Ethics And Development


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  • Ladies and Gentlemen Corporate Governance rests with the Vision and Perception of the Corporate Leadership
  • and The ICSI has adopted a Vision for Corporate Governance itself
  • Ladies and Gentlemen Commitment to well-being and progress of all stakeholders is our age old mantra
  • Taittariya Upanishad, which has for ages strengthened our centres of education, contains invaluable advice to students passing out from an institute of learning - Satyam Vada Dharmam Chara
  • This is our own age old mantra of Good Governance.
  • Ladies and Gentlemen Companies that have won ICSI National Award for Excellence in Corporate Governance have
  • Consistently earned high returns, increased their net worth and enhanced their shareholders wealth
  • Invested significantly in proactive research and development
  • Developed people into ‘achievers’ than just ‘performers’
  • Dealt ethically with customers, government and business partners
  • Maintained and updated their professional management culture, system and processes
  • ..and accomplished
  • Growing Investors Winning Employees Delighted Customers Trusted Suppliers Satisfied Government And Regulators Happy Society That is Excellence, which everyone aspires for and that leads to National Growth
  • Corporate Governance is not a buzzword, there are so many advantages of applying good corporate governance practices
  • Companies get Widespread Goodwill and Brand Reputation, resulting into Widening Customer Base Ready Market for New Products Access to Global Markets, and Better Access to Human Capital
  • and Enhanced Trust and Confidence of all Stakeholders INVESTORS EMPLOYEES CUSTOMERS SUPPLIERS GOVERNMENT AND REGULATORS, and SOCIETY at large
  • Leading to…
  • Ethics And Development

    1. 1. ETHICS AND DEVELOPMENT “ E ntrenching the principles of good governance in public and private sectors for sustainable development” Pavan Kumar Vijay Past President The Institute of Company Secretaries of India 02/22/12 Program at The Institute of Certified Public Secretaries of Kenya on 12.08.2010
    2. 2. “ Corporate governance is… … the application of best management practices , compliance of law in letter and spirit and adherence to ethical standards for effective management and distribution of wealth and discharge of social responsibility for sustainable development of all stakeholders” Institute of Company Secretaries of India
    3. 3. <ul><li>Corporate Governance rests with the Vision and Perception of the Leadership </li></ul>
    4. 4. <ul><li>and </li></ul><ul><li>A Leader need to adopt a </li></ul><ul><li>Vision for Corporate Governance </li></ul>
    5. 5. Corporate Governance Framework Output – Input = Wealth Created ? Sustainability Happiness and Prosperity of all Stakeholders Reinvestment Distribu- tion <ul><li>Research and </li></ul><ul><li>Development </li></ul><ul><li>HR Development </li></ul><ul><li>Infrastructure </li></ul><ul><li>Risk Management </li></ul><ul><li>SUPPLIERS </li></ul><ul><li>Adequate Returns </li></ul><ul><li>HUMAN ASSETS </li></ul><ul><li>Adequate </li></ul><ul><li>Remuneration </li></ul><ul><li>CUSTOMERS </li></ul><ul><li>Affordable Prices </li></ul><ul><li>PUBLIC </li></ul><ul><li>Payment of Taxes and Partnership in National Development Projects </li></ul>Wealth Creation Wealth Management Wealth Sharing Enhanced Capabilities Best Management Practices are Vital Here Law and Ethics are Vital Here
    6. 6. Constituents of Corporate Governance
    7. 7. The stakeholder value chain SUPPLIERS CUSTOMERS HUMAN RESOURCE Supply Funds, Materials and Services Value Addition and Management of Resources Give Opportunity to Co. to Satisfy their Needs Adequate Returns for Funds, Material and Services Supplied Adequate Salary and Security for leading a Happy Life Best Quality Products and Customer Care at Minimum Prices ROLE OF STAKEHOLDERS EXPECTATIONS OF STAKEHOLDERS Potential Suppliers, Human Resources and Customers Biological, Economic and Cultural Environment PUBLIC PUBLIC EXPECTS PARTNERHIP FOR SUSTAINABLE DEVELOPMENT
    8. 8. The Principles of Good Governance
    9. 9. A Case Study on Corporate Governance - Examples from India vs
    10. 10. The vision adopted in Infosys <ul><li>Systematic Scheduling of Board Meetings with maximum Participation assured. </li></ul><ul><li>Ensuring delegation at committee level being composed of optimum number of Independent Directors. </li></ul><ul><li>Maximum tenure of independent directors is nine years. </li></ul><ul><li>Dissemination of regular information to investors through e-mail, telephone, face-to-face meetings, road shows etc. </li></ul><ul><li>Cont… </li></ul>
    11. 11. The vision adopted in Infosys <ul><li>Presentations are made by executive directors to familiarize the new non-executive directors with the Company’s operations. </li></ul><ul><li>Evaluation of non-executive directors through a peer-evaluation process. </li></ul><ul><li>Whistle blower policy providing direct access of employees to Chairperson of Audit Committee. </li></ul>
    12. 12. And That’s what makes Infosys A value driven organization and resuts into greater valuation and overlall benefits 25.6 A Comparison of Infosys in IT Industry with their P/E multiple
    13. 13. The Satyam Disaster!!! <ul><li>Depiction of rosy picture in disclosures </li></ul><ul><li>Lack of transparency </li></ul><ul><li>Ineffective participation of Independent Directors </li></ul><ul><li>Falsification of accounts </li></ul><ul><li>Failure of Board Procedures & Systems </li></ul><ul><li>Unproductive Whistle Blower </li></ul>Eventually the whole system of Corporate Governance was treated as a mockery by not adoption of principles in Spiritual sense which resulted in a Corporate Slaughter
    14. 14. <ul><li>The age old mantra of Indians is </li></ul><ul><li>that </li></ul><ul><li>Commitment to well-being and progress of all stakeholders </li></ul>
    15. 15. ‘ Satyam Vada Dharmam Chara’ - Taittariya Upanishad Mantra for Good Governance Cont… Speak the Truth and Practice Righteously
    16. 16. Mantra for Good Governance Karna Parva of the Mahabharata, an Indian Epic (more than 2500 years ago)
    17. 17. <ul><li>Worshipping 33 Crore Godheads </li></ul><ul><li>signifying various species, plants, </li></ul><ul><li>cosmic elements, … </li></ul>
    18. 18. <ul><li>Care for Panchtatvas (The Basic Elements) </li></ul><ul><li>Earth, (Prithvi) </li></ul><ul><li>Water, ( Jal), </li></ul><ul><li>Sky , ( Akaash) </li></ul><ul><li>Wind, ( Vaayu) & </li></ul><ul><li>Fire (Agni) </li></ul><ul><li> that make a human being </li></ul>
    19. 19. <ul><li>This is our approach to </li></ul><ul><li>Environment Protection </li></ul>
    20. 20. The essential principle of Mahatma Gandhi's Governance philosophy “ Trusteeship”
    21. 21. Capacity, Knowledge and Resources Maximization of stakeholders’ value and well-being and progress of humankind TOWARDS THROUGH Transparency, accountability and truthful disclosure of state of affairs Righteousness Truth Corporate are also expected to use their
    22. 22. <ul><li>This is our own age old mantra of </li></ul><ul><li>Good Governance </li></ul>
    23. 23. Companies that have followed these principles of Corporate Governance have
    24. 24. <ul><li>Consistently earned high returns, </li></ul><ul><li>increased their net worth, </li></ul><ul><li>enhanced their shareholders wealth </li></ul>
    25. 25. <ul><li>Invested significantly in proactive research and development </li></ul>
    26. 26. <ul><li>Developed people into ‘ achievers ’ than just ‘ performers’ </li></ul>
    27. 27. <ul><li>Dealt ethically with customers, government and business partners </li></ul>
    28. 28. <ul><li>Maintained and updated their professional management culture, system and processes </li></ul>
    29. 29. <ul><li>..and accomplished </li></ul>
    31. 31. <ul><li>Advantages of applying </li></ul><ul><li>Best Corporate Governance Practices </li></ul>
    32. 32. <ul><li>Widespread Goodwill and Brand Reputation </li></ul>Access to Global Markets Better Access to Human Capital Ready Market for New Products Widening Customer Base
    33. 33. <ul><li>Enhanced Trust and Confidence of all Stakeholders </li></ul>EMPLOYEES INVESTORS CUSTOMERS SUPPLIERS GOVERNMENT AND REGULATORS SOCIETY
    34. 34. <ul><li>Leading to… </li></ul>
    35. 35. Environment Civil Society Business Society SUSTAINABLE DEVELOPMENT OF NATION
    36. 36. The Nation’s Welfare <ul><li>Happier Nation </li></ul><ul><li>World wide recognition </li></ul><ul><li>Overall Growth </li></ul><ul><li>Enhanced confidence amongst foreign investors though Primary/Secondary Market </li></ul><ul><li>Overall stakeholders benefit </li></ul><ul><li>Enhanced repute and significance of Citizens at the global platform. </li></ul>
    37. 37. <ul><li>The Indian Growth Story </li></ul><ul><li>& </li></ul><ul><li>The Role of Governance </li></ul>
    38. 38. The Indian scenario – The Initial Hurdles
    39. 39. Cause Behind Slow Industrial Growth
    40. 40. The Story of Change over <ul><li>The initiatives by the government </li></ul><ul><li>Liberalization of Industrial Development </li></ul><ul><li>Improved Infrastructural development </li></ul><ul><li>Development through Public Private Partnership (PPP) Model </li></ul><ul><li>Transparency in Disclosures through RTI Act & proposed Law on Whistle Blower Disclosure & Protection </li></ul><ul><li>Strengthened Governance Model </li></ul><ul><li>Legal Process strengthening through e-governance </li></ul>(The Delhi Metro Rail)
    41. 41. The Desired Result <ul><li>Optimum utilization to high population </li></ul><ul><li>Increased per capita Income </li></ul><ul><li>More Infrastructural Development </li></ul><ul><li>More FDI due to enhanced Governance </li></ul><ul><li>Investors trust within and outside nation </li></ul>
    42. 42. India Today <ul><li>2 nd most populous nation 1.2 billion – Largest Pool of young & Skilled Manpower </li></ul><ul><li>The 2 nd fastest growing economy of the world after China. </li></ul><ul><li>GDP USD 1 trillion and growth in last 4 years is 9%, 9.6%, 9.4% and 6.7% </li></ul><ul><li>GDP - Agriculture : 20%, Industry 23%, Services: 57% </li></ul><ul><li>Never defaulted on international commitments </li></ul><ul><li>Preferred destination of Foreign Direct Investment </li></ul><ul><li>Believed to be one of the top five Economies by 2050 </li></ul>
    43. 43. The real enemy of good governance – The root cause CORRUPTION
    44. 44. The Evil of Corruption – The Way outs to deal
    45. 45. The Anti Corruption Implementation Model <ul><ul><li>The e-governance Initiative (MCA21, UID, other e-portals) </li></ul></ul><ul><ul><li>Better governance through Legal formulation and initiative of Right to Information (RTI) Act </li></ul></ul><ul><ul><li>The consideration of Public Interest Disclosure and Protection to Persons Making The Disclosure Bill, 2010 </li></ul></ul>
    46. 46. The need of hour for Developing Nations <ul><li>Optimal utilization of available resources </li></ul><ul><li>Improved Infrastructural development </li></ul><ul><li>Enhanced Education Facilities </li></ul><ul><li>Liberalization of Economy </li></ul><ul><li>Industrialization with Human Face </li></ul>
    47. 47. <ul><li>Initiatives towards Corporate Governance </li></ul><ul><li>by </li></ul><ul><li>The Institute of Company Secretaries of India </li></ul>
    48. 48. Initiatives of ICSI towards good governance <ul><li>The Corporate Governance Award function </li></ul><ul><li>The Post Membership Qualification on Corporate Governance </li></ul><ul><li>The Corporate Governance Module for best practices </li></ul><ul><li>The laying of secretarial standards for best practices </li></ul><ul><li>Investor Education and Awareness Programmes </li></ul><ul><li>Founder member of International Federation of Company Secretaries </li></ul>
    49. 49. The Secretarial Standards of ICSI One of its own type in the world <ul><li>SS-1 Meetings of the Board of Directors </li></ul><ul><li>SS-2 General Meetings </li></ul><ul><li>SS-3 Dividend </li></ul><ul><li>SS-4 Registers and Records </li></ul><ul><li>SS-5 Minutes </li></ul><ul><li>SS-6 Transmission of Shares and Debentures </li></ul><ul><li>SS-7 Passing Resolutions By Circulation </li></ul><ul><li>SS-8 Affixing of Common Seal </li></ul><ul><li>SS-9 Forfeiture of Shares </li></ul><ul><li>SS-10 Board's Report </li></ul>
    50. 50. ICSI + ICPSK…. The way ahead <ul><li>Advocacy of Good Governance Practices </li></ul><ul><li>Recognition to Good Governed Companies </li></ul><ul><li>Specifying structures and role models </li></ul><ul><li>Inculcate the better Governance Practices in Members & Students </li></ul><ul><li>Promotion of the Secretarial Standards </li></ul>
    51. 51. Outstanding Performance, Higher Profits, Expanded Market Reach and the like FAILS to protect a company which has put good governance & ethics at the back burner…. History is Witness D I S A S T E R
    52. 52. Secret behind building foundations ..…Only the culture of strict adherence to good compliance can keep a company ahead on sustainable basis , bring in larger profits!!! S U C C E S S
    53. 53. <ul><li>Corporates should act like Honeybee which suck the nectar of the flowers without effecting its fragrance and produce honey for the well –being of society . </li></ul><ul><li>The Ancient Indian Philosophy </li></ul>
    54. 54. Thank you kenya