Premji at the Alumni Homecoming

No sustainable business sans ethics: Premji

From The Financial Express, November 22, 2004

JAMSHEDPUR, NOV 21: Even though all the three eminent panelists spoke in favour of ethics in business it was the Wipro Corporation chairman, Azim Premji, who was most straightforward in saying that there could be no sustainable business without ethics.

Participating in the panel discussion arranged by the XLRI Alumni Association here on Saturday evening on whether “ethics in business is an oxymoron”, Mr Premji minced no words to convey that after what has been seen “particularly over the last three-four years, there is no doubt that there could be no sustainable business without ethics”.
He was alluding to collapses like that of Enron and the consultant group, Arthur Andersen.

“The simple truth is that business revolves around trust; we need to have the trust of our customers, trust of our shareholders, partners and suppliers,” said the Wipro chairman, who had earlier in the day inaugurated the B-School’s e-business centre.

His recipe for building a successful company was that “one had to build it on a bedrock of integrity”.

“No regulatory or legal body can ever impose trust and no Act by itself can ever guarantee its implementation; it can only be addressed by an effective leadership that pervades the entire organisation,” said Mr Premji.

Financial markets take notice of well-managed ethical companies and reward such companies with a higher value rating, he observed. Leaders must understand that their primary job is as much to build profits as to build a culture of values, “as with embedded values business becomes easier,” he said.

“Values help attract for a lifetime those people who want to do business with you, at the same time repelling those whose values may not be the same as yours,” said the Wipro chairman, adding that “values can create certain strong anchors that help weather the uncertainties of business”.

Earlier, speaking first, the young and charismatic Mr Suhel Seth, CEO, Equus Red Cell, underscored that “ethics is ultimately about being responsible not to society, not to stakeholders, not to shareholders, not to Sebi, not to RBI but being responsible and honest to one’s own conscience”.

“And that’s the question we need to answer,” he said, “it is time we are accountable to our own inner conscience, it is time we are accountable for the kind of life we wish to lead”.

Underlining the fact that the practice of ethics has been going on in business since ages, Mr Tapan Mitra, ex-chairman of Indal and Haldia Petrochemicals, said: “if the history of business says that business has survived and prospered by creating and maintaining trust then ethics in business in not an oxymoron, it is an essential ingredient”.

“Churning out rims as reports on corporate governance is not ethics, but living that spirit is ethics,” Mr Mitra added.

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