Business Ethics

TRUSTEESHIP MANAGEMENT
Gandhian Philosophy of Wealth Management


Trusteeship, as applicable to the corporate world,
refers to the act of holding and managing resources
on behalf of the stakeholders of the firm.



According to the Gandhian Concept of Trusteeship,
"All business firms must work like a Trust."
All assets of the firm must be held by a 'trust'
and must be used for the welfare of the
society. The firm must keep only a small part
of its profits for the honourable livelihood of
its owners. The remaining part of the profit
must be distributed equitably to all sections of
society.



Mahatma Gandhi's Concepts and Quotations

Mahatma Gandhi was influenced by Ancient Indian
Philosophy and teachings of holy Bhagavad Gita.
Gandhiji gave importance to following two concepts :-
Aparigraha i.e. Non-Possession.
Sambhawa i.e. Equitable Distribution.
Gandhiji also gave importance to following two quotations :-
"Enjoy the wealth by renouncing it."
"Excel in your work, produce wealth, take the minimum which
you need, leave the rest to the welfare of the community."


TRUSTEESHIP MANAGEMENT
Gandhian Philosophy of Wealth Management

Gandhian Philosophy of wealth management is based on the Servodaya
principles of Truth, Non-Violence and Trusteeship; wherein class harmony
between labour and management reigns supreme.

According to Gandhiji, managers and proprietors of business firms are only the
trustees of wealth of society.

Unlike the Utilitarian motto of greatest good of the greatest number known as
Teleology, Gandhijis motto was greatest good of all.

Principles of Trusteeship

Gandhian Principles of Trusteeship are discussed in following main points :-
Reduce Inequalities : This concept tries to reduce inequalities. It tries to
reduce the gap between the rich and poor. It tries to reduce exploitation.
Change of Attitude of Businessmen : According to Mahatma Gandhi,
businessmen should change their attitude. They have no morale right to
accumulate unlimited wealth while most of their countrymen live in
poverty and misery. Each businessman should take enough wealth to live
honourably. He should distribute the remaining wealth back to the society.
Gandhiji advised the rich businessmen to voluntarily surrender their surplus
wealth. If not done so, the poor masses may revolt (fight) one day and
plunder their entire wealth by force.


Social Pressure : People must put social pressure on
businessmen to follow the principle of trusteeship. They
should boycott (not purchase) the products of those who do not
practice trusteeship.
Legal Pressure : If voluntary measures and social pressure do
not work, legal pressure must be put on the businessmen to
follow the principle of trusteeship.
Socialism : This concept gives more importance to socialism.
That is, the society is given much more importance than an
individual. So, the wealth of the society should be distributed
equitably to all its members.

Consider Social Needs : Businessmen should produce only those goods
and services which are useful for all members of the society. They should
not produce goods and services, which are used only by few individuals.
Equal distribution of wealth : According to Gandhiji, all the wealth of the
society should be distributed equitably. There should not be concentration
of wealth in few hands.
Earn money by Hard work : A person should earn his living by doing
hard work. Earning money without doing hard work is just like stealing.
No Right to Private Ownership : This concept does not give the right to
private ownership except when it is necessary.
Government Regulation : The Government should regulate trusteeship.
No Individual should be allowed to use his wealth for selfish satisfaction or
against the interest of society.


Limitations of Principles of Trusteeship
This concept is not relevant in today's competitive business world because
every businessman tries to earn maximum profits and accumulate huge
wealth.
It demotivates the hardworking businessmen. The businessmen will loss
their creativity, and they will become lazy. This will slow down the
economic development of the country.
This concept is based on the concept of Socialism. However, today
socialism is outdated.
Businessmen feel that the welfare of the society is not their responsibility. It
is the responsibility of the Government.

Limitations of Principles of Trusteeship
This concept is not accepted by shareholders who invest their
money to earn the highest dividend.
This concept is against capitalism. Today, capitalism is proving
very successful all over the world. Poverty levels are very low
in capitalist countries when compared to the poverty statistics
of socialist nations.


Gandhijis principle of Trusteeship
Trusteeship principle is foundation of philosophy of
wealth management

Principles of Trusteeship
No recognition to right to individual property
Resources must be held and utilised for the benefit of society.
Management is the trustees of the stakeholders and must work
towards optimising stakeholder value, not merely maximising
shareholder value

Gandhijis principle of Trusteeship
In case of industrialist what they produce should be
determine by social necessity with optimal utilization of
scarce resources and not by personal whims

If workers are to work with harmony and collaboration with
management then that make workers also co-trustee with the
management

Though wealth legally belongs of owners of business, morally
belongs to society and community

Seven greatest Sins
Politics without principles
Education without character
Commerce without morality
Pleasure without conscience
Wealth without work
Science without humanity
Worship without sacrifice
Indian Corporate Leaders and Trusteeship
Infosys, particularly from its former CEO and current chief mentor, Narayana
Murthy for creating this company along with a small group of people (better
sharing of wealth in society), the involvement of employees in the
companys fortunes (through ESOPs) and his contentment with a mere 7%
of company stock (he prefers it that way) reflect a deep-rooted commitment
towards trusteeship.

House of the Tatas with their corporatised initiatives for socio-corporate
benefits

WIPRO Cares Foundation, with a targeted corpus of Rs 100 crore for
primary education;

Birla foundation with its focus on socio-economic improvement in the lives
of the people touched by the corporation.




Thank You