How can the government enforce ethical business practices?

The heart of corporate governance is transparency, disclosure, accountability and integrity. Legal and regulatory framework of corporate governance in India is mainly covered under the SEBI guidelines, Listing Agreement and Companies Act 2013; however, it is not restricted to only SEBI Guidelines and the Companies Act, 2013. A gamut of legislations like The Competition Act, the Consumer Protection laws, the labour laws, the Environment laws, the Anti-Money Laundering Laws, etc. seeks to ensure good governance practices among the corporates. Some degree of legislation is necessary to ensure that businesses comply with their ethical obligations and the public does not suffer as a result of dishonest business practices. The government has a supervisory role in the field of business ethics. The government is focusing on self regulation through enhanced disclosure requirements and transparency and encouragement to adhere to the established norms. The professionals are acting as extended arm of regulators in ensuring good governance practices in the organizations. However, mere legislation does not ensure good governance. Good governance flows from ethical business practices even when there is no legislation. Corporate governance is not just a legal concept, it is a governance concept, and it is something which has to come from within. But one cannot have abstract concepts applicable to corporates at large and there lies the need for a legislative framework. Government plays an important role in ensuring that business operates in an ethical matter, ultimately, the responsibility to do so lies with the business. It would be impossible for government to oversee all operations to such an extent that they could force all businesses to behave ethically. The focus is shifted to more governance and less government.