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CEO as Chief Ethical Officer and Trustee

By Rajesh C. Oza Email By Rajesh C. Oza
December 2013
CEO as Chief Ethical Officer and Trustee

SATYALOGUE
with PostModern Gandhiji (PMG)

An advice column offering the Mahatma’s perspective on modern dilemmas

 

Dear PMG,

For the past few years, while observing my friends travel the world as consultants or influence the markets as investment bankers, I came to question my decision to focus on the humanities in college. So I joined a start-up in Education Technology. My role as a technical writer was to make accessible to teachers and students the software that the programmers code. The good news is that we had an Initial Public Offering recently, and I did quite well financially.

Now I’ve caught the entrepreneurial bug and would like to be the CEO of my own company. But I wonder if this is consistent with Gandhian philosophy. Is it possible to balance wealth creation and truthful action?


Dear Friend,

“Supposing I have come by a fair amount of wealth—either by way of legacy, or by means of trade and industry—I must know that all that wealth does not belong to me; what belongs to me is the right to an honourable livelihood, no better than that enjoyed by millions of others. The rest of my wealth belongs to the community and must be used for the welfare of the community.” (M. K. Gandhi)

Many aspiring leaders confuse leading with ruling (raj). And to be an effective leader, one must have self-rule (swaraj). One sense of swaraj for the well-off is to “know that all that wealth does not belong to me.” While one might mistakenly dismiss this as early 20th-century socialism, Gandhiji believed that wealth does not exist merely to be redistributed by the state; instead, the holders of capital serve as its stewards. This stewardship entails a deeper purpose beyond quarterly profit and loss statements; it requires a longer-term outlook consistent with principled investment for societal benefit.

But this theory of impact investing and trusteeship need not be a disincentive to innovation and hard work. A flaw in modern organization theory is that CEOs must be compensated at princely levels to incent profitable execution of corporate strategies. Imagine that the Chief Executive Officer is instead the Chief Ethical Officer responsible for ethically executing personal, corporate, and societal missions. While not a “fast-buck” way to your next Initial Public Offering, it does offer you an opportunity to invest in the public good.

Think this is impossible? Consider the following from J. R. D. Tata, one of independent India’s leading industrialists: “The best way to apply the spirit of trusteeship [is] … to consider the major problems of the country in connection with the operations of the firm as trustees and not as businessmen merely trying to make money for the firm.”

Why not dream the impossible? Rather than making purely profit-maximizing decisions as a C-corporation, you can improve educational access as a B-corporation, with an institutional mandate of acting in the best interest not only of shareholders, but also of society and the planet.

[Dr. Rajesh C. Oza serves as a consultant to organizations and individuals requiring change leadership. We invite questions for consideration in the PMG column at raj.oza@sbcglobal.net.]

 


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