Authored by Shatakshi Dwivedi, Third Year B.A. LL.B. (Hons.) student at Symbiosis Law School, Noida
A New Dawn: Ethics and Governance in the Global Arena
For thousands of years, ethics broadly defined as the principles guiding human beviour and decision making in society, has functioned as an essential base of social operations through its ability to determine proper and improper conduct[1] [2] .In the context of our further discourse, ethics refers specifically to moral principles in business and governance, shaping corporate responsibility and decision making frameworks. Corporate governance operates at the intersection point between ethical business practices and international regulatory compliance during the era of global market and cultural integration. The ancient Indian scriptures Mahabharata, Gita, and Upanishads join forces with ‘Dharma, Satya, and Ahimsa’ to deliver universal concepts that match modern corporate governance principles[3] [4] . Where the Mahabharata emphasized righteousness and moral dilemmas in leaderships, the Bhagavad Gita advocates selfless action (Nishkama Karma) and ethical responsibility. This blog aims to reveal how traditional Indian values intersect with contemporary global governance frameworks through assessment of OECD Principles of Corporate Governance together with United Nations Global Compact Policy. [5] [6] By drawing parallels between historical moral philosophies and contemporary business ethics, this blog highlights the relevance of traditional wisdom in shaping modern corporate responsibility.
Bridging Ancient Wisdom with International Governance Standards
Traditional Indian scriptures provide ethical principles which match closely with the standards established under international corporate governance frameworks. The Bhagavad Gita establishes ‘Dharma’ as duty and righteous action, emphasizing the responsibility of individuals and leaders to act ethically without attachment to personal gain (Nishkama Karma)[7] [8] . ‘Dharma’ functions as the fundamental ethical framework which businesses utilize to guide their responses within complicated stakeholder frameworks[9] [10] . For instance, adhering to fair trade policies, maintaining ethical supply chain and ensuring transparent labour practices reflect this principle in action.Companies that commit first to their employees and customers and environmental care build an atmosphere of honesty and credibility for all stakeholders.[11] [12] Companies that prioritize employee well-being, consumer trust and environmental responsibility such as Unilever’s water conservation program and Infosys’ carbon neutral goals cultivate a business environment rooted in integrity and long-term value creation.
The Vedas and Upanishads emphasize ‘Satya’ (truth) and ‘Ahimsa’ (non-violence) which directly translate into transparent reporting practices and sustainable operations and fair stakeholder communication[13] [14] . Company financial reporting transparency and ethical marketing combined with environmental protection and social community welfare functions as expressions of these principles. The principle of Ahimsa highlights minimal harm which corresponds today with corporate social responsibility (CSR) and environmental, social and governance (ESG) criteria. However, applying these ancient concepts to modern business is not without challenges. The complexities of profit-driven markets, regulatory inconsistencies across countries, and the pressures of short-term financial performance can sometimes conflict with these ethical ideas.
The OECD Principles of Corporate Governance together with SEBI’s Listing Obligations and Disclosure Requirements (LODR) both support these ancient teachings through their emphasis on fairness and transparency and accountability. [15] [16] However, a key distinction exists between Western corporate governance’s legalistic approach and Indian ethical approach. While the western corporate governance, particularly in the U.S.A. and U.K., laws like Sarbanes-Oxley Act follow a rule based, compliance driven system, where companies are legally bound by shareholder-centric regulations and strict financial disclosure norms. On the other hand, Indian businesses often integrate self-regulation, CSR, and stakeholders welfare beyond legal mandates. For instance, Section 135 of Companies Act, 2013 mandates CSR spending, reflecting the emphasis on societal well-being alongside profitability.
The legal mandate for financial statement accuracy represents ‘Satya’ as the value delivering truthful information to stakeholders. The integration of these ethical principles within legal standards establishes sound decision-making processes and builds trust between corporations and their stakeholders.
The OECD Principles of Corporate Governance mirror ancient principles through their emphasis on accountability alongside fairness and transparency and responsibility. These principles help corporations practice ethical business activities while prioritizing stakeholder needs and preventing actions that damage public trust. Through its membership requirements the United Nations Global Compact guides businesses to embrace sustainable and socially responsible policies. The Sustainable Development Goals (SDGs) continue the advocacy for ethical leadership along with sustainable practices through their universal moral code that extends beyond geographical borders.
Through the implementation of these elements, businesses can simultaneously overcome globalization obstacles and maintain proper ethical governance standards. According to OECD fairness standards corporations should adopt ‘Nishkama Karma’ principles that prevent self-interested behaviour by promoting duty-based decision-making[17] . ’Nishkama Karma’ for corporate governance promotes leadership decisions which serve all stakeholders instead of concentrating on quick financial gains alone.
Global Corporate Governance Models and Indian Values
Different models of international corporate governance exhibit substantial diversity though they all work to establish trust-based accountability systems. Under the Anglo-American model shareholders hold the primary position so business decisions must always strive to boost shareholder financial value. This financial return maximization model functions effectively but disregards both social and environmental effects of corporate operations. Through Indian values of ‘Dharma’ and ‘Vasudhaiva Kutumbakam’ (the world is one family) companies can establish a comprehensive view which combines sustainability with stakeholder welfare throughout the long term. [18] [19] For instance, Tata Group exemplifies this philosophy through its business model, which prioritizes long term sustainability and community welfare alongside financial success. Tata Sons, the parent company, is primarily owned by the Tata Trusts, a philanthropic foundation that reinvest dividends into healthcare, education and rural development initiatives. In contrast, many western corporations operate under a profit-first model, where maximising shareholders returns take precedence over moral and social impacts.While western firms increasingly embrace ESG mandates, Indian businesses often integrate ethical considerations as an inherent part of their governance model, rather than as a compliance requirement.
Organizations in Europe and Japan focus their business models on developing relationships with all affected parties and promoting sustainable growth measures. Indian traditional beliefs value maintaining equilibrium throughout every action thus these Western management approaches match Indian cultural values. Through the principle of ‘Ahimsa’ companies can achieve environmentally sustainable practices by avoiding detrimental impacts on natural resources during growth.
Through ethical foundations and social responsibility standards Indian corporate governance practice creates a distinctive philosophy by merging traditional principles with contemporary legal systems. The Companies Act, 2013 establishes rules that require selected companies to conduct CSR activities which institutionalizes the concept of duty-based responsibility which mirrors the Dharma principle[20] [21] . The Companies Act of 2013 through its Section 135 requires mandatory corporate social responsibility contributions which reinforces Indian philosophical principles of community welfare. This mandate reflects Dharma in a structured corporate framework, where businesses are legally obligated to engage in activities that benefit society, such as education programs, environmental sustainability, and rural development.
‘Vasudhaiva Kutumbakam’ principle requires government entities to include everyone in their governance processes. The international initiative of the UN Global Compact promotes human rights alongside labour rights and environmental sustainability and anti-corruption measures with this complementary approach. Businesses can develop a full system which merges profit creation with moral responsibility by implementing these values into their corporate governance framework. These integrated principles build organizational resilience and trust which leads businesses to support a fair and equitable worldwide economic system.
From a legal standpoint, global frameworks like the OECD guidelines and India’s own corporate governance regulations create a structured environment for ethical practices. However, these frameworks’ success depends on their alignment with broader ethical principles, such as those rooted in Indian traditions. For instance, anti-corruption laws and labor rights standards reflect the principles of Satya and Ahimsa, ensuring that corporate actions do not exploit vulnerable communities or harm societal interests.
From Local to Global: Companies Leading by Example
The Tata Group serves as an ethical corporate governance symbol which marries traditional Indian values to worldwide business standards. The company embraces community welfare alongside environmental sustainability and ethical business practices which are embodiments of Dharma and Satya principles. For instance, Tata Steel’s initiatives in sustainable mining and energy efficiency underscore their dedication to corporate responsibility. Through their healthcare and educational and rural development initiatives the Tata Trusts practice ‘Nishkama Karma’ by offering selfless service to uplift society.
Infosys, another global giant, upholds the values of transparency and accountability[22] [23] . Few notable examples include Infosys’s commitment to becoming carbon neutral by 2030, as part of its broader ESG strategy, Infosys’ adoption of the Global Reporting Initiative (GRI) standards that ensures its sustainability. The company’s philosophy of ethical conduct alongside their science-based approach toward business development shares principles found in ‘Ahimsa’ teachings alongside truthfulness values. The company maintains gender diversity along with community engagement through its various initiatives which demonstrate global standards and traditional Indian values. The combining of environmental social governance principles and innovative sustainability measures makes Infosys a global front-runner in ethical business governing systems.
The companies Tata Group and Infosys show full compliance with SEBI’s LODR guidelines and mandatory CSR requirements under the Companies Act,2013 from both legal and ethical points of view. By integrating ethical principles with legal requirements Indian businesses demonstrate how to develop governance systems which protect both legal compliance and stakeholder welfare.
Traditional Indian values have become a part of Unilever’s corporate governance framework in their global business activities across India. Their governance framework develops strength through the incorporation of stakeholder inclusivity and environmental responsibility which unites local ethical standards with global requirements. Hindustan Unilever Limited’s (HUL) water conservation and rural development programs show multinational enterprises how they can implement Indian cultural values to solve domestic issues and satisfy international benchmarks.
Their governance practices adopt legal requirements for environmental regulations and labour laws to ensure alignment between ethical standards and regulatory requirements.
Ancient wisdom, Modern Responsibility: The Path Forward
Traditional Indian ethics united with international corporate governance frameworks create a revolutionary chance for transformation. Businesses can build trust and sustainable practices through global governance models that include the Indian values of ‘Dharma, Satya and Ahimsa.’ This methodology simultaneously connects different cultures and builds ethical-based governance frameworks that all societies can accept.
In a world where profit making often overshadows ethical considerations, this alignment represents a future direction because businesses can succeed economically while making beneficial societal and environmental contributions. Companies should prioritize stakeholder welfare by embedding ethical leadership into corporate decision-making, integrate ethical leadership and go beyond compliance in CSR Initiatives. The need of the hour is the ethical and corporate governance unification which will lead to a future where traditional wisdom and contemporary methods blend into an equitable international economy.[24] [25] As businesses navigate an era of rapid change, those that redefine success, not just by making profits but by the trust they cultivate and the legacies the leave, will shape the economies of tomorrow.