Money Can Buy Everything

A woman called me up recently and said that someone is willing to pay her huge amount of money for investment in her business. Problem was, they did not want to disclose their identity and would be transferring money from Sri Lanka. I told her I suspected that the people involved are attempting money laundering. She believed the same and refused the transfer of funds.

I realized that the people behind white-collar crime believe one thing – “Money can buy everything”. That is the core motivation. Otherwise, professionals earning huge salaries would not be rationalizing fraud. The American money market economy reiterates this concept; hence, even the normal people are pursuing money blindly. All relationships and every person seem to have a price. So let me ask you the question:

Now let me paint you a picture of the future world. In that world you do not have to produce kids, no woman has to get pregnant and tolerate the pregnancy woes for nine months. Whenever you feel like becoming a parent, you just have to visit a shop. Lifeless kids’ bodies are available of all sizes and shapes. When you choose one, the shopkeeper installs a battery and wham, the kid is alive. You can choose a new-born, a two-year-old etc. at a certain price.

Next, you don’t have to train the child on anything if you don’t want to. You have the option of raising the child the normal way or using patches. For example, if you wish your child to learn cricket, you just purchase a patch and install it, and the kid knows cricket.

Contemplate the advantages of this situation. As a parent, you won’t have to spend countless hours changing dirty nappies and watching the child struggle to learn to walk and talk. Mothers won’t have to sacrifice their professional and social life. You won’t have to sacrifice Dhoni and teams match to watch your son’s floundering attempts on the cricket field. You won’t have to watch your daughters giving a disastrous dance performance. After these, you won’t have to give a beaming smile and make it sound that it was the greatest performance in the world. You won’t have to make any sacrifices. There will be no pain, no tears of frustration and no disappointments. So now, let me ask you a question.

If you have answered that you would prefer the natural way, then the question is why? Why choose hard work, heartbreak and pain over an automatic high quality child? The reason goes back to root of our psychology. Raising a child gives purpose and meaning to the life. When our child does well, we feel a sense of satisfaction, accomplishment and pride. The joy and happiness we get are worth all the tears, heart breaks and sacrifices. Parents put their life on hold for 20 years to raise a child and then the child leaves home to make his/her own life. If you look it from a financial angle, it doesn’t sound much of a deal. Yet, nearly every adult wants to do it.

If I look this from another angle, another basic human need is sex. Hence, according to this viewpoint  prostitution should be legal in all countries (It is illegal in India). There should be no moral judgment on purchasing sex. The question is then why do the people who use prostitutes don’t stay with them? Why do they come back home? Why do most of them go back to the same prostitute rather than try a new one every time? The reason is simple. However good the sex was, it doesn’t give a sense of belonging. Objects don’t give happiness, relationships do. Commoditizing takes away the warmth, peace and happiness.

The same difference applies for money earned through hard work and by frauds. Money earned the wrong way doesn’t give you pride and joy. I think all of us remember our first salary and the sense of “I did it”. The salary was peanuts in comparison to twenty years of studying hard. But we remember the first salary till our dying day.

In my opinion, money can only give a comfortable standard of living and nothing more. We don’t even need money even power, recognition and status. We simply are getting lost in the mad race.

Closing Thoughts

Today is Mahatma Gandhi’s death anniversary, one of the most recognized and respected leaders of the 20th century. Even in this day and age, his dhoti, shawl and chapel can be purchased in India in less than Rs 1000/-. In President Obama’s inauguration ceremonies, Michelle Obama’s clothes were a topic of discussion. Some would argue that present days leaders need it. I think if Gandhi ji had been alive today, he would be living in less than Rs 20,000/- a month.  We need to re-look where we are heading in the mindless pursuit of money while convincing ourselves that our life in other areas is fine. As Mahatma Gandhi said – “One man cannot do right in one department of life whilst he is occupied in doing wrong in any other departments. Life is one indivisible whole.”


Justice Verma’s Report – A Respite for Indian Women

Justice Verma’s report besides covering sexual harassment at workplace also covers other crimes committed on women. Most of these questions were never raised or those who raised them were unheard. Nevertheless, for a civilized democratic nation, the existing social attitudes need to be challenged. India cannot become a global super power when it is the fourth unsafe country in the world for women, nearly 50% of its population. It is our duty to question existing archetypes, advocate change and bring about new thinking.

India was among the few countries that gave equal rights to women on Independence in its Constitution. Mahatma Gandhi thoughts reflected his open thinking in the following words. Let us make them a reality in this century.

“Woman is the companion of man, gifted with equal mental capacities. She has the right to participate in the minutest details in the activities of man, and she has an equal right of freedom and liberty with him. She is entitled to a supreme place in her own sphere of activity as man is in his. This ought to be the natural condition of things and not as a result only of learning to read and write. By sheer force of a vicious custom, even the most ignorant and worthless men have been enjoying a superiority over woman which they do not deserve and ought not to have. Many of our movements stop half way because of the condition of our women.”

The issue is at the heart of Indian society and below are few points from the report that I wish to bring to your attention.

1.     Rape and Sexual Assault

The Indian Penal Code defines rape as:

“A man is said to commit “rape” who, except in the case hereinafter excepted, has sexual intercourse with a woman under circumstances falling under any of the six following descriptions:—

First.—Against her will.

Secondly.—Without her consent.

Thirdly.—With her consent, when her consent has been obtained by putting her or any person in whom she is interested in fear of death or of hurt.

Fourthly.—With her consent, when the man knows that he is not her husband, and that her consent is given because she believes that he is another man to whom she is or believes herself to be lawfully married.

Fifthly.—With her consent, when, at the time of giving such consent, by reason of unsoundness of mind or intoxication or the administration by him personally or through another of any stupefying or unwholesome substance, she is unable to understand the nature and consequences of that to which she gives consent.

Sixth.—With or without her consent, when she is under sixteen years of age.”

In Indian society, few women are able to exercise their right to object or say no. Men obtain consent through psychological, emotional, financial and physical coercion and threat. The popular concept is that rich men do not rape, it is only poor men who rape women. If a rich man obtains consent through coercion, the women agreed. The standard should be clear. Any man who forces himself on a woman when she has said no is attempting rape. Sex with a woman when she is opposing or resisting is rape. Consent given out of fear or criminal intimidation is rape. Period.

The situation of an Indian wife is the worst possible in the world. Every woman in the world has a right to say no, except an Indian wife. She is duty bound to have sex with her husband. For the first time Justice Verma has included marital rape. Wife is not a property of the husband and has the right to revoke her consent to sex during the course of her marriage. The report states- “A rapist remains a rapist irrespective of the relationship with the victim.” In mordern context, marriage is a relationship of equals and consent cannot be assumed as implied.

Secondly, rape victims face extreme humiliation in courts when their past personal life is dragged for discussion. The defense lawyers ruin the reputation of the victim by bringing past love affairs. In Indian society, if a woman has sex outside of her marriage she becomes characterless. The whole attitude adds insult to injury. Justice Verma has recommended that a woman’s past life cannot be a subject matter for debate in court in a rape case.

It requires extreme courage in India for a woman to report rape and most of the cases go unreported due to the social stigma a raped woman faces. She is ostracized and alienated by the society and her reputation is ruined. The abusive men proudly boast about their power and accomplishments in brow beating women into submission. This attitude needs complete revamping as it distorts the justice system. Society should view rape as a crime and not evaluate it on a shame-honor paradigm as it puts the victimized woman on trial instead of the rapist.

Sohaila Abdulali, a rape victim had succinctly put it – “Rape is horrible. But it is not horrible for all the reasons that have been drilled into the heads of Indian women. It is horrible because you are violated, you are scared, someone else takes control of your body and hurts you in the most intimate way. It is not horrible because you lose your “virtue.” It is not horrible because your father and your brother are dishonored. I reject the notion that my virtue is located in my vagina, just as I reject the notion that men’s brains are in their genitals.” This brave heart has the courage to break the rigid thinking and fight against atrocities.

2.     Eve Teasing and Stalking

The Indian Journal of Criminology and Criminalistics (January- June 1995 Edn.) has categorized eve teasing into five heads viz. (1) verbal eve teasing; (2) physical eve teasing; (3) psychological harassment; (4) sexual harassment; and (5) harassment through some objects. In India the safety of women is at risk in all public places and not just the workplace. Women are sexually harassed in public spaces by men making unwarranted comments. In some cases, the obscene words and gestures seriously impact the dignity of women.

A minor girl in India from the time of achieving puberty becomes a target of eve teasing. As India is a conservative society, she learns to suffer the indignities quietly. As such with the parental attitude that girls are a liability, Indian girls have a low self-esteem. They are trained to behave according to “what will people say”. Hence, the young unsure girl suffers psychologically and emotionally without an outlet since she cannot share her “shame”. If she does so, she will be shunned.

For men it is just an entertaining pastime to demonstrate their machismo. They generally go unpunished due to the lax implementation of criminal action in these cases. Women hardly report the cases to police though eve-teasing is a criminal offence

Justice Verma’s report gives recommendations to curtail eve-teasing. He has suggested  deputation of female police officers at public places, installation of CCTV cameras in public places, filing of police complaints by public transport and public place operators etc. These are steps in the right direction.

If a man wishes to talk to a woman, he can do so in a graceful and dignified manner without offending the sensibilities of the woman. He does not need to stalk a woman, behave in an uncouth and uncivilized manner to get attention. Moreover, if a woman has rejected his advances, he should accept that gracefully. His interest and her rejection do not give a right to harass and abuse her. The women should not adopt a defeatist attitude or try to convince themselves that the man is showing affection and liking. He is blatantly saying that he does not respect you or your wishes. Thankfully, Justice Verma’s report has included stalking as a criminal offense.

Closing Thoughts

Courage is not the absence of fear. Courage is about fighting fear tooth and nail in every step we take to define a new path. The educated women and men of India need to fight this battle for their less privileged counterparts. When Indian women could fight shoulder to shoulder in the non-violent struggle for Indian Independence, they can fight now too. In life, always the crazies have brought about change. Don’t be scared to be marked as quirky or non-conformist, you are in good company. Before Independence, British thought Mahatma Gandhi as a fruitcake. The point is, no one will fight your battle for you. We need to do it for ourselves. Progress of Indian women serves India’s national interest. Hence, let us move forward with courage and conviction to redefine the status of women in Indian society


Report of the Committee on Amendments to Criminal Law – Justice Verma,

Development of Moral Authority and Responsibility

Mahatma Gandhi epitomizes moral authority in leadership. In every aspect of his life, when he witnessed injustice, he felt morally responsible to correct the situation. His following lines on the seven deadly sins effectively capture the root cause of the ills prevailing in the society in the 21st century

Seven Deadly Sins

“Wealth without work
Pleasure without conscience
Science without humanity
Knowledge without character
Politics without principle
Commerce without morality
Worship without sacrifice

In the business sphere, the issues relating to financial crises, sexual harassment cases, oil spills, nuclear power station disasters, money laundering, bribes and corny capitalism – all arose because of the seven points.

It is not that moral responsibility has disappeared from Indian society. Anna Hazare’s fight against corruption, Arvind Kejriwal’s exposes and the candle light march for the Delhi gang rape victim, all show that leadership based on moral authority flourishes and forms the foundation of humanity.

The challenge is that the percentage of people showing moral responsibility is small. It is disheartening that India, a country thought as the heartland of spiritual awakening world over, is finding a shortfall in moral leadership. The difference between Gandhi and Hitler was only about conscience leadership. They both had vision, passion, communication and people management skills. Now we are seeing more leaders without a conscience.

So what changed over the centuries? If we see, a human body has physical quotient (PQ), intelligence quotient (IQ), emotional quotient (EQ) and spiritual quotient (SQ). In the 20th century, the focus suddenly shifted to IQ and PQ. In the age of industrialization and development, people ignored EQ and SQ.

In the 18th century, most of the literate people would have read their religious text. Though religion does not ensure ethical behaviour, it still lays down some parameters for virtues. In this century, just small percentages of literate people have read religious text and are capable of discussing the finer points. Therefore, the solution is to bring back focus on EQ and SQ. People with higher EQ and SQ are more ethical and morally responsible. Punishing people after they have conducted a crime isn’t the solution; we need to build the character.

The onus of responsibility rests with all the adults in the society. It may sound like a tall order, but there are a few things that each adult can do without much effort. Here are my three suggestions, share with me your ideas on the same.

1.     Use Gamification  

With technology, kids and adults are addicted to playing games on computers. It is unlikely, that kids now will sacrifice their computer to listen to grandma stories of old times. The stories had messages, which taught kids the difference between right and wrong. The schools had moral science classes, doing the same. In the current setup of nuclear families and education system, the kids lack it. Parents therefore can buy computer games dealing with ethical dilemmas, moral lessons and spiritual ideas instead of Angry Birds. It would be a step forward to see kids addicted to such games and not those showing violence and abuse.

Even in the business world, ethics can’t be taught in a day. If gamification is used to issue one ethical dilemma every day which staff participates in, the awareness level of the staff will be much higher.

2.     Take Speaking and Writing Engagements

Indians have vast access to knowledge on spirituality and ethics. The number of Indians speaking and writing about morals, ethics, spirituality etc. needs to increase. We can use blogs to give our messages, write in newspapers and journals, become guest lecturers in schools and colleges and take speaking engagements in business seminars.  The gap in EQ and SQ is huge. We need to build awareness by communicating the stories and building the skills.

Do the same in business environment. Have a business ethics blog on the intranet, make videos on ethical dilemmas and have classroom training on the same.

3.     Build Communities

In US there are huge number of societies and communities focused on addressing various problems. For instance, they have anti-bullying communities that propagate no bullying in schools. However, in India most of the societies are focused on religious aspects or charity. We need to build communities, whose members are brand ambassadors for personal and business morals. As we have seen from the past events, collective strength matters enough to force government and various authorities to take the right steps. We can then ensure better ethical education for the children and young adults.

In business too, it is easier to build an ethical culture when champions are appointed to propagate business ethics. Members of operation teams besides ethics officers are required to enhance the ethical values of the organization.

Closing thoughts

We have a choice, to ignore the ills of the society, complain about them or do our two bits to help improve it. From my experience, it is far more satisfying to contribute positively. Even guest lectures to college students on business ethics sow the seeds for morally conscious business. India has a huge Gen Y, and Gen X has to address this problem. Otherwise we will continue to see the increasing crime rate and see our own children become part of a racket.


Does Change Obstruct Ethics?

The media regularly reports that organizations are paying huge fines for ethical breaches. Politicians, defence officers and CEOs are getting exposed in illicit sexual relationships. It appears that present day leaders don’t feel obligated to show professional and personal ethics. One is forced to contemplate did the world always lack ethical discipline? Alternatively, is it that the volatile and dynamic business and political environment has contributed to the decline in ethical values?

In my view, history has shown that during times of massive change in social and political environment ethical values fall. As the environment stabilizes, ethical behaviour increases. I will give you the reason why I think so. Before that let me share with you this beautiful verse from “The Lines of Experience” written by Je Tsongkhapa over 2000 years back.

Ethical discipline is the water to cleanse the stains of wrongdoing,

And the moonlight to cool the painful heat of the kleshas (disturbing/ angry thoughts),

It makes you stand out from the crowd like a great mountain.

By its force, you can tame all beings without intimidation.

Knowing this, great beings guard like their very eyes

The ethical discipline to which they are committed.

I, the yogi, have practised in this way.

You, who aspire to liberation, do the same!

1. Income Inequality

In the present day, corruption levels are so high that a person who stands up for ethics is considered an idealistic fool. Whistle blowers face high level of retaliation and social isolation. Instead of society valuing an ethical person, it stigmatizes the person. However, if you notice carefully, the corruption scams are bigger in the emerging markets than the developed world. Transparency International Corruption Index shows increasing corruption trend in the emerging countries and decreasing trend in the developed world. In the last decade, population of the emerging countries suddenly enjoyed a better standard of living of which they were deprived of earlier. Hence, the changing business environment has inclined them to pursue financial goals at the expense of everything else.

2. Gender Inequality

Look at the impact of change from another lens. Worldwide women are facing higher levels of physical and psychological violence from men. A recent survey showed that working women face twice the level of abuse than housewives. Why is that so? Reason being that working women are challenging the male domination and supremacy established for centuries. Previously, women were doing as they were told and the housewives are still doing so. However, the working women are torchbearers for change and demanding equality. Hence, they are paying the price. The bias is so clear. Half the world population consists of women and the organizations call hiring women a “gender diversity” initiative.

3. Social Inequality

If you look at racial, social and political equality movements, the picture is the same. The Arab world reported increased violence during  revolutions. In India, the under privileged and lower caste people face dire situations and prosecutions for demanding equality. Even seeing the American history, whites increased violence against blacks after abolition of slavery. Hence, even when the conflict is initially non-violent, violence increases when the existing world order is threatened. Those holding beneficial positions in the old order get combative to continue the status quo and compromise human rights. Corporate sector reflects the same problems. White males ruled the business world. Now women and men of different racial communities are challenging their established supremacy. Can we really expect competitive business leaders to give up a superior position without a fight for the goodness of humanity?

In all the three examples, I have highlighted the compromise of human values when social changes occur. Presently, the world population is facing change at all levels. Global economy is in recession, China is threatening US supremacy, emerging markets will become economic leaders, people revolutions has shaken autocratic rules in many countries, technology has connected the global population and women are taking important roles in society. With the political, social and economic dynamics changing the world, can we really expect higher level of ethical behavior in this decade?

Closing thoughts

Change brings conflict. Unfortunately, human psychology is such that a person holding a different opinion, from a mere opponent becomes a tough adversary to enemy number one whenever our self-interest is threatened. Hence, in this dynamic environment expecting high level of ethics from business leaders is somewhat unrealistic. We tend to isolate business and expect organizations to have higher level of ethical disciple than the society around them. When business is a subset of society, how can business leaders portray values different from society.

Until the new world order establishes, ethics and principles would be put on a back-burner.   This viewpoint is definitely not what the regulators wish to hear. What do you think?

Ruminations on Festival of Lights

Indians are in a festive mood celebrating Diwali, the festival of lights symbolising victory of good over evil. It is fascinating that in every religion, light symbolizes good and darkness signifies evil. But without darkness can goodness prevail in humanity? In my view, the darkest hours of our life sensitizes us to our deepest subconscious needs, desires, strengths, weaknesses and negative traits. We even notice the external environment entirely differently. For instance, switch off all the lights in your apartment. In five minutes, you will start noticing the smallest of sounds within and outside the apartment. Darkness heightens all our senses. Then why don’t we celebrate darkness or the darkest period of our life?

During Diwali, Hindu’s celebrate victory of Lord Ram typifying goodness, and defeat of Ravan, the embodiment of evil. However, if you read the fine print of Hindu mythology, Ravan wasn’t evil. As per one version of the mythology, Ravan and his brother Kumbhkaran were Lord Vishnu’s gatekeepers. Lord Ram was Lord Vishnu’s avatar. The story goes that Sanatha Kumara monks cursed Ravan and Kumbhkaran, when the two brothers mistakenly refused entry to the monks thinking they were children. As punishment, they had a choice between being born seven times as normal mortals and devotees of Lord Vishnu or three times as powerful people but enemies of Lord Vishnu. They chose the latter, to be back with Lord Vishnu at the earliest. If one relies on this story, then the difference between good and evil disappears. I end up asking the same question to myself – do we simplify distinctions between good and evil, to feel good about ourselves?

Alternatively, as on Diwali we welcome Goddess Lakshmi, (Goddess of Wealth), do we celebrate to get material possessions? From childhood, society has trained us to celebrate success and shun failure. Though, no one has succeeded without experiencing a huge amount of failure. Even Thomas Edison, the inventor of light bulbs failed repeatedly. Had he not gained strength and insight from his over 10,000 failed attempts, he would have never succeeded. Do we have a clear understanding of what is failure? Or do we just rely on stereotypical image that money, power, material possessions, trophies etc. signify a win and everything else is failure.

Hence, we pray to our respective Gods not to fail us. In my view, God has mapped a path for each human being for progressive growth of their souls. Each obstacle in life is for the spirit and soul to flourish. Thus, accept with serenity all the negatives in life – death, sickness, breakdown of relationships etc.. Why not look upon them as an opportunity to learn more about ourselves. We can take a leaf from Arthur Ashe’s, the first African American grand slam winner. On contacting HIV from blood transfusion he said – ‘If I were to say, ‘God, why me?’ about the bad things, then I should have said, ‘God, why me?’ about the good things that happened in my life.”

We celebrate Diwali on Amawasya, a pitch-dark night without a moon. In a way, we celebrate nature’s darkest period.  I have shared my musings on the subject with you. Now I am going to celebrate Diwali with all of you.

Kingfisher Airlines – Ethical Dilemmas of Mr. Vijay Mallya

Kingfisher Airlines was grounded last month. The agitating employees refused to come to work from 1 October 2012. Employees had been peacefully protesting earlier for payment of their salaries from February 2012. Management ignored the pleas and the plight of the employees increased. On 4 October 2012, Kingfisher’s store manager Manas Chakravarti’s wife Sushmita Chakravarti committed suicide. In her suicide note she stated – “My husband works with Kingfisher where they have not paid him salary for the last six months. We are in acute financial crisis and so I am committing suicide”.

The employees led a candlelight vigil in support of the grieving family. However, there was not even a word spoken about it by Vijay Mallya, the chairperson of the company on such a tragic incident. He did not mention anything on his twitter account until 23 October, and most of the month he was not available in India. Media reported that he flew out of the country in his personal Airbus. Check out the following tweets.

Vijay Mallya ‏@TheVijayMallya – 23 October 2012.

I travel 24×7 where my multiple work responsibilities take me. Sections of media call me an absconder because I don’t talk to them.

His Formula One team reportedly participated in Korea and he attended the race. He then attended the Indian Grand Prix and his twitter comments are below. They caused a storm in the twitter world.

Vijay Mallya ‏@TheVijayMallya – 26 October 2012.

 I have learnt the hard way that in India wealth should not be displayed. Better to be a multi billionaire politician dressed in Khadi

 Vijay Mallya ‏@TheVijayMallya – 27 October 2012.

Kingfisher is probably the most written about Airline in the World thanks to Indian media. Top of mind brand recall must be at its highest.

The comments don’t show true leadership qualities. He appears to be completely disengaged from the situation his employees are facing. A little bit of humility and sharing of pain would have gone a long way in appeasing the hurt feelings of his employees. Though he is not legally liable to pay salaries to employees from his personal wealth, he has to take moral responsibility for his actions that have caused so much tragedy in the lives of his employees. Some personal austerity would have sent a different message to the world. However, in an interview Vijay Mallya made the following statement and refused to take responsibility for the financial mess.

“In a Plc where is one man, who might be the chairman, responsible for the finances of the entire Plc? And what has it got to do with all my other businesses? I have built up and run the largest spirits company in the world in this country.”

Kingfisher’s net-worth was eroded last year. The banks have refused to grant further loans since the outstanding amount is Rs. 7000 crore (USD 1299 million). Accumulated losses amount to Rs. 6000 crore (USD 1114 million). You can read the details in my earlier post (link here).  Since March 2012, Directorate General of Civil Aviation has been asking for a revival plan to resolve the crises. However, Kingfisher management took no concrete actions. On 20 October 2012, the Directorate General suspended the license of Kingfisher Airlines.

The situation is that the bank, investors and employees are the biggest losers. Vijay Mallya’s personal shareholdings in the company is just 1.87%.  His group companies – United Breweries (Holdings) Limited, Kingfisher Finvest India Limited and UB Overseas Limited – hold 33.97%. Individual investors hold around 33%. Banks and other institutions hold the balance shares. Hence, Mr. Mallya will personally not be liable and may not suffer extensive damage to his personal wealth.

Though, recently Forbes has dropped him from Billionaire list and stated that now he is only worth USD 800 million now. He made a satirical comment on it

Vijay Mallya ‏@TheVijayMallya -26 October

Thanks to the Almighty that Forbes has removed me from the so called Billionaires list. Less jealousy, less frenzy and wrongful attacks.

 Closing thoughts

Mr. Mallya is blaming the media for inaccurately bashing Kingfisher Airlines. It is a strange reaction considering the dire state of the company. He has abdicated his professional responsibilities as leader of the group. He is also not taking any moral responsibility for the situation and the damage. I am amazed at his brand management team. The Kingfisher brand was worth a whole lot. Due to his personal negative reactions and his son’s Siddharth Mallya being oblivious to the churning controversies, the public is completely outraged. Besides the moral disconnection, there doesn’t appear to be any control on communications and brand management.

According to you what should be the appropriate reaction for the Chairman of a company in such a situation?


Vijay Mallya flies in to attend Indian GP, blasts media for Kingfisher coverage – Economic Times


Ethical Decisions – Why Bankers Fail At It?

Last week I read the US Senate’s Permanent Subcommittee of Investigations report on “U.S. Vulnerabilities to Money Laundering, Drugs, and Terrorist Financing: HSBC Case History“. Since I am ex-HSBC I felt bad that an organization’s senior management took decisions for growth and profitability at the expense of world security.

I was personally horrified on the thought process of Christoper Lok, former Global Head of Bank Notes  relating to relationships with Al Rajhi Bank, Islami Bank Bangladesh Ltd and Social Islami Bank Ltd. The Compliance department in most of the cases had identified direct or indirect terrorist links with these banks. However, the business teams approached Mr. Lok to maintain relationships and sign off on the Know Your Customer documents. The logic given was that approximately $100,000/- per annum could be earned from these customers. Hence, approval was granted to pursue and maintain the relationships and most of the objections raised by Compliance department were over-ridden.

Bank Notes division had 800 customers. So if I assume that approximately  $100,000/- was earned from each customer, the total revenue would be $80,000,000/-. Though now the bank notes division is closed, but does a bank of HSBC level, need to pursue high-risk business for such immaterial amounts in respect to its total earnings.

With the controls so weak on transaction checks, even a single transaction of these three banks processed by HSBC, could result in terrorist funding. One doesn’t know, but there is a always a possibility that some funds may have been utilized for a terrorist activity somewhere in the world. A few people may have lost their lives. How does a person justify that his/her decision may result in death of some unknown person?

In the report it is mentioned that decisions were taken on Reward versus Risk parameter. Risk was generally considered about reputation damage and legal fines. As before none of the bankers were personally held liable, the maximum negative repercussion is job loss. The legal fines are paid by investor money. Hence, job loss is hardly a penalty, when after a time, the person joins another bank or financial services company. The rationalization given by bankers to self, I assume, is that the million dollar salary and bonus is worth the risk of death of someone else. Ruining life and happiness of some people, causing fear and terror in their life, does not appear in the Reward-Risk analysis. Can one be successful and happy when standing on the graves of innocent people?

The world is asking why do bankers take these decisions? Even after the financial crises, which caused so much suffering and pain to the general public due to job losses, retirement savings loss, and home losses, why do bankers persist in taking these decisions? Why don’t they change and take socially responsible decisions?

Though I am not a psychologist, my guess is two main feelings – cynicism and fear – makes them behave so. With +15 years of working in the financial industry, I know how easy it is to lose one’s idealism. With the whole society running after money, bankers see the worst behavior. They are surrounded with unknown people, friends, relatives, customers, suppliers etc. who all compromise a little bit of their ethics to get the deal, the loan, and better terms and conditions. When a person is dealing with large amount of money, the person witnesses greed of others every minute. It just seeps through the psychology, and greed becomes the paramount emotion.

Viktor Emil Frankl, world renowned psychologist and survivor of the Nazi camp gave an interesting metaphor on idealism and ethics. He mentioned that when we fly a plane from A to B destination, we do not follow a straight line due to the cross wind. So when we fly East to West, we fly at an angle towards North. The wind pushes the plane down and we reach the Western point of our destination.

Similarly in life, if we take a practical decision to operate on a straight line, the negative influences push us down to make unethical decisions. When we get cynical, and say “the society is doing negative behavior so why not me” ,we have already compromised on following the straight line. Our behavior falls below the straight line. However, if we manage to keep our idealism, we aim for higher ethical behavior. With all the negative influences in life, we then just about manage to live an ethical life. Hence, idealism actually motivates us to live an ethical life.

The next point is fear. Why do I think bankers are fearful and that is why they take these decisions? They are living a life which amounts to nothing. It is just money, more money and more money. Money buys comfort and luxury, it cannot buy self-respect and self-esteem.

Human consciousness is such that sometimes consciously we can fool ourselves. We think we know ourselves, but we at a conscious level don’t know ourselves, it is others who understand our behavior better. Hence, feedback from people is required for us to monitor our behavior. However, the more money and power one has, the lessor is the possibility of receiving honest negative feedback. Therefore, a senior manager’s moral compass at a conscious level can become distorted and he/she will remain completely unaware of the same.

At an unconscious level, our brain processes more information and keeps analyzing our actions, behavior and thoughts. We cannot fool ourselves at an unconscious level. The regulator inside us monitors our self-esteem. The right decisions and deeds deep down add to our self-esteem and self-respect. While our negative thoughts and actions erode the same. We compensate the lower self-esteem at an unconscious level, with a bigger ego at a conscious level.

The dilemma of maintaining ego to protect a low esteem causes irrational fear of loss. If internally we feel hollow, then fear of losing the external trappings is higher. Reason is simple, because the trappings is all the person has got. The pressure to maintain the facade is so huge, that it scares the shit out of people if they think they are going to lose it. Hence, fear drives the person to get more and more of the same trappings that they are familiar with and allows them to breathe in their comfort zone. Sometimes, it is sheer terror of losing it all that makes them sink deeper and deeper in the mud instead of breaking the mold for a better life. This reduces the possibility of bringing about a change in behavior. They can’t let go.

Closing Thoughts

Compliance officers gave excuses that their department was under-staffed or business teams over-rode their decisions. These cannot be considered justifications for failing to perform core functions especially when the transactions relate to drug money or terrorist funding. Both internal officers or external regulators, need to be far more vigilant in ensuring that the world is safe place to live.

For bankers it is a wake up call. They need to decide for themselves, whether they want to live in fear of losing everything, maybe going to prison, or adopt a more ethical life for their own happiness and safety. Going downhill is always easier than climbing uphill.

Lessons From Olympics for GRC Professionals

The London 2012 Olympics opening ceremony will be remembered for the Queen’s act of Bond girl. While reflecting on Olympics, I realized that risk managers, compliance and ethics officers can learn a few lessons from it. I know, most of us are watching the games and hoping our country’s athletes win a few medals. But just take a look at these points, and think whether they apply to your role.

1. Planning & Execution

Olympics are remembered for the awesome opening and closing ceremonies. The games run smoothly without a hitch for two weeks with thousands of athletes participating. The grand scale of the game requires years of preparation. Organization committees plan and implement each detail, and synchronize all cogs in the wheel. The stadiums are developed, the ceremonies are rehearsed several times, traffic planning is done in advance, etc.  Different teams collectively dedicate themselves to ensure a spectacular performance.

Risk managers, compliance and ethics officers, fraud investigators and internal auditors sometimes tend to work in silos to protect their own turf. Additionally they make annual plans and most do not have a 3 to 5 years plan. To build an ethics culture and/or risk culture, the foundation has to be laid and each brick put in its place to deal with the present day complexities of the business environment. Hence, organizations will give a spectacular performance only with the long-term planning and hard work of the risk teams.

2. Coaching & Training

Athletes train for years to become national and international champions. Their coaches train and guide them continuously to improve their performance. GRC professionals have two takeaways from this. First, to dedicate themselves to learning continuously. Risk management is a dynamic field, with new risks emerging everyday. GRC professionals cannot rest on their laurels and must learn new disciplines.

The second aspect is from business teams perspective. Ethics or risk management training isn’t a one time job. Psychologists state that once the moral compass shifts downward, a person starts losing moral judgment on most things in life.  Business teams must be trained and coached regularly to stay ethical and effectively manage risks. When athletes need so much physical training to win, business managers require an equivalent amount of moral training to operate effectively.

3. Importance of Fair Play

Britishers coined the term “fair play” and its importance in sports is such that all athletes, coaches and referees take an oath to play by the rules. Breaking of the rules is severely punished and dopers are banned.

On the other hand, the recent scandals of the corporate world show that the value of fair play is lost. The reports are damaging; clearly indicating that all rules and laws were disregarded to make money, achieve targets and get the upper hand. It is tragic that corporate citizens believe that nice guys finish last. Ethics officers must inculcate a sense of fair play within the corporate culture. Performance must be measured on merit and skills,  and not on capability for foul play.

Closing thoughts

The games reflect the changing times. For instance, China and US are competing for the top slot. In the last century, the developed world took the top three slots and the BRICS were hardly a group to be reckoned with. However, now they win a significant portion of the medals.

In this Olympics, gender equality took center stage. It is the first time in Olympic history that each country has a woman athlete and 49% of the total athletes are women. It is an amazing change, because when Olympics started women weren’t allowed to participate. Simultaneously, the growing power of women was reflected in the corporate world. A CEO and a pregnant woman were two mutually exclusive terms. Marissa Mayers appointment as CEO of Yahoo showed that a woman can be both.

Watch the games and let us hope the better sportsperson wins.

Parts of this post were selected by Company Secretary magazine (US) for posting in their article Olympics coverage: earning a gold medal in ethics” on 3 August 2012.

Lessons from Rajat Gupta’s Downfall

When I started my career, Rajat Gupta was an icon. Indian Gen X wanted to achieve his heights. He made us realize that Indian professionals can compete in the global arena and win. Now with his name tarnished with insider trading charges, every professional would be thinking – we don’t want to follow his path. The fall is always the hardest from the top floor of the building, not the ground floor. Whatever he built in his lifetime, today lies in shambles. His family is going to pay a heavy price for his wrong-doing. He has from being a case study on “what to do to fulfill your career dream” has become a study for “what not to do in your career”. I feel sad to say this, but here are some lessons all of us can learn from his downfall.

1. Poverty is in the mind and not in the bank balance – JP Morgan Chase estimated Gupta’s net-worth as US $ 130 million but as Rajaratnam joked – “Gupta wanted to be in the billionaires club“. Gupta’s greed got him down as he was unable to draw the line for his wants.

2. Don’t break the rules to get ahead – Gupta as ex-head of McKinsey knew he was duty bound to maintain confidentiality of boardroom information. He traded confidential information to meet his own personal targets. A McKinsey executive said – “It is mind-blowing that the guy who ran the firm for so many years could be going to jail for violating that principle.”

3. Choose friends carefully – That’s what parents say to kids but we forget it in our adult life. Gupta befriended  Rajaratnam, and though one cannot say he lacked judgment, he did manage to rationalize wrong-doing to keep the friendship alive. He got enamored by the Rajaratnam’s lifestyle. Relationship with  Rajaratnam, who had a dubious reputation, led him astray.

4. Keep feet firmly on the groundIdeas of invincibility and grandiosity lead to delusional thinking. Rajat Gupta was fined by SEC for insider trading. Instead of paying the fine, he chose to pursue the case legally. With the indictment, he is facing over 10 years of prison sentence. He took the decision to challenge SEC due to over-confidence and arrogance.

5.  Correct wrong-doing immediately – A person walking an unethical path rationalizes that s/he will get away with it, if they aren’t caught the first time. Gupta after doing insider trading for a few times got comfortable in his role. Mr. Naftalis said -“Having lived a lifetime of honesty and integrity, he didn’t turn into a criminal in the seventh decade of an otherwise praiseworthy life.” Gupta lost his principles over a time. He didn’t stop when he should have and didn’t take any corrective actions.

6. No one is above law – With the well-known figures in India and international arena facing trails and convictions, it is apparent that no one can escape the hands of justice. Sooner or later, the path will lead to a prison sentence. Being ethical pays in the long-run by keeping a person safe.

7. Protect your legacy – Rajat Gupta had an impeccable reputation of a world-class professional and a great humanitarian. His list of good deeds is long and was known as an exemplary citizen of the world. With these charges, he leaves a legacy of a criminal. A journey from  the boardrooms to a prison cell. There can’t be a greater tragedy on the professional field.

Closing thoughts

It is heartbreaking to find that our heroes have feet of clay. Gupta traded a comfortable old age with a prison cell for satisfying his insatiable hunger for power and money. An extremely intelligent man, an alumni of IIT and Harvard, failed to make the right ethical choices.  In the end, Robert Gilbert’s quote comes to mind –

“Conquer your bad habits or they will conquer you.” 


Rajat Gupta Convicted of Insider Trading

Culture and Communication Risks

The two things bringing a cultural revolution globally are – recession and social media. Both nations and organizations are struggling to adapt to the changes required in mindset and behavior. Recession has ensured that the fittest corporate citizens are those who can operate globally, work where the demand is, and compete at a global level with the cheapest resources. Social media has connected everybody and everyone is accessible on the same platform. A CEO  is just a tweet away from Gen Y fresh graduate. The layers of authority and distance are diminishing. The organizations and employees that adapt to the cultural change quickly will thrive in the next few years.

Therefore, the need of the hour is to become a global employee with a capability to understand cultures of at least a few of the countries with high Gross Domestic Product – US, France, UK, Japan, Germany from the developed countries and Brazil, China, India, Mexico, South Africa and Russia from the emerging markets. Multinationals are trading with these countries and/or have offices in these countries.This cannot be taken lightly. The graph below from the Economist Intelligence report “Competing Across Borders” will help you understand the impact of cross-cultural communication.

About one-third of the respondents stated that profits, revenue and market share improved significantly with better communication. To counter the cross border communication challenges, organizations are focusing on providing cultural, linguistic and conflict resolution training. However, there is no simple solution. Though training might help, it gives a current scenario. Psychologists Dov Cohen and Richard Nisbett, conducted experiments to assess the probability of entering into disputes depending on the cultural background. They realized that current behavior of a person is influenced by history of couple of centuries. Where the person is coming from matters. Typically, a warrior class, such as Sikhs and Gorkhas in India, are going to be more aggressive in organizations. As leaders and employees both bring their personal values while at work, the corporate culture changes on the basis on the position and number of people  of a community.

Though this experiment raises questions on whether any individual can truly become a global citizen, it is a critical requirement. Disputes are caused due to cultural and linguistic differences as shown in the adjoining graph. Insufficient clarity in communication can cause major disasters, especially when bounded by cultural protocol. Malcolm Gladwell in his book “Outliers – The Story of Success” gave example of Korean Air. The airiline, Korean Air, during 1988 to 1998, had a loss rate of 4.79 per million departures. In comparison, American carrier United Airlines, for the same period had a loss rate of o.27 per million departures. That is, Korean Air was having 17 times higher loss rate than the American airline. It had 8 airplane crashes in the period.

The reason attributed for most of plane crashes was “unclear communication” and not plane defects or pilot inexperience. The Korean culture has high power distance index and the flight officers were unable to plainly tell their captains that they were flying on the wrong route, were out of fuel or weather was bad. Can you believe it, due to the respect and deference flight officers showed to their captains and officers in air traffic control rooms, over a thousand passengers lost their lives? Instead of taking control of the plane they chose to show reverence!

Another amazing fact mentioned in the book is that more planes crash when the captain is the pilot, rather than when flight officers are flying. Simply because when flight officers are doing something wrong, the captains due to their position of authority, do not hesitate to call out the mistake. On the other hand, flight officers chose diplomatic responses which have a higher probability of misinterpretation as severity of the situation is not conveyed clearly. Korean Air recovered and became a safe airline, after they trained all captains and flight officers on speaking clearly and plainly in English while flying, among themselves and the air traffic control rooms.

Looking from another lens, employees are less likely to highlight risks to seniors in countries and organizations with authoritarian cultures. Juniors may hesitate to paint the full picture explicitly for senior managers to understand high risk situations, and crises would occur without proper risk mitigation. Risk managers and crises managers need to be taught the art of clearly communicating concerns and issues.

Closing thoughts

English has become a global language, but without taking the cultural context it doesn’t make sense to a reader from another country. For instance, take a look at the blogs of  Americans, British, Australians and Indians, all are writing English but very differently. Just by reading the blog post, one can identify the country of the blogger. Hence, with increasing complexity in business, the nuances of communication become more important. Communication failure can cause disastrous consequences. When I am flying, I would prefer that the flight officer says to the captain – “Buddy, we are flying on the wrong course.”


  1. Competing Across Borders – Economist Intelligence Unit
  2. Outliers – The Story of Success – Malcolm Gladwell