I am tempted to republish this article in this blogpost as the nation needs to rethink, reinvigorate and move forward to reach its visionary goal of becoming a developed nation.
Character and Competence
B Yerram Raju
Economist and Founder-Director,
Telangana Industrial Health Clinic Ltd. Co-Author of the book ‘A Saint in the
Board Room’ (2011)
Global Inequality Report 2022 mentioned that top 10 percent earn
as much as the bottom 64 percent. India’s policy reforms during the last two
decades saw high growth and high inequality levels intermittently. Quite often
we also witness confrontation between the legislatures and Courts. We have also
come across persons of acknowledged high competence landing in jail. Why?
Sustainable and inclusive growth demands both competence and character.
In order to define competence and character, and seeing the paths of their
convergence, some storytelling becomes necessary.
The McKinsey Global Institute’s latest research on human development in
Mapusa, a small town along a historic trade route in Goa, and in Porto, the
second largest city in Portugal, unfolds “the story of both places that had
virtually the same GDP per capita of $33,000 in 2019. At the country level,
they are worlds apart: India’s GDP per capita was $6,700 (Purchasing Power Parity)
or US$1941.82 in 2019, compared to $34,900 in Portugal—overall more than five
times less.”
Nevertheless, we are witnessing a few reputed leaders of self-aggrandisement and
self-esteem directing the nation into the debris of material prosperity while a
few others are wedded to the development of society. Hence, there is a strong
need for recalling the basic principles of living that our inherent culture
taught us emphasising competence with character.
S Radhakrishnan, the philosopher-statesman of India, said: “The ideal
man of India is not the magnanimous man of Greece or the valiant warrior of
medieval Europe but the free man of spirit who has attained insight into the
universal source by rigid discipline and the practice of the disinterested
virtues. He has freed himself from the prejudices of his time and place.”
Indian heritage lies in humanism and universality. This sets the tone for
redefining character and competence as traits of individuals and corporates.
Wheels within Wheels
Meta, Amazon, Google, Wipro, Microsoft etc, are in no mood to keep their roasters intact. Jobs are removed in
tens of thousands. NINJA (no income no job, no asset) had set in again. Banks
and housing, and real estate companies are scared of their recoveries. Rising
interest rates, lowering consumption sentiments, volatile markets, and untamed
inflation are at the beginning of a new end.
India, for the moment, seems to make a difference, raking in higher than
expected revenues in GST and GDP growth forecast
from the CRISIL placing it at 6 percent and Nomura at 5 percent in ‘23-‘24. When winter sets in, can spring be far behind?
Pure economics defies answers to many problems confronting society,
while behavioural economics does offer solutions if character and competence
move like two wheels of the forgotten bullock cart.
If persons of character are afraid of their shadow and fail to take
decisions keeping in mind the three ‘angel-robed demons – Central Vigilance
Commission, Central Bureau of Investigation and Comptroller-cum-Auditor
General’, competence in them takes a backseat. Autonomy, transparency, and
timeliness in taking decisions never mean ignoring rules and regulations.
Lack of character is different from failure of character. Lack of
character is unpardonable while failures are remediable. People who fail should
be given an opportunity to correct and they should be made clear about the
boundaries and consequences of the failure.
In Chapter 13 of Bhagavad Gita, (Kshetra, Kshetragjna Vibhaga Yogam),
Lord Krishna defines the character: ‘Amanitvamadambhitvam,
Ahimsaakshantirarjavam, Acharyopasanam, Saucham, Sthyryamatmavinigrahah’.
The substance of the sloka is that a person with character should be devoid of
pride and disrespect; should be humble, patient, and steady; should be able to
have control over his self; be clean and clear in thinking and have restraint.
We are at a point where we know what is right but are hesitant to adopt it. The
Supreme Court had to pull up a plaintiff over the penalty sought on YouTube for
airing what he preferred to see.
High Character, Low Competence
How do we handle people on our leadership team who evidence the highest
character, and the best motives, but are incapable of doing effective work? In
a matrix of competence and character, fixing such people would be difficult.
Organisations also skip them while mapping coaching and mentoring persons for
results and sustainable growth. The loss is to the organisation and not to that
person.
If we can draw a matrix of high character with high competence, high
character with low competence, low character with high competence, low
character with low competence in a Board of Governors, we will be able to
establish the reasons for the failure of many a corporate who got the best
ratings but ended up as disasters.
The high character – high competence scenario will automatically lead to
a high corporate governance (CG) scenario. But one without the other will not
lead to a good CG scenario. It is said, “Economics without ethics is empty, and
ethics devoid of economics is limp”.
We did not learn our lessons after the 2008 recession. The proverbial
Vijay Mallyas proliferated and none of the cases of misgovernance and colossal
bank losses got resolution. Over a decade of arguments in the highest courts of
jurisprudence, involving malfeasance, misappropriation, corporate failures, and
bad governance still defy resolution. On top of it, even the Insolvency and
Bankruptcy Code gives the longest rope for resolution and those resolved,
benefitted the errand.
It is hard to disagree with EV Ramasamy Naicker, a Tamil philosopher of
the 20th century, who said, “When I used to carry heavy bags during my younger
days, my back would bend due to the weight, but not due to shame. Being
straightforward and having less food is far better than diluting our character
and taking lots of rich and quality food.”
The history of today’s wealthiest
nation tells us about what happened between 1923 and 1948:
-
President
of the largest steel company, Charles Schwab, lived on borrowed capital for
five years before he died bankrupt.
-
President
of the largest gas company, Howard Hudson, went insane.
-
One
of the greatest commodity traders, Arthur Catton, died insolvent.
-
President
of the New York Stock Exchange, Richard Whitney, was sent to jail.
-
A
member of the President’s Cabinet, Albert Fall, was pardoned from jail to go
home and die in peace.
-
The
greatest ‘bear’ on Wall Street, Jessie Livermore committed suicide.
-
President
of the world’s greatest monopoly, Ivar Krueger committed suicide.
-
President
of the Bank of International Settlement, Leon Fraser committed suicide.
It was the pursuit of money to the exclusion of other goals that caused
them their downfall.
Market behaviour largely depends on individual investor behaviour like
buying-high-selling-low or buying-low-selling-high. Behaviour here largely is
related to the character and not pockets. This character is typically borne of
greed and not need. It is more like a honeybee that flits from one flower to
another, sucking honey as it flies. But when it perches on its hive, it stops
humming.
Man is made by his own beliefs. ‘As he believes, so is he.’ (Bhagavat
Gita). Henry David Thoreau may have told in different words, the same thing: ‘What
a man thinks of himself: that is what determines, or rather indicates his
fate.’
We need resilient boards of companies that can build teams of executives
with foresight, virtuous and timely response, and adaptation capabilities.
India is at the cusp of change and the dream of India 2050 has to be
realised by a generation that is seeing the garbage at the foot of the hill.
They should be directed to reach the top of a mountain and every step counts.
It is competence with character that should enable a crowning future.
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