Compliance as a Way of Life!

As my alma mater #ICSI celebrates its 55th Foundation Day on 4th October, 2023 at Vigyan Bhavan, New Delhi in the august presence of three eminent women – the Hon’ble President Smt. Droupadi Murmu, Hon’ble Finance Minister Smt. Nirmala Sitharaman and Revered Sister B K Shivani, I dedicate this piece to both – the Corporates (who say “Compliance in our business”) and Compliance Professionals (who say “Compliance is our business”)! 

Credit for this catchy phrase goes to one of my earliest clients, Mr. Naveen Kashyap, erstwhile MD of Yokogawa Technology Solutions India, now elevated to an international role as VP-Digital Innovation & Services, Yokogawa Electric, Japan. With a technology-cum-management-cum-sanatana dharma background, he is a rare leader who values compliance equally and advocates its complete adherence in letter and spirit. Here is a gist of his brilliant address to business leaders and professionals, gathered over high-tea at my office recently, as we moved into a newly renovated, vibrant space :

• What does compliance mean to you? ….Discipline? Ethics? Rules? Peace of mind? How about ‘Societal Dharma’ ? Comply with the law of land. Respect the law of land. To me “Compliance is an indicator of a company’s righteousness.  A Company’s integrity. A Company’s discipline”. Ultimately when we talk about leaders, we talk about their humility, their discipline, courage to stand tall. So when we apply the same parameters to what makes leaders in a corporate, we come back to Discipline, Integrity and Righteousness.
• Compliance is like a torch or a guideline that ensures we don’t tread onto the wrong path. Shri Krishna says in the Bhagavad Gita, Sankhya Yoga “Swalpamapyasya karmasya, traayate mahato bhayaat”. “Compliance is that element, doing a little bit of which you are actually going to be saved from a larger disaster or a larger concern”. 
• Then he also says in the Karma Yoga, “Niyatam kuru karma twam karmajyaayo hya karmanaha” “Keep doing the work honestly and sincerely, irrespective of the outcomes”. It is not always someone telling you what is right or wrong….you should be knowing what is right or wrong. So Compliance defines our conduct as corporates. Compliance defines our identity as corporates. 
• Where does this evolve from? The earliest and simplest form of definition around compliance what I actually draw from the Taittareeya Upanishad from Yajur veda shaka, particularly the Shiksha valli is “Satyam vada, Dharmam chara”. “Speak the truth, follow your dharma”. (Incidentally the motto of ICSI is this !) It could be your societal dharma, it could be your personal dharma. Don’t swerve away from this route of satya and dharma. 
• Ultimately when we look for the context, Upanishad is nothing but a convocation speech that is given to the students on completing their course at the Gurukula, to let them go and start  contributing to the society. I would like to take the last three points of Shiksha valli which are a set of guidelines on how we are expected to lead our lives. Finally they say “Eshaha  aadeshaha (this is a rule), e tat upadeshaha (I advise you),  e tat anushaasanam (follow the advice)”.  It says there is a rule…your MCA says there is a regulation which will come up as a notice. Next thing is a gentle reminder which tells you…follow this updadesham. This has to be a non-comprisable rule when you move ahead. So when we try to go back to the roots of compliance, that would have definitely originated in the context of dharma we have inherited and need to practice. Somehow the very integrated portion of that has got disintegrated and we see compliance as a separate element ! But otherwise it is nothing but righteousness i.e. righteous life which contributes to the overall propserity. 
• If we all know these basics, why don’t we comply? What is the general tendency? #1 Ignorance. about changing rules. Ignorance is bliss sometimes. #2 Arrogance. How would I be affected at all? How would I be caught? Who are they to catch hold of me? I can outsmart them. #3 Wrong logic in interpretation. Wrong use of the right logic. Our ability to outsmart somebody and try to be creative in compliance, while compliance is just to follow and not try to innovate. #4 Abuse of the smart logic. Many times we try to interpret and justify our wrong deeds and actions while applying logic without looking into the context. 
• The last part of it is Window Dressing. I project myself to be compliant while I am not. A small story here…….A teacher gives 2 chaklis (south indian savoury) to all the children in a class and says, “Don’t eat them. If both the chaklis are in your hand till the end, I will give you two more”. He wanted to measure their honesty and sincerity. Some kids saw this as a long term incentive and not worth it. They ate both immediately, while another set of kids ate one and retained the other. There was only one boy who had eaten the chaklis and yet had them both in his hand. The teacher was happy with his behaviour and rewarded him with two more, as promised. Surprised that he didn’t succumb to temptation, all the kids wanted to know what the secret was. The boy spilled the beans “What did the teacher ask us to do? To maintain the chaklis….I took out the first circle and second one another circle and ate. As far as I am concerned there are two chaklis. I have complied with both the spirit and letter of the rule’. This is another kind of tendency that we at corporate world have.
• Then there is always this disincentive. Many a times why we don’t follow compliance is because something else is more compelling – immediate return that we can see. You know you are not supposed to drive on the other side of the road ..take a U turn and cut across.  It is not only risking ourselves but also risking others on the line. This is exactly what compliance is telling you. It is not only about risking your own future …things which are not in your control. You also become an impediment to the society at large knowingly or unknowingly. 
• This is basically driven by two basic characteristics of human kind. #1 Labhdha rakshanam. Protect and keep whatever you have. #2 Alabhya labham...to acquire something which is not available with you. These are incentives which probe our individual behaviour beyond a defined line because they are easy.
• Because all these principles are given to a ruler we go back to the Rama Charitha Manas, where Rama when he meets Bharatha at the Nandigrama forest asks him “There were actually 13 commandments…Are you consulting? Are you complying? How are you following the Raja Dharma?”  So our history is rich in examples where we have put compliance first. 
• Again going back to Bhagavad Gita, Shri Krishna says “Sambhaavitasya cha akeertim maranaadatirichyate which means for noble people, disgrace is greater than death” If this is followed, you will never resort to fraud or cheating. As leaders we are under continuous scrutiny but we also have this tendency called ‘minimalism’. It is okay this time..a small breach is fine. But these small things create cracks in the system. 
• Compliance is something like our conscience which should not be handed over to someone else. Conscience has to be programmed here (in the head) and that has to keep prodding you to check if we are on the right path or not.  Non-compliance necessarily means you are trying to dig a hole in the same structure on which you are standing. 
• Shri Krishna says in Sankhya yoga “Aapuryamanam api achalam prathishtam, samudram aapaha pravishanti yadvat”. “As the ocean is filled with water flowing into it from all sides and remains immovable, so the man into whom all desires flow, but is not a bit affected attains peace and not the man who craves the desire”. Irrespective of new waters entering into the sea, the sea has only temporary ripples but soon regains state of equilibrium and stand tall. “You have built a Temple of Compliance (addressing me). Know that in volatile times, there are small variations, small ripples, waves, tides which will gradually ebb away. Please keep to who you are and be non-compromising in terms of your integrity. That is the true essence of what Compliance means”.
• Let alone the corporate world, we need to ingrain compliance into our own lifestyle also. Then we stand tall in the corporate world because as Shri Krishna says in the Karma Yoga “Yadyadaacharati shreshtaha, tat devetaro janaha, sa yat pramaanam kurute lokaha tad anuvartate”. “Whatever action is performed by a great man, common men follow in his footsteps. And whatever standards he sets by exemplary acts, all the world pursues”. So please don’t set wrong examples. The best and smartest people in business are under constant scrutiny and the signals they send are watched by the world. We must ensure that we are meeting the basic expectations of the society and that gives us the license to be an integral part of the society.
• Moving away from the Bhagwad Gita, let’s talk about Herzberg two factor theory – Hygiene factors and Motivators. Compliance is more like a hygiene factor …It’s presence does not add value but its absence hits you hard. As a motivation factor it multiples the impact. If it is absent it is only a degree of performance. So, let us ensure it becomes a part of the corporate hygiene, personal hygiene and character hygiene.
• Today being a day when you have expanded your office, I will end with this quote :
  “Dhruvante raaja, varuno dhruvam Devo bruhaspatih,
  Dhruvanta indrascha agnishcha raastram dhaarayataam dhruvam !
  Oh king! May Varuna give stability; May the divine Bruhaspati give stability; May Indra and Agni give stability; May the kingdom be held in stability”!
  Let the owner of the land, leader of the land – in this case the  organisation, be permanent. Let her ideals be permanent, let her guidance be permanent. Let she be blessed along with a team to reach greater heights and serve as conscience keepers to more and more of us who are actually active in social life….!!

After such an insightful and impactful talk on the need for compliance, do scroll down to catch what notifications some of the ministries have announced during September, 2023. Key one being on the Angel Tax under the IT update section.

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