Nurturing & Developing The Emerging Areas Of Practice - Corporate Governance And Corporate Compliance Management

Nurturing & Developing the Emerging Areas of Practice
Corporate Governance & Corporate Compliance Management
PAVAN KUMAR VIJAY,
Managing Director

“In this fast changing world…
opportunities are unlimited …,
and future belongs to those …
who grasp these opportunities before they become a necessity.”

Emerging Scenario

Emerging Scenario
Globalization
Common Law
Single window
Interface
e- Governance
Simplified Law

Globalization
What is Globalization
Integration
Interaction
Laws
Companies
Business
People
Thus, it is a process driven by international trade and investment and aided by information technology

Impact of Globalization
In WTO regime, Globalization will lead to
Commonality of Law

And
Common Law will lead to
Global Competition

Globalized Scenario
International Corporate Governance
International Common Regulatory Framework
Global Outsourcing of services
Global work culture
Quality of Competition

Globalization Challenges
Quality of Service
Time Commitment
International Operational Infrastructure
Qualitative competition among professionals
Adherence to International standards

e- Governance
What is e-governance?
Use of Information Technology
For increasing Efficiency
For Simplification of Laws
Service Delivery
Uniformity & Transparency

Impact of e- Governance

e-governance & IT Scenario
Seamless Integration of National & International Business
From anywhere – Small village to big cities
At anytime – Early morning to midnight.
In any manner – Internet, Mobile, PDA, etc
24 X 7 Online Services
Real-time Due Diligence, Rating and Compliances
Global Data Banks

Impact of e-governance
IT Driven regulatory procedures
Minimization of procedural steps
Minimization of Non-compliances
IT Driven compliance services
Strategic Role of all professionals
Global services

Single –window Interface
Single window interface
implies
Complete services under one umbrella

In the emerging scenario of ..
Globalization,
Common Law,
e-governance,
Simplification of Laws&
Single Window interface …
“Opportunities are unlimited …”

“And
Success will come only when preparation meets opportunity…”

Preparations for success in Emerging Scenario…

“Not only opportunity
but
Corporate Governance
&
Corporate Compliance Management
are demands of Emerging Scenario…”

Corporate Governance
“CORPORATE GOVERNANCE
is creation of a culture of
consciousness, transparency and openness.
It refers to combination of laws, rules, regulations, procedures and voluntary practicesto enable the companies to maximize the long-term shareholders value, customer satisfaction and wealth.”

Wealth Creation
Wealth Management
Wealth Sharing
?
Distribu- tion
Happiness and
Prosperity of all
Stakeholders
Output – Input
= Wealth Created
SUPPLIERS
Adequate Returns
HUMAN ASSETS
Adequate
Remuneration
CUSTOMERS
Affordable Prices
PUBLIC
Payment of Taxes and Partnership in National Development Projects
Reinvestment
Enhanced
Capabilities
Sustainability
Research and
Development
HR Development
Infrastructure
Risk Management
Best Management Practices are Vital Here
Law and Ethics are Vital Here
Corporate Governance Framework

ROLE OF STAKEHOLDERS
Supply Funds, Materials and Services
Value Addition and Management of Resources
Give Opportunity to Co. to Satisfy their Needs
SUPPLIERS
CUSTOMERS
HUMAN RESOURCE
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
EXPECTATIONS OF STAKEHOLDERS
PUBLIC
Potential Suppliers, Human Resources and Customers
Biological, Economic and Cultural Environment
PUBLIC EXPECTS PARTNERHIP FOR SUSTAINABLE DEVELOPMENT
Stakeholders in Value Chain

Significance of CG
The significance of Corporate Governance lies in the fact that its absence can undermine economicand financial stability…

Significance of CG
Transparency in operations
Entry of Best Talent & Skill
Creation of Brand Image
Consciousness to adopt best practices
In nutshell…
GLOBAL GROWTH
Higher Valuation
Widened opportunities of services
International
Tie-ups
Easier Access to capital (FII, VCF, Foreign Markets)
Confidence of domestic & international investors

Who shall take responsibility
A person who possesses the knowledge of
Law + Management

Law + Management
Corporate
Communication
Corporate
Planning
Legal
Human
Resources
Knowledge of …
Marketing
Finance and
Accounts
Information
Technology
Production
And operations

But who possesses knowledge of
Law +Management

Financial, Treasury & Forex Management
Strategic Management, Alliances & International Trade
Governance, Business Ethics & Sustainability
Due Diligence & Corporate Compliance management
Corporate Laws
Commercial Laws
Taxation Laws
Accounting Laws
Securities Laws
Corporate Restructuring & Insolvency Laws
Economic & Labour Laws
Company Secretary
Law + Management

Role of ICSI
to create
Brand Affiliation of CS
With Corporate Governance

Implementation Strategies
Change mind set of Yourself and Promoters
Show Success story of Good Governance of other companies….
Show the VALUE CREATION
Create transparency in your dealing
Follow good governed Board practices
Compliance of Law in LETTER AND SPIRIT

Role of ICSI
ICSI has taken the responsibility to develop the concept of Corporate Governance.
“ Corporate Governance is the application of best management practices, compliance of law in true letter and spiritandadherence to ethical standards for effective management and distribution of wealth and discharge of social responsibilityforsustainable development of all stakeholders.”
-The Institute of Companies Secretaries of India

ICSI efforts for CG
Vision & Mission
Vision- “To be global leader in development of professionals specializing in corporate governance"
Mission-"To continuously develop high caliber professionals ensuring good corporate governance and effective management and carry out proactive research and development activities, for protection of interest of all stakeholders, thus contributing to public good“

ICSI efforts for CG
Award for Corporate Governance
Post – Membership course in Corporate Governance
Revision of course curriculum.
Increasing number of programmes & Seminars
Representations before International Regulatory Authorities for recognition of CS as a Professional for ensuring Corporate Governance

Future Endeavors
Secretarial Standards on Corporate Governance
Guidance note on Corporate Governance Practices
Branding of CS ascertained with Corporate Governance
Industry & Corporate Tie-ups

Corporate Governance is not about just doing the compliances.
CG is about Managingthe Compliances.
“Managing Compliances is different from Just doingcompliances”

Corporate Compliance Management (CCM)
Another Emerging opportunity in Emerging Scenario

is nothing but the
Opportunity
Lying in
‘Compliance of All applicable laws’

Present Status of Compliance Services

Implementation of Compliance Services with
The Five step process …
Step I : Understanding the Company
Step II : Identification
Step III : Evaluation
Step IV : Assessment
Step V : Compliance Structure

Step I : Understanding The Company
Company’s History & Background
Capital Structure & Evolution
Promoters & Group Companies
Management & Administration buildup
Financial Soundness & Debt Structure
Risk Management & Protection
Licenses & Approvals

Step II : Identification Process

General application of Laws

Sectoral application of Laws

Tourism And Hotel
Capital Market And
Its Intermediaries
Financial Services
Textiles
Banking And NBFC
IT Enabled
Services And BPO
Drugs, Pharma
And Healthcare
IT Solutions
Capital Goods
Infrastructure,
Power And Telecom
Agriculture And
Food Processing
Media And
Entertainment
Engineering and
Construction
FMCG
Industry/ Segment wise application of Laws

Global Operations
Indian Operations
Geographical application of Laws

Step III – Evaluation of Compliance Timings

Step IV - Assessment
Identify the gap between the present compliance system and the results of evaluation process

Step V : Creation Of Compliance Structure
Establishing Controls & Standard
Delegation of Responsibility
Analysis & Assessment
Compliance Reporting

Compliance Management Tools
Checklists
Due Diligence
Softwares
Data banks
Research & Updations

Case Study
CCM in Corporates

Explaining the Process
Understanding The Company
CEMENT INDUSTRY
Public Limited Company
Listed Company – BSE, NSE
Manufacturing & Trading
Exporting Company
10,000 No. of Employees (Approx.)
Units Located at Bhubaneswar, Rajnagpur

Identification of Applicable Laws
On the basis of General Corporate Information – Public Company, Listed at BSE, NSE
Companies Act, 1956
Income Tax Act, 1961
SEBI (Insider Trading) Regulations, 1992
SEBI (Substantial Acquisition of Shares & Takeovers) Regulations, 1997
Listing Agreement

On the basis of Sector – Manufacturing and Trading
National Environment Policy
Environment (Prevention of pollution control) Act, 1986
Central Excise Act

On the basis of Type of Industry – Cement
Cement (Quality Control) Order, 2003
Limestone and Dolomite Mines Labour Welfare Fund Act, 1972
Mines and Minerals (Development and Regulation) Act, 1957
Mineral Conservation and Development Rules, 1988
Metalliferous Mine Regulations, 1961.
Explosives Act, 1884

On the basis of No. of Employees
Employees’ Provident Funds & Miscellaneous Provisions Act, 1952
Factories Act, 1948
Payment of Gratuity Act, 1972
Industrial Dispute Act, 1947
Employees State Insurance Act, 1948
Payment of Wages Act, 1936
Minimum Wages Act, 1948 & Minimum Wages (Central) Rules, 1950

On the basis of Activities – Exporters, Deals in foreign Exchange
FEMA, 1999
Foreign Trade Policy
Customs Act

On the basis of location
Shops and Commercial Establishments Act
Value Added Tax
Labour Laws

Role of ICSI
To initiate more Programmes and Workshops
To increase the Horizon of Institute
To increase the strength of Members
Focus on other Laws
Get a good brand – CORPORATE COMPLIANCE MANAGEMENT

Thus, Opportunities are Unlimited …

Its just a matter of
Creativity, Confidenceand Communication …

…and also PerceptionandPositive Thinking

So now, we need to prepare ourselves to create niche in the emerging scenario …

Globalization Brings Opportunities

Globalization - Pessimist Perception
Threat
Threat
Threat
Threat
Threat of Invasion of Service Sector by Foreign Giants

Globalization -Optimist Perception
Opportunity
Opportunity
Opportunity
Opportunity

But merely optimism will not do
optimism with Confidence & Right Attitude will …

The emerging scenario requires us to reinvent everything - to think of ourselves as compared to others …

Go IT …
“Adopt technology to defeat technology”
is the latest survival mantra ….

Go IT …
Reduce time consumption in repetitive tasks.
Devote more time on Strategic analysis, value additions and planning.
Use on-line regulatory services.
Make use of exhaustive databases, checklists, research papers available online.
Manage multiple tasks through IT.
Use IT to shorten procedure and shift to STRATEGIES and PLANNING.

To become
A Strategic Manager
&
A Corporate Planner

Learn
The 80:20 Theory

20%
Strategy
Management
80%
Research
Filing forms & Applications
Registers & Returns
Checklists
Focus on Procedural Compliances
Present Focus of Services

80%
Strategy
Management
20%
Research
Filing forms & Applications
Registers & Returns
Checklists
Focus of services in emerging Scenario
Focus on Strategical Planning

See the Horizon Beyond Company Law
Its time to go beyond the pre-defined framework.
Always say ‘YES’, its my area of work

“Jumping at several small opportunities may get us there more quickly than waiting for one big one to come along.”

Move with a Direction
Services Provided by an Ordinary PCS
Move with a new Direction
No Direction
Piecemeal services

Single Window interface call for Synergy of
Brand
Knowledge
Capital
Infrastructure
Collaboration is the buzz word …

Corporate
Laws
Economic
Laws
Taxation
Laws
WTO & IPR
International
Trade Law
IT & BPO
Management
Consulting
Finance and
Accounting
Brand
Synergy
Quality
of
Service
Growing Revenues
Knowledge
Synergy
Single
Window
Interface
Growing Customers
Infrastructure
Synergy
Global
Presence
Capital
Synergy
Growing Nations
Commerce
CS + CA + CWA + MBA + LLB
Collaborative Commerce

“Problems becomes opportunities,
when right people come together …”

Advantages Collaborative Commerce
Enhanced Capability to compete with Global giants
Global Reach
Brand leverage
Wider Area of Expertise
Risk Minimization
Active Networking and Public Relations
Attraction of best talent

"We do not have to become heroes overnight…
Just a step at a time, meeting each thing that comes up, seeing it is not as dreadful as it appeared, discovering we have the strength to stare it down."

Quality Brand Building

Opportunities have knocked your door …

But still …

You have to get off from your seat and open the door….”

… and if Opportunity does not knock your door….”

build the door….”

Thank You …
PAVAN KUMAR VIJAY,
Managing Director

Nurturing & Developing The Emerging Areas Of Practice - Corporate Governance And Corporate Compliance Management

by Pavan Kumar Vijay

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