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IOD Special Talk - Principles before Performance
Foundation for an Effective Governance
It gives me great pleasure to address this distinguished gathering. Institute of Directors (IOD) has consistently championed excellence in ethics, leadership and corporate governance, and today's deliberations will reflect that enduring commitment.
Before turning to the sessions ahead, I would like to briefly reflect on the broader economic context in which our discussions take place. Despite persistent global headwinds, including geopolitical uncertainty, supply chain disruptions and financial market volatility, India continues to remain one of the fastest growing major economies. This growth has been supported by strong public investment in infrastructure, a resilient services sector and broadly stable macroeconomic fundamentals. Public capital expenditure has played an important countercyclical role, encouraging private participation across infrastructure, manufacturing and logistics, while sustained reforms in taxation, labour laws and ease of doing business have strengthened the investment environment.
At the same time, private sector capital expenditure remains selective, and small and medium enterprises continue to face challenges related to credit access, technology adoption and market volatility. Sustaining high growth over the long-term will depend on productivity enhancement, revival of private investments and employment generation. This calls for continued structural reforms and responsible corporate leadership.
Professional ethics must move beyond policy documents and be lived in practice. Without this, sustainable business and intergenerational equity cannot be achieved.
The service sector remains the principal driver of growth and exports, particularly in information technology, finance and digital services. However, value addition within services must improve. Manufacturing, supported by infrastructure development and policy initiatives, must realise its full potential for employment generation. Agriculture, which remains critical for livelihoods, continues to be vulnerable to climate risks. From the perspective of employment, income distribution and social stability, there is a clear need to rebalance sectoral contributions to the economy.
In this context, governance and ethics assume central importance. From my professional experience, the guiding principles of legality, propriety, transparency, accountability, economy and effectiveness remain fundamental to both public and corporate leadership. These principles must be aligned with ESG commitments, internal controls and responsible risk management, particularly in an era shaped by climate change, technological disruption and growing stakeholder expectations.
Public capital expenditure has played an important counter cyclical role, encouraging private participation across infrastructure, manufacturing and logistics, while sustained reforms in taxation, labour laws and ease of doing business have strengthened the investment environment.
Too often, boards in both the public and private sectors lack diversity, inclusivity and alignment with macroeconomic realities. This undermines competitiveness and long-term effectiveness. I would encourage all leaders present to engage in introspection, strengthen ethical foundations and prepare institutions for emerging challenges.
Professional ethics must move beyond policy documents and be lived in practice. Without this, sustainable business and intergenerational equity cannot be achieved. Industry, academia and government must also work together to align skills, technology and education with future needs, particularly as employability remains a pressing concern.
Business leadership today requires a holistic and forwardlooking approach. Independent directors have a vital role to play, not only in safeguarding financial performance but also in overseeing economic value creation and ESG outcomes.
Thank you and I wish the deliberations every success.
Excerpts from the 'Guest of Honour Address' delivered by Mr. G.C. Murmu, IAS (Retd.), former Comptroller & Auditor General (CAG), India, on 20th December, 2025 at the National Convention on Leadership and Business Excellence, held at Radisson GIFT City Club, Gandhinagar, Gujarat (India).
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Mr. G.C. Murmu, IAS (Retd.)
former Comptroller & Auditor General (CAG), India
Owned by: Institute of Directors, India
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