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2020 Ipm 18 / Yl 2018 INSIGHTSIAS MAINS TEST SERIES - 2020 IPM 18 / YL 2018: GS – 4: Synopsis SECTION-A 1. Differentiate between the following: a. Probity and integrity Integrity is defined as the moral uprightness and firm adherence to the morals and values we subscribe for. Probity is an indication of incorruptibility and ethical behavior that involves honesty, propriety, integrity and decency underpinned by higher standards of professionalism. Both terms are not only used together but are even interchanged. But the use of the two words will entirely change the meaning of what is being said. Integrity is the voluntary adherence to morals and ethical values, it means the rock soild capacity to not give up our standards at any cost. Hence it is voluntary. Probity is not voluntary, it is enforced. There exists a mechanism which ensures probity and ethical behavior under such condition is called probity. Integrity is related to personal sphere of the life whereas probity is about professional sphere of life. Eg. An honest civil servant might practice probity in public life but might not be so in personal life. Like engaging in adultery Integrity is perceived by ourselves whereas probity is perceived by others. Probity is monitored, integrity is self-assessed and mostly not assessed at all. Integrity is realized in public services by recruiting right people eg. Integrity tests, whereas probity needs enforceable mechanisms like: Code of ethics, Code of conduct, Annual Review, Social audit, etc., No code is of utility if the heart is impure, it is hard to achieve probity in a person without integrity. Hence, probity has limited capacity to be realized in comparison with integrity. b. Good governance and ethical governance Governance is the manner in which power is used by the government in management of public affairs. Good governance is a concept that emerged from an understanding that presence of government by itself will not promote common good rather the manner of using power by gornment should be proper, reasonable, shortly good. A governance is considerd to be good if it is, 1. Accountable 2. Transparent 3. Responsive 4. Evidence based 5. Bound by rule of law, etc., Good governance is a concept given by World Bank to ensure governance is inclusive and democratic. Ethical governance is a related term but it is more sophisticated than good governance. In ethical governance, the power-holders are expected to be ethical and the intentions of governance is expected to be ethical. The way of governance is to be guided by a code of ethics, not just code of conduct. Simply ethical governance denotes the administrative procedures and rules, that are based on principles of righteousness. Some cases of ethical governance are: a. Governance by Dhamma by King Ashoka b. Buddhist doctrine of involving Sangha in governance for bringing ethics into politics c. Gandhiji’s idea of spiritualization of politics Some instances where in independent India we saw ethical governance include: a. Tenure of T N Seshan as Election Commissioner—Honest is my best policy he claimed, b. Recently DM of Gopalganj district ate the Mid Day Meal cooked by a dalit cook when the village upper caste parents disallowed their children from consuming food cooked by Dalits. Thus ethical governance aims at righteousness and good governance aims at welfare. The difference is wider. Also, while good governance can be seen to put into life often, ethical governance largely remains as a benchmark, a utopia! c. Code of ethics and code of conduct Code of Ethics is a document issued by the top-level management, which consist of a set of principles, designed to guide the members of the organisation to carry out business honestly and with integrity. It describes the core values of the organisation that guides the decision-making. It provides ethical standards which are to be followed by the members. It sets out general guidelines to assist individuals to apply their judgment, concerning a suitable behaviour in a given situation. Ex: Code of Ethics for Judges in Public Life (1999) of India Code of Conduct is a document that expresses the practices and behaviour of a person, required or restricted as a condition for becoming a member of the organisation or profession. The code sets out the actual rules, so it lays down the do’s and doesn’t s of an employee. The members are responsible for its adherence and held accountable for its violation. Ex: All India Services (Conduct) Rules 1968. The crucial differences between the two are: https://t.me/UPSC_PDF Download From > https://upscpdf.com https://t.me/UPSC_PDF a. Code of Ethics is an aspirational document, issued by the board of directors containing core ethical values, principles and ideals of the organisation. Code of Conduct is a directional document containing specific practices and behaviour that are followed or restricted under the organization. b. Code of Ethics is general is general in nature, whereas code of conduct is specific c. Code of Conduct are originated from the code of ethics, and it converts the rules into specific guidelines, that must be followed by the members of the organisation d. Lengthwise, code of ethics is a shorter document than a code of conduct e. Code of Ethics regulates the judgment of the organisation while a code of conduct regulates the actions f. Code of Ethics is publicly available, i.e. anyone can access it. Conversely, Code of Conduct is addressed to employees only g. Code of Ethics focuses on values or principles. On the other hand, Code of Conduct is focused on compliance and rules. Understanding the nuanced differences between the two is crucial because many organisations have adopved code of conduct alone on the assumption that it would serve purpose of code of ethics also. For instance, while India has code of conduct for civil servants, there is no code of ethics for them. 2. What are the manners in which public values and organizational values can come into conflict in a private organization? Examine. A private organization can be a for profit or not-for-profit organization but essentially non- governmental. However, every entity of a society from an individual to a larger corporate group there are ethical norms of conduct that wants the organization to not only follow its own organizational values, but also the public values. Organizational values are those mentioned in the vision and mission statement of a company eg. Business leader or customer-friendliness, etc. public values are the values that are central to the social interests eg. Sustainable development. But in many ways the two domains can come into conflict. A successful organization should uphold public values apart from its own values because the ultimate performance, its relation with society and state are finally determined by a combination of both. Some companies like TATA have adopted even the public values as organizational values. The different manner in which conflict could happen includes: 1. LEGALITY—the most instances in which a private organisation violates public value is by violating the laws. It may include violating tax laws, corporate laws, Essential Commodities Act, etc., For own profit motive a company can violate law. 2. ENVIRONMNTAL ETHICS—may be jeopardized for commercial interests eg. softdrinks companies exploiting ground water 3. MERIT vs SOCIAL JUSTICE—in private organisations, efficiency is given priority and so expertise of the employee becomes primary. Thus, there could be very low representation of SCs, Sts, women, etc. Google it:- https://upscpdf.com https://t.me/UPSC_PDF Download From > https://upscpdf.com https://t.me/UPSC_PDF 4. BRAND IMAGE VS PUBLIC INTEREST—to improve the brand image companies can go for advertisements that are against public interest eg. fake promises on hair growth in shampoo ads, fake claims of natural ingredients being used in a chemical product, etc., 5. COMPETITION—for purpose of competition a company can go for monopoly and that would impact the survival of entire field. Eg. Predatory pricing of JiO and its harmful effects on telecom industry Thus the main conflict areas are: a. Natural resource degradation b. Corruption c. Social justice d. Rule of law e. Consumer interests. It is necessary that public values are not given secondary importance in private organisation. Each such organisation should have a talisman in its policy and should not commit any of the seven sins enunciated by Gandhiji. 3. Who are minority shareholders in corporate sector? What principles should be followed to uphold their interests? Explain. A minority shareholder is one whose share value is miniscule of the overall share value of the company and it would be considered negligible in comparison with bulk of shares held by select few like angel investors or promoters or anchor investors. A minority shareholder is a person in a company who does not enjoy much power in the management of the company and their interests are disregarded. For these reasons corporate governance standards are evolved to specially meet their needs. PRINCIPLES TO BE FOLLOWED: A. Representation—Section 151 of the new Companies Act 2013 mandates, there should be a director elected purely by small shareholders who will represent them in BoD. B. Participatory decision making, involving minority shareholders in decision making of the corporate: - Democratic—while in day to day administration large shareholders take decisions, in crucial decisions minority shareholders should be involved. Eg. Section 395 of 2013 Act mandates their involvement in transfer of the ownership of company - The tool of e-Voting can also be used to enable their participation - Consultative decisions by consulting consortium of minority shareholders C. Accountability—independent directors needs to be appointed who ensure the large shareholders and directors are held responsible which is not possible for minority holders by themselves D.
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