Beyond the scripted code of conduct

True leaders do not follow scripts written for them; scripts are written after them

The resignation of Binny Bansal of Flipkart is the latest in a series of departures of heavyweight CEOs in recent months. While the background of each of these resignations is different, there is a common pattern with deeper implications linking them all. This is about “defining what is right and what is not”! It is a matter of concern that leaders who are supposed to be the trustees themselves are succumbing to temptations and making the line of separation between “right” and “not right” pale.

“Words are empty vessels into which we pour meaning” is an old saying. But there is a limit to filling words with all the true intentions behind the use of any word. This is true with any written code of conduct. It is rather silly to hide behind a legalistic meaning of a prescribed set of ethical behaviour while the conduct does not uphold the spirit behind such a prescription.

In the ICICI incident the bank maintained that the chairperson was not required by its code of conduct to disclose the dealings of her spouse. In the Flipkart incident, Bansal has admitted to “judgmental error” in the absence of a specific and explicit code of conduct in spite of having opportunities to disclose the conduct. This raises a fundamental question: Can any such prescriptions convey completely the spirit behind it? Is there not an assumption, realistically, that all such documents have limitations?

Indeed, what is unwritten is more important than what is written. One is expected to explore behind the formulation of any statement of values and code of conduct to understand the true essence that is emanating from the corporate purpose and culture. The Jain teaching of being true in “thoughts, words and deeds” is quite appropriate in the practice of ethical conduct. It is through a number of instances and narrations of experiences that the true meaning is conveyed. Employees who get groomed by listening to such organisational stories and by watching current leaders walking similar stories imbibe the spirit behind them and draw their own boundaries of conduct. Small aberrations are nipped in the bud and not allowed to grow. Then there is no policeman required to man the traffic signal.

Are leaders only to make money?

We often underestimate the profound imprints of founders and strong leaders on the core values of the organisations, not only while they are at the helms, but also when they are gone. The growing tendency to measure and reward performance of leaders largely based on commercial achievements seems to ignore the custodianship responsibilities of a CEO to nurture organisational values. What happens when the same person is tempted to interpret the ethical expectations favourably, to suit personal convenience? Or for that matter, would someone take the liberty of transgressing in the personal sphere under the convenient garb of dissociating personal life from professional life? The oversight responsibility for self falls squarely on the leader, particularly in the absence of an independent and active board. There is no room for “error of judgement” there, especially when matters pertain to adherence of values. It is for the leader to recognise that erosion of values even by an iota has long-term implications of drift and digression, impacting the core of the foundations of any institution. This is precisely the reason why Walmart, with over half a century of history behind it and a vision to be a “most admired company”, ensures their staff (called “associates”) conduct themselves in an exemplary manner, as lived and enshrined by the founder. There cannot be any ambiguity of conduct particularly at the top.

In a world where corporate heroes and successful entrepreneurs are idolised, CEOs and entrepreneurs have a social responsibility to go beyond the obvious and set the highest standards of conduct both in professional and personal spheres. True leaders do not follow written scripts for them; scripts are written after them. 

Ramachandran is professor and executive director, Thomas Schmidheiny Centre for Family Enterprise, Indian School of Business; Ray is professor, Indian Institute of Management, Calcutta