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banks under pressure, in many cases,are believed to be the Corporate governance and ethics are closely interlinked. On
result of poor governance practices. the one hand corporate governance requires framework of
rules clearly defined roles and responsibilities and well laid
If we look at the Governance Structure and systems and down systems and procedures, on the other hand it requires
procedures in business organisations and banks, a sense of that governance framework is fairly executed and here
satisfaction will emerge. One will find a well laid system and comes ethics. The corporate governance should be aimed
procedure, a qualified board of directors, active Audit at taking care and protecting the interest of all stake
committee, presence of a risk governance structure and holders while safeguarding the public interest. Corporate
presence of vigilance officers. Despite all this, Corporate governance should also aim at sustainability of the
governance has been coming under public scrutiny and cases organisation.
of governance failure in banks has forced RBI to look at the
"Corporate Governance" afresh. To improve,Basel Customers' rights of safe and transparent business need to
Committee on Banking Supervision (BCBS) has published" be protected. Retail customers do not have enough strength
Corporate governance principles for banks in July 2015". as a stakeholder and therefore their interest needs to be
Recently, RBI has come out with a discussion paper on this protected. Banks have become financial behemoths and this
issue which has resulted into a meaningful and serious has led to unethical practices of cross-selling. Banks should
discussion among different stakeholders. not compromise the needs and interest of their customers
while pushing sales. The need for a long term relationship
One of the reasons may be that some of those responsible with customers also necessitated ethical behaviour on the
for corporate governance are not behaving as they are part of business organisations.
expected to behave (Ethical behaviour). Their actions are
lacking ethical current and content. Being ethical and being Shareholders' interest needs to be protected by a sound
legally correct are two different aspects. Adherence to law accounting and valuation policy. The disclosure norms under
is the minimum requirement because legally correct Basel regulation have brought transparency in disclosing
decision may be unethical. Any business organisation has financial performance of the bank but a sincere effort on
many stakeholders and being ethically correct means being the part of all concerned not to hide any pertinent
loyal and honest to all stakeholders. A work culture which information is required. Disclosure norms for other
promotes not only legally correct but ethically correct too businesses need to be strengthened.
needs to be inculcated.
Corporates have to always do a tight rope dancing between
Business/banking is carried out in a fiduciary capacity. The the interest of shareholders and interest of other stake
fiduciary relationship between the Investor/ depositor and holders who have created wealth and value for the
the corporates/bank demands a very high standard ethical organisation. The employees of the organisation are an
behaviour by management and employees. The conduct of important stakeholder and therefore their interest is also
a business organisation should be transparent and above of much importance. Employees are looking for fair wages,
suspicion. The Board of Directors must ensure that the equal opportunity for growth and a safe &conducive work
control of the organisation is in its hand and unfettered environment. Governance and human resource practices
decision power to individual executives without proper should not be discriminatory based on caste, creed, religion,
control is not possible. Any kind of conflict of interest needs or faith.
to be managed in a transparent and defined manner. The
management should set the tone of ethical behaviour from The society provides the business organisations
the top. In majority of the business organisations, whistle- infrastructure, resources, and consumers. Any business
blower policy has been framed and adopted but it has not organisation will survive only if the society in which it
garnered active support from the employees as there is a operates, prospers. There exists a relationship of mutual
trust deficit. benefits between a business organisation and society. If

"Time heals some things, but love heals all things."

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