By M Muneer, Fortune-500 advisor, start-up investor, and co-founder of Medici Institute for Innovation
Corporate boardroom ethics is a bit like yoga in the C-suite: everyone swears by it, very few practise it properly, and most people treat it as a photo opportunity rather than a discipline.
There is no dearth of ethics manuals, thicker than the Bhagavad Gita, crafted by law firms that charge per comma and consultants who speak in spreadsheets. Directors are schooled at great length on the seven deadly sins of corporate life: fraud, insider trading, conflicts of interest, confidentiality breaches, self-dealing, market manipulation, and creative accounting that could make a Bollywood scriptwriter blush.
These presentations are usually delivered with solemn attitudes, accompanied by ominous case studies and a few slides showing jail bars. The message is clear: behave, or you might end up swapping your corner office for a corner cell.
This is all very useful. It is good to remind directors that ethics is not merely a suggestion, and that regulators, from Sebi to the MCA, are slowly becoming less forgiving than an annoyed mother-in-law. Yet this entire apparatus of governance training rests on a rather flimsy assumption: that if something is legal, it must be ethical.
Boards have become extraordinarily skilled at asking “Can we do this without going to jail?”, while being far less interested in asking “Should we do this without losing our soul?” In most Indian boardrooms, the real mantra is not “tone at the top” but “keep it just clean enough”.
Directors are reminded that they have two sacred duties—the duty of loyalty and the duty of care—which sounds lofty until you see how flexibly these are interpreted. In theory, loyalty means putting the company first. In practice, it means putting your network first while pretending it’s the company. Take procurement, a favourite playground of boardroom creativity. If a director openly pushes a contract towards a firm they own, even the most relaxed board will raise an eyebrow. But conflicts in India are rarely that crude.
What if the preferred vendor happens to be run by an old IIT batchmate? Or the MD’s golfing partner? Or a cousin who just coincidentally shifted from real estate to renewable energy last month? Technically clean. Socially convenient. Ethically… interesting.
In many boards, the unwritten rule seems to be: “It’s not a conflict if everyone benefits quietly.”
Then there is the delicate dance between loyalty and care when something smells rotten. Imagine management presenting financial data that is murky, inconsistent, and full of mysterious “adjustments”. A diligent board should dig in like a forensic auditor. Instead, many boards treat ambiguity as a feature, not a bug. If the numbers are confusing, they assume the problem must be too complex for them, rather than that someone might be cooking the books at a low flame.
Consider the spectacular governance meltdowns of recent years: telecom scandals, bank frauds, shadow lending disasters, and infrastructure companies that collapsed faster than poorly built flyovers. In many of these cases, boards were not absent but simply dazzled, distracted, or diplomatically asleep. In too many cases, boards were not victims of ignorance; they were beneficiaries of wilful blindness.
This is why board ethics cannot be reduced to glossy codes of conduct. Every company now proudly declares that it is committed to transparency, sustainability, and stakeholder capitalism… usually in reports that look like luxury coffee-table books. But the real ethical test comes when a decision is legal but deeply questionable. Can the board approve aggressive tax avoidance that leaves the public exchequer poorer? Can it sign off on layoffs while awarding itself handsome bonuses? Can it greenwash environmental damage with slick marketing?
Many boards would say yes—and call it “fiduciary duty”.
But here’s the serious point: Employees, investors, and the public are not fools anymore. Young professionals do not worship corporate logos the way their parents did. Social media ensures reputational missteps travel faster than a political rumour in Delhi.
The most troubling habit of some boards is their reluctance to ask the hardest question of all: “What are we not being told?” In India, this question is often avoided because it threatens relationships. Challenging management can feel impolite. But politeness is not a fiduciary duty.
A truly ethical board doesn’t simply read what is placed before it like a passive audience at a corporate AGM. It interrogates, probes, and occasionally irritates. It treats power not as a perk, but as a responsibility.
Perhaps the best test of boardroom ethics is this: if tomorrow’s newspaper splashed your decision across the front page—with your photograph and your name—would you feel proud, embarrassed, or suddenly very interested in retiring?
In too many Indian boardrooms, the honest answer is the last one.
Until directors learn that governance is not just about avoiding jail but earning trust, corporate ethics will remain what it is today—a beautifully framed ideal hanging in a very crowded room, largely ignored by those sitting closest to it.