Leadership and Governance: An Integrated Perspective

For me corporate governance is a mindset, a question of value-systems.

– N.R. Narayana Murthy,
Co-Founder and Chief Mentor of Infosys Technologies Ltd.

Much has been said and written about corporate governance in management literature. But the essence of it is lost in peripherals. The heart and soul of governance is effective leadership. So corporate governance must be based mainly on the essential functions of leadership. This article presents a brief outline of a vision of corporate governance based on the basic functions of leadership.

The Goals of Governance

If it is accepted that leadership is the core of governance, then the goals of governance can be broadly classified in terms of the following functions of leadership:

  1. Self-governance
  2. Wielding Power under the Yoke of Values.
  3. Empowering People
  4. Creating Equity
  5. Forging Fraternity
  6. Promoting the Progressive Evolution of the Individual and the Organisation.

Self-governing Leadership

  • Most of the modern theories on leadership are concerned with creating outer change and leading others. But the inner change is the foundation of outer change and management of self is the basis of managing others.
  • •Someone who cannot manage himself cannot manage others. Conversely, someone who has attained a certain mastery over his own self emanates a subtle inner power and authority, which commands spontaneous obedience from others. So self-governance is the most fundamental function of leadership.
  • This view of self-governing leadership will look at the difficulties faced by a leader in his outer life in a deeper light. Whatever problem the leader encounters in his outer life is a reflection of the difficulty within him. The inner causes are within and if he is able to discover this inner roots of the difficulty within him and correct it, then the corresponding outer problem finds its natural solution.

Wielding Power under the Yoke of Values

  • Governance involves wielding Power – economic, social or political power. There is also psychological power which flows from the leader’s personality and, as we have discussed earlier, from self-governance. This inner power, which comes from self-governance, is the most of authentic form of power. But all forms of Power, inner or outer, have to be put under the yoke of Dharma, which means values derived from the laws of human and universal Nature, which are the foundations of material, moral and spiritual well-being of the individual and the collectivity.
  • •So values should not be chosen arbitrarily according to the personal fancies, or ideals of the leader or cultural preferences like Indian or Western. They have to be based on the universal Dharma of Man and Nature and the unique and intrinsic dharma, swadharma, of the community.
  • •The foundation of all dharmic values is Truth, which has different connotations at various levels. At the ethical level truth means honesty, transparency, candour and rectitude in deadlines; at the psychological level it means harmony between our thought, feeling, will and action, integrated around some dharmic values which lead to the unity, harmony, wholeness and well-being of human life; at the spiritual level it means living according to the guidance and inspiration of our innermost spiritual core of our being which exists beyond our body and mind and integrating our inner being and outer life around this deepest truth of our individuality. This triune conception of truth, pursued individually and collectively, lays a firm and enduring foundation of a dharmic life.

Self-governing Community

  • Among universal dharmas, the corporate worlds of the future have to arrive at a new synthesis of the modern ideals of liberty, equality, fraternity and ecology at deeper and inner levels which creates a selfgoverning community. As Sri Aurobindo explains in his book on ‘Human Unity’, Liberty, Equality and Fraternity are not merely social and political values. They are neither “western” nor “eastern” values but part of the universal dharma of humanity. They are in essence “attributes of the spirit” which means intrinsic qualities of the human soul or the spiritual self in man.
  • •Each human soul lives in a state of total freedom from all inner and outer bondage, especially the bondage of ego and desire. All souls are equal manifestations of the universal Self or Spirit or the One Divine Being. Every soul feels a concrete sense of inner fraternity with all other souls. All the different political systems like democracy, socialism or communism are outer attempters to translate these triune qualities of the soul in the social and political life, but without making any conscious effort to internalize these values in the consciousness of people.
  • •The corporate world can experiment with a new synthesis of these triune values based on the principle of “within outwards”. This requires a system of education and a favourable outer environment. First is a system of education, which leads to a progressive inner realization of liberty, equality and fraternity in the consciousness of people. Second is an outer environment, which allow this inner realization, as it progresses, to organize itself spontaneously in the outer life.

Empowering People

  • •Let us now move on to the other principles of governance. The first one is empowering people which means liberating and energizing people with minimum rules and maximum freedom what the management guru Tom Peters called as “Liberation Management.”
  • •Creating an organizational culture in which each individual is given sufficient freedom and opportunity to think, initiate, decide, organize, achieve, learn and progress towards his (or her) highest potentials and express his potentialities in his work-life.
  • •But this outer liberty is not enough. For the future evolution of the corporate world this outer liberty has to be reinforced by an inner liberty from greed, violence, lust, selfishness and other negativities in emotions, and attachment to false, one-sided, partial and outdated dogmas, beliefs, ideas and ideals in thought. This inner freedom is not merely a matter morality or idealism. It has pragmatic consequences for the corporate world. This inner liberty will open our heart and mind to deeper sources of innovation, creativity and sensitivity to higher values and felicitates the flowering of emotional and intuitive intelligence.

Creating Equity

  • Awakening each individual in the organization to the equal dignity or divinity of the human essence, irrespective of the position and status in the social hierarchy or variation in capacities and other external factors.
  • •Promoting Distributive Justice, which means equitable distribution of wealth, power, knowledge, information, culture and the fruits of development in the community. We must note here equitable does not mean equal. Perfect equality of distribution is neither possible nor desirable in the economic, social and political life. There can be equal access to resources and opportunities like knowledge, information, education or training and other opportunities for growth and learning. But the reward system has to be based on capacity and contribution.
  • •Creating an equitable reward system, which means each individual gets the reward he (or she) deserves according to his capacities, creativity or the nature and quality of his contribution to the organizational goals or to the well-being and progress of the group.
  • •Minimize levels of hierarchy and encourage free flow of information and interaction between various levels of the organization.
  • •Sharing of wealth and profits in such a way that there is no large disparity between the higher and lower income groups in the organization.
  • •This feeling and effort towards equity should extend beyond the organizational community to the larger economic and social environment, which means, there must be a conscious effort towards creating an equitable and inclusive social order in the world around.

Forging Fraternity

  • Creating a sense of inner and outer unity and solidarity among people – between management and employees, among employees, and with other stakeholders like customers, supplies and the community and finally with humanity and Nature.
  • •Professional teamwork, pragmatic interdependence, shared values and ideals can create a certain amount of outer fraternity. But for a more enduring unity, we have to create an inner fraternity based on a deeper emotional and psychological solidarity among people. To achieve this, groups like customer, suppliers or employees should not be considered as abstract or professional categories with whom we enter into an impersonal or contractual relation. They have to be viewed as living human beings with inner and outer needs and aspiration and with whom we enter into an intimate personal relation.
  • •Similarly with Nature: Man is part of Nature not only physically but also psychologically and spiritually. So Nature has to be viewed not merely as a physical and biological organism but a living conscious Being or a Universal Force of the Spirit, with a physical, psychological and spiritual dimension. The integral aim of ecology is attunement of human consciousness and life with universal Nature in all the dimensions of our being – material, psychological and spiritual.

Promoting the Progressive Evolution of the Individual and the Organisation

  • Creating a system of Education and Motivation, which leads to the progressive evolution of the individual and the organization from the physical, vital and the mental to the spiritual dimensions of consciousness.
  • •Each individual has to be awakened to the highest spiritual goals and aims of life. But for practical motivation each individual has to be taken as he/she is in his/her present condition and helped to take the next higher step in evolution and a step towards his spiritual destiny, like for example from physical to vital, from vital to mental and from mental to the spiritual.
  • •Making a conscious effort to constantly enhance the capacities, creativity and contribution of employees through continuous education, a training and co creation or partnership.
  • •The organization as a whole has to be steered toward higher and higher levels of growth by reorienting the goals of the organization towards deeper, higher and more inclusive vision, values and ideals. For example, stakeholder value is a more inclusive ideal than shareholder value; creativity, innovation and knowledge-management is a deeper and higher ideal than efficiency and productivity; ecological and social responsibility is a higher ideal than profit-maximization for the company; employee well being is a greater ideal than skill-development.
  • •In this paradigm of corporate governance, full, harmonious and integral development of the human potential in the organization in all the levels of human consciousness – physical, vital, mental, moral, aesthetic and spiritual – and its harmonious and integral self-expression in the outer life is the aim of organizational development.

The report on Corporate Governance has to give an account of the status or progress of the organization in all these six functions of Governance.


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