P Vijaya Bhaskar: Achieving professional excellence
Address by Mr P Vijaya Bhaskar, Executive Director of the Reserve Bank of India, at the
Silver Jubilee Function of Institute of Company Secretaries of India (ICSI), Mumbai, 15 June
2013.
* * *
I. Introduction
At the outset, I thank the organisers of the Silver Jubilee Function of Institute of Company
Secretaries of India (ICSI) for giving me an opportunity to share my thoughts on the very
topical subject of "Achieving Professional Excellence". A Silver Jubilee has a special
significance in the life of any institution as it signifies a coming of age and maturity. It's also a
time to look back and thank every person who has contributed.
II. "Profession" and "Excellence"
(a) Profession
Post the industrial revolution, there has been a knowledge explosion which led to an
exponential increase in the number of professions. In fact, we are living in exponential times.
The world's knowledge is increasing at exponential rates, as is our technology. In the history
of mankind, it is widely acknowledged that the explosion of knowledge in the last 200 years is
unprecedented. A profession, as we are all well aware, is an occupation especially one that
involves knowledge and training in a branch of advanced learning like your profession -
secretarial practice.
(b) Excellence
It is a truism that "Excellence is a journey not a destination". Pursuit of professional
excellence, as such, is a life long continuous journey. Such professional excellence is
essentially a subset of Human Excellence.
Bhagavad Gita talks about "Yogah Karmasu Kaushalam" - Yoga is excellence at work. This
verse advises us to perform our allocated duty in an excellent manner. Kaushalam signifies
doing work with devotion and without attachment. Such detached attitude enhances its
values and improves the concentration and skill of the individual concerned.
Swamy Vivekananda's golden words on Excellence, whose 150th birth anniversary we are
celebrating this year, are not only worth committing to memory by all of us but are worthy of
emulation, if we are serious enough, about achieving "Excellence" in our lives and
profession. He says - "In the little things that you do, un-observed by anybody else, if you
are excellent, then you are truly excellent. When people are watching and praising you and
you do well that is not the true test of excellence. Nobody is watching you, what you do in the
most private aspect of your life, there if you are excellent, you will be excellent everywhere."
Swamy Vivekananda has also talked about the essential ingredients for achieving Human
Excellence. He particularly emphasises on Atma Shraddha - Self-confidence i.e. having faith
in oneself - which brings out the best out of us and a sense of honour and self-respect. If we
work with such self-confidence, we put our heart and soul in whatever tasks we undertake.
It's only soulful work which becomes excellent. Wherever there is no sense of honour,
personal worth and dignity, one's work becomes sloppy and slipshod. Professionals need to
especially remember this all through. Following Atma Shraddha, the other ingredients for
achieving Human Excellence are knowledge, responsibility, love and concern for others, as
expounded by Swamy Vivekananda.
III. Other essentials of human excellence
At a technical level, human excellence is achieved when there is a harmonious blend of
Intelligence, Emotional and Spiritual Quotients (IQ, EQ and SQ respectively).
IQ represents material capital reflected in rational intelligence and concerned about "What I
think"?
EQ represents social capital reflected in emotional intelligence and concerned about "What I
feel"? The level of EQ determines how one handles relationships. In a profession, EQ is most
important because it's all about handling relationships with one's clients, peers, professional
associations, regulators and the society around.
SQ represents spiritual capital reflected in spiritual intelligence and concerned about "What I
am"?
Physiologically, left brain is used for IQ (thinking - serial processing) while right brain is used
for EQ (feeling - parallel processing). Given its expansive and all encompassing nature, the
whole brain is pressed into service for SQ (about "being" - synchronous processing).
The above can also be grouped as hard and soft skills. As a general rule, hard skills are
relatively easy to acquire; while soft skills are hard to come by.
In other words, Human Excellence calls for qualities of both the head and the heart.
IV. Essentials of professional excellence
Knowledge, skills and management of conflicts of interest are the three most essential
ingredients of Professional Excellence. Professional Excellence predominantly calls for both
personal competence (How we manage ourselves!) and social competence (How we
manage relationships!).
(a) Knowledge - on the knowledge front, adequate care is being
taken, particularly by professional bodies such as yours. A set of standard syllabii,
periodically revised to take care of the new developments, minimum criteria for acquiring the
professional degree and the ongoing Continuous Education Programme to avoid practicing
professionals from becoming stale, as also compulsions of competition from other allied
professions ensure that knowledge levels are reasonably taken care of, on a continuous
basis.
(b) Skills - both hard and soft skills have an overwhelming bearing
on Professional Excellence. Ensuring Knowledge levels is the easier part. Acquiring skills is
the more difficult part of the equation. Among skills, soft skills are of great significance
because, as I said earlier, as a general rule, relatively speaking, soft skills are hard to come
by; while hard skills are easy to acquire.
(c) Conflicts of interest management
What is conflict of interest (COI)? In the Code of Ethics of your Institute, a "Conflict of
Interest" has been defined as a situation wherein the interests/benefits of one person or
entity conflict with the interests/benefits of the institute.
They are situations in which an interest interferes, or has the potential to interfere, with a
person, organization or institution's ability to act in accordance with the interest of another
party, assuming that the person, organization or institution has a (legal, conventional or
fiduciary) obligation to do so. The interests which lead to conflicts may be pecuniary or
nonpecuniary, personal / social / other competing professional interests or human emotions of
greed / kinship or friendship / anger / hatred. Such conflicts may be actual or potential.
Conflict of interest, thus, fundamentally represents - a "Dharma Sankat" - an ethical
dilemma. Such conflicts are a part and parcel of one's existence, but the conflicts of interest
in the financial world have a special and particular lure because of huge financial benefits
involved in exploitation thereof.
All professionals - doctors, lawyers, engineers etc., including finance professionals,
generally, play a dual role i.e., that of being the principal and an agent to their customers, in
the discharge of their functions. Consequently, finance professionals jointly act as an agent
of the customer when they provide the diagnosis to their finance related problems and
consider the best remedial action therefor, besides acting as a principal in executing with the
customer the prescribed action. Mutatis mutandis, the same holds good for almost all
professional services. This inherent dual capacity, common to most professional services,
naturally gives rise to conflicts of interest in cases where the professional acting as an agent,
prescribes actions which he knows are to his own benefit as principal, rather than to the
customers. There is nothing special about financial services in this respect. Agency theory
(principal-agent relationship) offers a valuable lens for assessing, inter alia, conflicts of
interests.
Financial services come jointly under the category of "experience goods" and "credence
goods"; wherein, information is obtained by the consumers only during / after the services
have been purchased or, perhaps, may not be able to obtain the same even after
purchasing. In other words, the consumers will find it that much more difficult in obtaining
information about the quality of services offered by the finance professionals, due to the
inherent nature of financial services.
In such circumstances, exploitation of conflicts of interest by finance professionals due to the
classic "principal-agent" conflict, away from the glare of the public could lead to loss of trust
in the profession. As Walter Bagehot put it so elegantly, "One terra incognita seen to be
faulty; every other terra incognita will be suspected." The inevitable credibility contagion
catches on. All professionals, especially in the finance world should be very wary and
watchful to prevent such an eventuality. Otherwise, disastrous consequences would follow,
which would be difficult to tackle.
It is a matter of fact, which has repeatedly come to the fore that conflicts of interest cannot be
legislated / regulated away, despite having the best prescribed standards. Management of
conflict of interest calls for adherence to ethics and values. In fact, a value-oriented individual
is the cornerstone in the entire process of mitigation of interests. As famously said, "the
greatest conflicts are not between two people / institutions / nations, but between one person
and himself." Hence, ethical conduct should be developed, sustained and fostered in the
professional atmosphere through enabling legal, regulatory and institutional environment.
Management of conflicts of interest calls for a high degree of maturity and a sense of balance
and proportion. The reason is that conflicts of interest situations predominantly carry shades
of grey rather than being black and white.
Hence, above all, a sense of values and ethics is the very foundation to manage conflicts of
interest - "Dharma Sankat". Professionals with high knowledge and skills, but without values
and ethics, more often than not, could end up as disasters.
In other words, the framework for mitigating conflicting interests should be constructed
inside-out, from the core point of an individual's value-oriented personality to an outer layer of
enabling environment, through all possible means available to your profession. The conflict
mitigation process, at its absolute broadest, should strike a reasonable balance that helps
guard against present and future problems of conflicts of interest while preserving those traits
of your profession which are the source of its creative and competitive genius.
Sometimes, due to certain professional / personal problems or set-backs, one may not be
able to focus fully on one's profession. That is quite understandable, but the touchstone is as
to whether, over one's entire career, one has been able to constantly deliver to the highest
standards of professional excellence which is achieved through high levels of knowledge and
skills coupled with an unshakable sense of values and ethics. Another important aspect is
that the top professionals in high positions should be very measured in their talk and
behaviour, because they are looked upon as role models for the profession in particular and
the society in general.
(d) Conflicts of interest and finance professionals - an uneasy relationship
In contemporary times, especially since the onset of the present ongoing crisis in 2008,
among the professions - finance related professionals have been in the limelight due to all
the wrong reasons. In the period immediately prior to 2008, the continuous saga of financial
scandals involving high profile companies like Enron, Worldcom, Arthur Andersen, Tyco in
USA; Ahold, Parmalat in Europe, Citi bank's activities in Europe and Japan, BNP Paribas are
still fresh in one's memory. More recently, those involving J P Morgan, Standard Chartered,
HSBC in the international arena serve as examples. The recent episodes of proven
transgressions by some of our banks also raise concerns and highlight the critical role of
ethics in business. In all these cases, expert observers have concluded that the role of the
finance professionals and, more importantly, their exploitation of conflicts of interests as
being at or near the centre of such scandal-driven financial storms.
Conflicts of interest, of late, have reappeared in our public discourse. It is alleged that, we in
India, are not appreciative enough of the world of Conflicts of Interests. It is also argued that
we do not appreciate the separation of roles and responsibilities of our private and public
lives; and that we freely mix both together for our gains. It is further said that for us, there is
no conflicts of interests and it is only maximisation or juggling of interests, etc.
In such a milieu, there is an onerous responsibility on professional bodies like yours. You
need to adequately demonstrate that you are not only aware of such situations but are doing
everything at your command to ensure that your members are indeed "Walking the talk!"
ICSI's code of conduct
A look at the Institute's code of conduct available on the website reveals that the two most
important principles of professional excellence viz., management of conflicts of interest and
adherence to ethics & values have been alluded to, but perhaps need to be elaborated,
against the backdrop of the above. Further, adequate training in this regard to all the
members is an imperative. This is the paramount need of the hour for all professional bodies,
especially the ones related to the financial world.
Summing up
Let me conclude by recapitulating what I have tried to put forth in front of you. I started off by
briefly defining and describing the two important words of profession and excellence.
Thereafter, I highlighted the generic principles of human excellence and derived the
principles of professional excellence therefrom. As stated, hard skills are relatively easy while
soft skills, by and large, are hard to develop. To effectively play the dual role of both the
principal and agent of one's customers, while all along maintaining a sense of ethics and
values is a feat which is akin to walking on a razor's edge. I am sure, your Institute will
resolve in the Silver Jubilee year to throw light on a path which would enable all the
professionals of your Institute to walk the razor's edge continuously and consistently without
any slip up.
I wish ICSI Good Luck and God's Grace in its race for celebrating the oncoming Golden
Jubilee.
Thank You.