Cumulatively ravaging effects of inequality

The drumbeats of corporate inequality are being heard in many ways - from compensation differentials and working hours to work-from-home and gender pay parity

Everywhere in the world malaises are common: Worker insecurity, crony capitalism, political bribery, racism, and, more broadly, inequality. I was born when India was ruled by Lord Wavell. Our generation was inspired by leaders who served jail sentences to win independence, though, after independence, most of us sought a different life for ourselves and our country. Similarly, the children of liberalisation admire those who worked incredibly long hours with meagre resources. Like our generation did, they too seek a life different from their seniors.

They desire rapidly improving opportunities for jobs, infrastructure, education, and health. They also seek integrity and exemplary leadership in public life, both of which are well below their expectations. The jobless youth are forced to migrate. Crumbling urban infrastructure creates slums. City commutes are long and hazardous. The multiple dimensions of inequality are morale-sapping and potentially implosive, causing deep fissures in society. In the short term, policymakers may inadvertently miss the tectonic effects of inequality. Indian American author and economist Ravi Batra, a cohort of my generation, had argued four decades ago in The Great Depression of 1990 that free-flowing capitalism creates excessive inequality and breeds political corruption

Inequality has many manifestations: Economic, gender, religion, class, caste, and culture. The ill effects may be episodic, as with economic matters, or long-lasting, for example, as with caste. Each manifestation of inequality derails progress; collectively they can devastate societies. Perhaps the world, and surely India, is suffering the “convergent slings of multiple ravaging”. When I string together recent events and episodes, buttressed by writings of commentators, I see a pattern.

First — a reference to gender inequality. The woman Prime Minister of Iceland joined a public strike to draw the nation’s attention to the widespread gender-based pay gap and sexual violence — Iceland, whose image in the world is of gender equality! Centuries earlier, Draupadi’s invective on her vastraharan (disrobing) was focused on what constituted equality, character, and fairness, possibly the first recorded public admonition on gender bias and lack of honour. The Seneca Falls Convention of 1848 in the US highlighted those women who demanded equality. The Women’s Social and Political Union (WSPU) of the 1900s, also known as the Suffragette Movement, shook Georgian England at its roots. As an aside, an early newspaper picture of the demonstrating women had one brown face tucked amid the several white ones. She was Sophia Duleep Singh (1876-1948), granddaughter of Maharaja Ranjeet Singh, the Lion of Punjab. Sophia’s is an interesting story, but that narrative would distract readers from the thrust of this article.

Second — inequalities due to caste. Social reform movements had iconic leaders like Jyotiba Phule in Maharashtra, Sri Narayana Guru in Kerala, Madhusudan Das in Odisha, and EVR Periyar in Tamil Nadu. B R Ambedkar argued that caste must be “annihilated” for true benefits of political and economic reform to accrue to the mass of the people. His use of the word “annihilated” prompted Mahatma Gandhi to describe him as “a challenge to Hinduism”. In modern times, DMK leader Udhayanidhi Stalin said something similar, though his comment misfired.

Third —inequalities in the cultural world. Take, for example, the strike by Hollywood technicians, writers, and actors. Threatened by technology and aggrieved by a widening disparity in earnings, the strikers feel insecure about their self-worth and future. The “winner-takes-all” stars aggravate the overwhelming sense of unfairness. In early 2023, the Walt Disney Company Board received a rebuke from Abigail Disney, granddaughter of the founder, about the unfairness of not adequately rewarding “the real people who make the Disney magic happen”, the theme park workers.

Last — inequalities in the corporate world. My generation was raised on leadership models who were brawny, tough-talking, macho chief executive officers like Sewell Avery, Harold Geneen, and Lee Iacocca. Nowadays, well-researched articles communicate the need for empathy and understanding. (“CEOs don’t need to be monsters”, The New York Times, September 27, 2023; “Inside Starbucks’ Dirty War against Organized Labour”, NYT, July 23, 2023; and “Exhausted Amazon staff fight back against retail giant”, The Guardian, October 22, 2023). Australian airline Qantas sacked 1,700 workers — illegally, according to reports. When the board subsequently placed a proposal for “fair” executive pay, shareholders voted against the proposal. Clearly something is amiss and getting worse. We require sensitivity and compassion to appreciate the nuances of what is happening. For corporate leaders, it is important not only what you say but how you say it. If you cannot decrease inequality, try not to increase it! If a corporate honcho is awarded 2,500 times the median pay of workers, he or she is inviting adverse attention. During my service years, the ratio in India was not so acute; it appears to be a new trend.

Are the nomination and remuneration committees (and boards as a whole) monitoring this fact carefully and closely enough? Boards of sustainable, humane, and enlightened (SHE) companies should take stock of such leadership vectors. As stated in my recent book Inside the Boardroom, directors should respond to the prodromal or advance signals with wisdom. Societal or corporate action must be born out of a nuanced view of the future rather than be inspired by a historical perspective.

The drumbeats of corporate inequality are being heard in many ways — compensation differentials, hours of work, work-from-home, gender pay parity, and so on. Companies must consider how they can mitigate and manage the trend.

The writer is an author and a business commentator. www.themindworks.me. rgopal@themindworks.me