Ethical corporate governance refers to processes and policies deployed by a company or organisation to deal with the day-to-day businesses, ensure a balance between profit making and service delivery without venturing into unethical practices.
It is based on the principle of balance of equity, which recognizes that an organization’s responsibility extends beyond maximizing value for the shareholders. It considers the interests and rights of all stakeholders including the community as large and aims to ensure their fair treatment and consideration in decision-making processes.
In this context, following values play a central role in ensuring ethical corporate governance:

• Fairness: It means treating all the stakeholders without discrimination or favoritism. For instance, employees performing similar jobs/duties will be compensated equally while accounting factors such as experience, performance and tenure with the employer. It also means eliminating biases based on caste, colour, race etc. during hiring as well as during service.
• Transparency: Transparent and independent auditing of financial reports, business decisions and conducting business review benefits all stakeholders. It can also help cut costs associated with legal battles, foster better public relations and place the company as an attractive option to investors.
• Trust: A robust grievance redressal mechanism, safe work environment, valuing diversity can help build customer trust, boost labour productivity and promote a positive work environment. Trust is fostered through transparent working and delivering on commitments.
• Responsibility: Application of ethical values, such as transparency, accountability, compliance to laws related to corporate social responsibility, waste management etc., can ensure responsible and sustainable business development. It recognizes the duty and obligation to act in the best interest of all stakeholders.
• Integrity: Acting with integrity means being honest, ethical, and maintaining high moral principles. It involves being transparent in business dealings, maintaining consistency between words and actions, and adhering to ethical standards.
• Leadership: To be effective, company’s leaders must take responsibility for their decisions and the performance of the organization. The leader of a company should design and adhere to a code of ethics that helps management promote ethical corporate governance.

India has witnessed multiple corporate scams like Harshad Mehta Scandal, Satyam scam, and Sahara Scam. They highlight the need for stronger regulatory oversight, improved corporate governance, and increased accountability to detect and prevent such fraudulent activities.

The Global Burden of Disease Study 2019 estimated that mental health disorders, including work- related stress and burnout, affected approximately 197 million people in India. According to an NSSO report, most employees in India work for more than 48 hours a week higher than the ILO’s prescribed time limit.
The high levels of work-related stress, long working hours, work-life imbalance, and incidents of workplace harassment contribute to adverse physical and mental health affecting overall well-being and productivity of the employees. To address such issues, there is an urgent need to formulate policies promoting a safe and nurturing workplace environment by engaging all stakeholders.
Ethical issues that should be considered while formulating the policies:

• Unethical sales practices to attain unrealistic targets: Organizations set targets like monthly sales figure or product production number, which seem unrealistic and unattainable. It puts undue pressure on employees, who are often trained to execute unethical sales practices as witnessed recently in case of a leading organisation in India’s ed-tech sector.
  • The policies should be formulated in a manner that should address these issues without compromising the organisational aim of profit making and growth potential.
• Discrimination and harassment: Laws require organizations to provide equal employment opportunity and recruit diverse workforce, without bias towards any race, ethnicity, gender, disability etc.
  • However, harmless colour jokes, group mentality such as non-inclusion of women in social gatherings are some of the subtle forms of discrimination that are prominent. Policies should address such issues through building personal values and moral fostering.
• Balancing rights with duties: Long working hours hamper productivity and quality of one’s work. For certain jobs, such as hospitals, overwork can raise the number of accidents that can lead to loss of life. However, such a situation poses a challenge in terms of balancing the right of the patient for treatment and a health service provider’s physical and mental health.
• Toxic workplace culture: Organizations helmed by unethical leadership are plagued by a toxic workplace culture. Leaders manipulating sales figures and data or pressuring employees often disrespect and bully their employees. The practice of hiring employees for “cultural fit,” can become a smokescreen for discrimination, resulting in ethical issues and legal ramifications.
• Occupational hazard: Activities such as mining, foundries and metallurgical industries etc. are physically daunting and pose risk to life. In this regard, ethical guidance and conduct needs to be factored in the legal responsibilities of stakeholders such as employers, trade unions, social security institutions, insurance companies etc.

Creating and sustaining an ethical workplace culture takes time, effort, and patience. Core values such as integrity, empathy, transparency etc. can help build an ideal workplace culture fostering good behaviour. Such measures along with limited working hours, providing a nurturing environment, regular psychological evaluations etc. can boost productivity and improve work culture.