By KS Nayar
A friend, regular visitor to a spiritual leader, asked the holy man what was the most essential leadership quality needed to run successful companies. He replied that it’s a commitment to ‘be good and do good.’
I thought it was a frivolous observation and metaphysical mumbo-jumbo. It’s easy to say but difficult to practice, particularly in a highly-competitive corporate environment where profit is the only concern.
But recent studies show that spirituality in corporate governance is vitally important in building visionary leaders and competitive firms. Company balance-sheet alone is not a determinant in measuring corporate success.
It’s reckoned that spirituality of leadership cannot be ignored in company valuation. It is as important as CEO’s intelligent or emotional quotient. Spiritual quotient is no New Age spiritual abracadabra.
When one looks at iconic companies that collapsed in the recent past, one realises that they all crumbled because of their leadership’s moral and ethical bankruptcy. Some legendary CEOs adored by investors had turned out to be bereft of morality. Their command-and-control leadership – the phenomenon of the New Economy of 1990s –lacked spiritual bearings.
Many talented leaders had to go to jail or face punishment for their avarice. India’s Satyam Computer’s founder Ramalinga Raju was jailed after admitting to the country’s biggest embezzlement worth US$1.5 billion. Whether it’s Bernie Madoff, Enron’s Kenneth Lay or Jeffrey Skilling, Tyco’s Dennis Kozlowski, WorldCom’s Bernie Ebbers, HP’s Mark Hurd, and heads of Arthur Anderson, Lehman Brothers or many other noteworthy corporate honchos, they all had to bow out of office in disgrace amid the rubble of their scandal-devastated companies.
Investors and market analysts had watched stratospheric salaries soar along with liberal stock options for CEOs who ‘seemed’ to deliver high profits. But some of these leaders, it was later discovered, had fudged accounts or hidden wrong-doings.
Rating agencies and market analysts, who keep hawk-eyes on corporate leaders, had overlooked their misdemeanours. They got blinded by the aura of ‘success’ of these corporate czars and their soaring careers. The fact was that the market had failed to separate the chaff from the wheat.
(Full Text in PTA Feb/March issue)