Today’s world, described as the ‘age of anxiety’, is torn by massive negatives: widespread corruption, frauds, scams, scandals, money laundering, selfishness, greed, mistrust, conflicts, violence, crimes, social unrest, pandemic, diseases, wars, terrorism, hunger, inhumanity, migration, human trafficking, human suffering, economic and social inequality, gender discrimination, pollution and poisoning, destruction of the forests and natural resources, global warming and consequent natural disasters all over the planet. Man has been the greatest destroyer of nature and the environment. Human existence, peace, and the survival of the world itself are at stake.

Why should it happen in this beautiful world? A deeper analysis will reveal that the root cause of all this has been the total breakdown of moral values and ethics. Today, nobody trusts anybody. Business does not trust the government, the government does not trust business, society does not trust either of them, citizens do not trust the police and the administration, the bureaucracy does not trust the politicians, politicians do not tolerate other politicians, students cannot trust their teachers, husbands do not trust their wives, wives cannot trust their husbands, children do not trust their parents, and social and religious communities do not trust others. Even animals cannot trust the humans.

There has been a tremendous erosion of moral and religious values resulting in unprecedented deficit in trust and ethics. It appears people have lost their faith in their own people and their own gods. Who is responsible for this? It would be futile to single out a single cause or a single agent for this state of affairs. Among the major factors, rapid industrialisation, rapid increase in economic activities, path-breaking innovations like the internet and smart phones, unthinkable technological developments in all spheres including space and weapons of mass destruction and above all, globalization have speeded up the process. But the basic cause is insatiable human greed.

As Mahatma Gandhi had said, there is enough in the world to meet our needs but not enough for human greed. Here comes the role of business and the corporates. Business is of supreme importance because it is the lifeline of the nation. Society cannot grow without business; business creates wealth for individuals and the country; it is business which produces billionaires and not by other means; modern business especially the MNCs controls the lives of all citizens more than the government. Right from the morning toothpaste to the sleeping pill at night, our lives depend on the products dished out by the corporate world.

Business has enormous potential to contribute to the growth, development, employment and welfare of the society. While business can and does tremendous good to society, it is also capable of causing harm and does tremendous harm to society. Business indulges in large scale exploitation of the system, the employees and the consumers; bribery, corruption, profiteering and unethical practices are rampant.

Since business occupies the centre-stage of society, its corruptive power is endemic. Needless to say, the corporate is the fountainhead of corruption. They also use the political-policecriminal nexus to achieve their objectives, buying politicians and government officials. The best example of unethical practices of the corporate world was the 2007-2008 meltdown leading to the world’s worst economic crisis ~ the greatest depression in history. Starting with NYSE, the stock exchanges tumbled all over the world ~ London, Paris, Berlin, Rome, Tokyo, Shanghai, Hong Kong, Sydney, Toronto et al. An estimated $10 trillion was lost in market capitalisation.

Hundreds of companies including dozens of MNCs and transnationals went bankrupt. Millions lost their jobs and hundreds lost their lives. GDP growth rates declined sharply in all developed and developing nations leading to an era of deep recession. Financial engineering, exotic financial instruments, reckless risk-taking and unethical operations indulged in by a few big players like Lehman Brothers, AIG and the CITI Group led to this catastrophe. In the new millennium itself there have been 40 major corporate scandals and collapses as of 2022.

In order to curb and control business power ~ economic, political, social, cultural, legal and their hold on natural and human resources ~ governments have framed laws and established regulatory authorities (like SEBI) for good corporate governance and CSR. Academicians and corporate gurus have developed various theories, models and practices of business ethics and corporate social responsibility. Business ethics has become a major subject of study in all the business schools in the world and the universities especially in the USA.

But business ethics developed over years based on the recommendations of a plethora of high powered Committees and Commissions like the Cadbury Report and the OECD Principles and those taught in the business schools have had little or no effect on the business operations of the corporates. So long as the maxim of “maximization of profits” remains the primary mantra of corporates, everything else in the world including ethics will be of secondary concern. The phenomenon of large-scale exploitation of labour and unethical practices resorted to by the MNCs who outsource their business to poorer countries like Bangladesh, Thailand, Vietnam, Indonesia etc. has been well documented.

The list of unethical issues and practices noticed during the functioning of the corporates is quite long. Some of the unethical activities generally indulged in by the corporates including the biggest and “best” MNCs and transnationals of the world are mentioned in the following areas:

1. Ethics of Accounting and Financial Information: Creative accounting, financial engineering, earnings management, misleading financial analysis, tax evasion, insider trading, securities fraud, forex scams, bribery, kickbacks, facilitation payments, money laundering, excessive executive compensation, shoddy auditing and collusion with public auditors and financial advisors.

2. Ethics of Human Resource Development (HRD): discrimination ~ age, gender, race, religion, disabilities, nationalities, weight and attractiveness, at-will employment, surveillance, union-busting, strike-breaking, slavery, child labour, occupational safety and health, sexual harassment and whistle blowing.

3. Ethics of Sales and Marketing: Price fixing, price discrimination, price skimming, excessive profiteering, anti-competitive practices, anti-trust laws, attack adds, subliminal messages, sex in advertising, deceptions in ads, green washing, viral marketing, black markets, grey markets and adulteration and unlawful ingredients in milk products animal products, processed foods, GM foods and medicines.

4. Ethics of Production: Addictive, defective, inherently dangerous products (alcohol, tobacco, drugs, chemicals, insecticides, dynamites and arms and ammunitions), environmental pollution (air, water and soil), GM foods, animal rights, slaughtering process of animals, radiation and poisoning and industrial accidents and safety measures.

5. Ethics of Intellectual Property: Patent infringement, copyright infringement, trademark infringement, employee-poaching, bio-prospecting, bio-piracy, hijacking of traditional intellectual properties like Ayurvedic medicines and herbal products, Yoga and intangible ancient knowledge.

6. Ethics of International Trade: Unfair trade, dumping, outsourcing to the cheapest destinations, globalization, economic and cultural imperialism, child labour, etc.

7. General Corporate Philosophy: Stockholder vs. stake holder concept, corporate governance and corporate social responsibility, hostile take-over, industrial espionage, political contributions, and corporate manslaughter.    

(The writer is former Dy Comptroller And auditor general of India and a former Ombudsman of Reserve bank of India. He is also a writer of several books and can be researched at brahmas@gmail.com)