply to otheressentials like air and water. The objec-tive with regard to such scarce naturalresources should be to aim for a mea-sure of neutrality in consumption. Extrac-tive industries need to find environmen-tally acceptable methods of disposal ofmining residues and tailings. Experienceof companies like the Big Australian,BHP Billiton (Thompson & Macklin2009: 191-202) especially in the Ok Tediriver basin in Papua New Guinea shouldoffer valuable lessons to company boardson how not to address such issues if theywere to care for inclusive developmentof the peoples of the host locations andeven more specifically if they have toensure sustainability of their company’sbusiness operations at home.

Companies can also significantly con-tribute in the field of road transportation



and discipline in their cities. Many com-panies, including some which are reputedto have excellent governance andinclusivity practices, engage contractvehicles to transport their employees toand from their work places. Given thestringent requirements as to punctualityand so on, many such companies threatenthe transport contractors with monetarypenalties in case of delays. This leads toreckless driving on the already congestedand damaged roads and violation of alltraffic rules, all just to comply with thetiming schedule requirements. Companiesshould of course insist on punctuality asmuch as on performance, but shouldmake it clear to the contractors that itdoes not mean a licence to traffic chaosand endangering of lives of employees intheir vehicles and other on the roads.

Inclusivity & the ParticipatingCommunities

The third dimension relates to thepositive role that corporations can playthrough engagement with the citizens inthe communities of company’s presenceand operations. When it sets up a busi-ness or manufacturing base in a location,the company establishes an umbilical re-lationship with the host city and this en-tails an obligation, far above and beyondjust legal or compliance issues. It as-sumes in many ways a responsibility tocontribute to the wellbeing of that com-munity and its people. This contributioncould manifest itself through employmentopportunities to eligible people with req-uisite competencies as well as openingup secondary and tertiary economic ac-tivity, efficient supply of its goods and

services, improved infrastructure andcivic amenities made possible from theadditional taxes that the firm and its em-ployees contribute, better connectivity toand communication with other locationsopened up through the activities of thecorporation, and so on. People who wereotherwise under-employed and even un-employed before the advent of the firmwould thus be brought into –and includedin – the mainstream of growth andwellbeing.

While in the corporate contextmostly headquarters and factory locationsare understood as relevant communities,it is as well to note that similar linkagesand responsibilities albeit on a relativelysmaller scale would be involved in everylocation, market and country that a com-pany is present in. As applicable to hostcountries in case of transnational corpo-rations, even domestically similar consid-erations of “acting local” would arise andneed to be respected.

In a community context, corporationshave several alternatives to consider onenhancing inclusivity of the population inpartaking of the economic and materialbenefits arising from the firm’s locationamidst them. It is not unusual especiallyin locations away from the main metrosfor the towns or villages to be lacking inhygiene, schooling, medical and othersuch basic needs of wellbeing. Leader-ship corporations help setting up new, andupgrading existing facilities. Often thereis a business case for taking theseinclusivity initiatives. With such basicamenities in place, local workforce couldfocus on the jobs on hand rather than

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being distracted by such matters. Suchinvolvement enhances corporate reputa-tion locally and can certainly contributeto better recruitment and retention ofemployees who may find a sense of loy-alty to the firm that has provided the ba-sic amenities. Better attendance, im-proved performance, and enhancedlearning on the job may all contribute tohigher productivity and earnings leadingto additional disposable incomes. All thiswould of course contribute to more andmore people getting included in the pros-perity and wellbeing bandwagon.

Corporations can also contribute tothe competencies building efforts by as-sisting financially and through volunteer-ing by senior employees and managersas noted earlier. Large global corpora-tions have gone that extra mile to set upinstitutions of higher learning – Motorolais an oft-cited example – that would helpin better capacity building and conse-quently opening up for more and morepeople equal opportunities to find satis-fying and well-paying jobs and businessoptions which would otherwise have beenbeyond their reach.

Inclusivity & the AbsenteeShareholders

The concluding dimension under dis-cussion here relates to another unlikelypopulation group comprising absenteeshareholders who have no say in day today operation of the corporations theyown shares in. Inclusivity discussionsgenerally tend to focus on the problemsof the relatively poor and forgotten sec-tions of the populations at large. There

are compelling reasons to apply some ofthe arguments and possible solutions tothese groups of shareholders (many ofthem retired citizens dependent upon in-flows from their holdings in any case)who are often excluded from fair andequitable participation in the prosperityof their respective companies. Such aconsideration is also justified on the ba-sis of parallels in the political concept ofinclusivity: when addressing inequalitiesamong peoples, it is not always possibleto take a whole country together at thesame time. Some regions and states aremore advanced than the others and of-ten it is the less advantaged groups thatare sought to be brought into theinclusivity net of partaking of the ben-efits they have been denied for reasonsthat have already been discussed. Withinregions and states, it is not unusual tofocus on the less advantaged sections ofthe population to bring them in to themainstream of economic activity andprosperity. Similarly, within the corporatesector which constitutes a significant partof the economic activity in the countrybesides employing virtually a vast pro-portion of the organised labour, it shouldbe possible to isolate the less advantagedshareholders, namely those not in opera-tional control and restore to them whatis their legitimate due.

Corporate Ownership & Democracy

A major feature that distinguishesthe US and UK from the rest of theworld (India included) in terms of own-ership of business corporations is thestructure of such ownership. UnitedStates and United Kingdom are the two



countries where corporate ownership islargely diversified with individual per-centages in the lower single digits. Inall other countries, ownership is concen-trated in the hands of a controlling indi-vidual or group sufficiently large enoughfor them to ward off in general any threatof takeover by the dispersed sharehold-ers. The latter are not necessarily a mi-nority – often collectively they are stron-ger than the controlling holdings but theperennial problem of democracy applieshere as well in that they all cannot gettogether, for reasons of uneconomicholdings, geographical distances, politi-cal and other such pressures, to contestand vote out the controlling sharehold-ers. In India, as in many other emergingeconomies, there are at least three suchdominant groups controlling a vast ma-jority of corporations: family or domes-tic groups, multinational groups, and thestate-owned group.

Voting power is perceived as the keydriver in democracies for determining thewill of the majority which prevails overthe minority. Sen (2009:352) argues “Abroader understanding of democracy aspublic reasoning … can accommodatethe importance of minority rights with-out ignoring majority votes as part of thetotal structure of democracy.” He alsoquotes the Marquis de Condorcet, theeighteenth-century pioneer of socialchoice theory, warning against “themaxim ….. that the few can legitimatelybe sacrificed to the many.” It is ironicalthat in corporate democracy it is not onlythe few against the many but actually themany against the few, since absenteeshareholders are often the ineffective

majority in most minority-controlled cor-porations.

In corporate democracy it is notonly the few against the many butactually the many against the few,since absentee shareholders areoften the ineffective majority inmost minority-controlled corpora-tions.

The result of such groups controllingcorporations is that it is in their exclusivepower and authority to sequester forthemselves a more than legitimate shareof the companies’ wealth and wealth cre-ating corporate opportunities at the ex-pense of other absentee shareholders whodo not enjoy such private benefits of con-trol. It is this exclusion that needs to beaddressed through the inclusivity prin-ciples that apply to civic societies andcommunities. A number of measures al-ready exist in law and regulation thathowever appear to be circumvented quiteeasily as has been seen in several in-stances of corporate demeanours andfrauds. The principal instrument is thevoting power at general meetings ofmembers where the controlling share-holders’ votes are readily available whilethe dispersed shareholders’ votes are noteasy to come by because of poor atten-dance and participation. Severalcountervailing measures have been sug-gested especially in case of corporatedecisions involving related party trans-actions (Bala 2009: 554-75, Bala &Satwalekar 2010: 13-18); some of thesehave been accepted by the market regu-lator, Securities and Exchange Board of

N.Balasubramanian


India, which has commended them to thegovernment for legislation.12

Internalising Inclusivity as a Process

While the foregoing discussion em-braced a broad range of inclusivity ideasas applicable to business corporations, itscentral theme has of course been to high-light the imperatives of incorporatinginclusivity thinking in operational decisionmaking processes. Inclusivity (as muchas its inseparable concomitant, ethics) hasto be imbibed as part of the DNA of theorganisation where these serve as thesystems software (to borrow a phrase-ology from the information technologyspace) to run all its decision applicationsacross the organisation. The concept hasto be embedded in the operational logis-tics and strategies. Flowing down fromthe board at the top, successful sustain-able corporations would seek out howsuch initiatives could be launched not asa drag on profitability but more as stra-tegic opportunities for wealth creation.Isolating them as standalone chores tobe gone through as part of a check-boxticking compliance exercise outside oforganisational decision dynamics wouldtrigger an accelerating slide down the

slippery slope of lost opportunities andlikely eventual demise of the organisationitself.

Flowing down from the board atthe top, successful sustainable cor-porations would seek out how suchinitiatives could be launched not asa drag on profitability but more asstrategic opportunities for wealthcreation.

5. Inclusive Governance as aBusiness Proposition

Despite the clear writings on the wall,many corporations would probably still beundecided about internalising inclusivityas business strategy. Successful and sus-tainable corporations cannot be built onthe basis of islands of prosperity in a sur-rounding ocean of discontent and depri-vation. Businesses have to realign them-selves with the changing needs of thesociety that they have to care for evenwhile earning economic profits for theirshareholders. Visionary corporate lead-ers are the first to identify societal needsand proactively channel their corpora-tions’ financial, managerial and techno-logical resources to satisfying suchneeds. Larger the proportion of popula-tion gaining from such initiatives and par-ticipating in the mainstream prosperitygenerated in the country, greater will bethe satisfaction and recognition of a jobwell done. This reflects in the reputationof the company as a good corporate citi-zen not only in their home country butalso in other locations hosting their op-erations, leading to increased valuations

12.The principal measure of debarring controllingshareholders from voting at general meetings onresolutions where they stand to benefit to theexclusion of other absentee shareholders had beenamong the major recommendations made in a 2000Report of Corporate Excellence by a Committee(of which the author was the drafting member)appointed by the then Department of CompanyAffairs and presented to the then Minister incharge, Arun Jaitley; obviously therecommendation was far too much ahead of itstime and remained to be legislated.



and returns flowing to the shareholderswhose interests the company and its di-rectors are required to look after. Illus-tratively, GE’s chairman, Jeff Immelt(2007: 7) had this to say with regard toits approach to stakeholder engage-ment:13 “As we expand in developed andemerging markets, we will be continuallychallenged to ensure that we invest in asustainable and intelligent way that le-verages our financial, technical and in-tellectual resources to the benefit of ourinvestors, employees and communities.To some, this may seem incongruous fora public company like GE whose primarymission is to make money and delivervalue to investors. We don’t agree. …Ourearly experience with ecomagination hasshown us that we can develop productsto address these [environmental andother] challenges and make money indoing so. Our corporate citizenship mustbe aligned with our business goals in or-der to drive future growth and better un-derstand and mitigate these [environmen-tal] risks. This alignment also helps usdeliver on our promises while answeringthe needs of society.”

Underlying such statements is thehard fact that most of these initiativescreate larger number of productive jobsand enhanced competencies that lead tothe inclusion of more and more peoplereaping the benefits of growth; the routeto delivering value to shareholders isthrough numerous such initiatives – sav-ing energy, minimizing environmental pol-lution, making available better products

and services that satisfy customer needsand enhance their feeling of wellbeing,improved adherence with human rightsand dignity expectations, minimizing oreven eliminating biases and discrimina-tions against people based on gender,race, creed, colour and so on – whichcarry more and more people into themainstream of economic activity andsharing in its fruits.

In conclusion, it may be appropriateto remind ourselves that inclusivity is amatter of utmost concern to all, affluentcitizens and business corporations in-cluded, and not to just those who are de-prived and the politicians and civil soci-ety outfits that espouse their cause; inthe satisfactory resolution of the prob-lems of exclusion lies the prospects ofpeace, prosperity and the pleasures ofbeing part of a cohesive and complemen-tary society. A White Paper (UKWP2008) to the British parliament in the con-text of a proposed legal reform relatingto addressing inequalities and humanrights violations in the United Kingdom,insightfully noted: “The government be-lieves that fairness for all is the basis fora healthy democracy, economic prosper-ity and the effective delivery of our pub-lic services. Equality and human rightstherefore matter to all of us, not just thosewho experience discrimination and un-fair treatment.” If business corporationscould heed these words of wisdom, adoptthe problems of the excluded and under-privileged as their own, and with theirsuperior intellectual resources find satis-factory solutions (some of which are dis-cussed in this paper), they would havehelped not only the excluded but also

13.Investing in a Sustainable Future: GE 2007Citizenship Report, (2007), June:7

N.Balasubramanian


themselves. Failure to do so may likelylead them to a situation similar to the oneMartin Niemoller was faced with in NaziGermany,14 with no one to be concernedabout him!

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Documents

Corporate Ethics \u0026 Governance in an Inclusive Growth Framework