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What do you understand by ‘moral integrity’ and ‘professional efficiency in the context of corporate governance in India ? Illustrate with suitable examples.

Moral Integrity and Professional Efficiency in Corporate Governance in India:

1. Moral Integrity: Moral integrity refers to the adherence to ethical principles and values, and making decisions based on what’s right and just rather than personal gain. In the corporate world, this means being transparent, honest, and accountable to stakeholders.

Example: Infosys, one of India’s largest IT firms, is renowned for its ethical business practices. The founders, such as N. R. Narayana Murthy, have emphasized the importance of moral integrity as the backbone of the company. This has led to a strong reputation for Infosys in terms of transparency and ethical business practices.

2. Professional Efficiency: Professional efficiency pertains to the competency, skills, and effectiveness with which corporate objectives are achieved. It emphasizes results, innovation, and optimal utilization of resources.

Example: Tata Consultancy Services (TCS) is known for its professional efficiency. Their efficient project management, timely delivery, and innovative solutions have made them a global IT leader. Their consistent performance metrics and service delivery are testament to their focus on professional efficiency.

In the Context of Corporate Governance: Corporate governance in India emphasizes both moral integrity and professional efficiency. While laws and regulations like the Companies Act 2013 and SEBI guidelines focus on transparency, accountability, and fairness (ensuring moral integrity), they also stress the importance of efficiency, effectiveness, and timely disclosures (indicating professional efficiency).

For a company to be successful and gain stakeholder trust in the long term, a balance between moral integrity and professional efficiency is indispensable. For instance, while a company might be achieving great financial results (professional efficiency), if it’s involved in environmental malpractices or unethical behavior (lacking moral integrity), it could face backlash from stakeholders and society, affecting its long-term sustainability and reputation.

February 2024