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Corporate Governance and Ethics – Is it only for the HRs of theorganization?

Wednesday, July 8, 2009

The common perception among people is this subject is only for HR’s.  The irony is that most MBA’s like us also feel the same. I fail to understand why. Are only HR’s supposed to know about the ethics of the organization.  Heard a lot of people say “my specialization (left to the readers’ discretion to guess.) and ethics don’t go hand in hand and I really don’t need to study this.” 

Now coming to the question of why do we even need a course on governance and ethics ?  Every other day we hear about the Stamfords, the Madoffs, the Enrons and the Satyams of the world that there is an air of mistrust all around in the world.  Had there been a little amount of due diligence on the part of the stake holders of an organization, we wouldn’t have landed up in a soup like what we are in now. That’s where I realize the governance and ethics come in.

 Over to the main issue, is it only for the HR’s? I have a few questions to pose. Why is a CEO held responsible for fraud when unethical practices are reported in an organization if it is only for HR’s ?Who handles the whole organizational governance? The CEO or the HR manager?  Agreed HR managers are equally responsible in building the work culture but it is often built from top to bottom as the values at top percolate in to the bottom levels.  It’s essentially the top leadership which drives the governance and ethics in the organization. As I see it is totally up to individuals to discover the importance of ethics in their lives but people must realize that if they aspire to be top leaders, be it a CEO, CFO or a HR in an organization, they cannot afford to compromise on ethics


Lokesh Mudgal July 8, 2009 at 4:06 AM  

I could not understand why you put the CEOs CIOs of CFOs and HR in different brackets. As far as i understand, be it anyone the ppl at the Top or the Bottom, HR must work to create the synergy between all. and when you say, "CEO is held responsible" somewhere in ur blog, its simply because he is the one who represents the Firm.
i dont argue with ur views, but anyone in the organization is the customer for HR, and this includes anyone. so ethics, values and culture are advocated by HR and as a part of human handling, its their part to do it. a CEO or CFO or the likes can not be excluded from such advocacy. A bit hard for me to buy.

Divya July 9, 2009 at 6:03 AM  

hi Lokesh ,
all I was trying to say is that it is not just for the HR and every one needs to have an idea about governance and ethics. I hope that clarifies :-)


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