Ethics And Development
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Transcript of Ethics And Development
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ETHICS AND DEVELOPMENT “Entrenching 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
04/12/23
Program at The Institute of Certified Public Secretaries of Kenya
on 12.08.2010
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…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
“Corporate governance is…
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Corporate Governance rests with the Vision and Perception of the Leadership
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and
A Leader need to adopt a Vision for Corporate Governance
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Corporate Governance Framework
Output – Input = Wealth Created ?
Sustainability
Happiness andProsperity of all
Stakeholders
Reinvestment
Distribu- tion
Research and DevelopmentHR DevelopmentInfrastructureRisk Management
SUPPLIERS Adequate ReturnsHUMAN ASSETS Adequate RemunerationCUSTOMERS Affordable PricesPUBLIC Payment of Taxes and Partnership in National Development Projects
Wealth Creation Wealth Management Wealth Sharing
EnhancedCapabilities
Best Management Practices are Vital HereLaw and Ethics are Vital Here
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Constituents of
Corporate Governance
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The stakeholder value chain
SUPPLIERS CUSTOMERSHUMAN 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 EnvironmentPUBLIC
PUBLIC EXPECTS PARTNERHIP FOR SUSTAINABLE DEVELOPMENT
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The Principles of Good Governance
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A Case Study on Corporate Governance - Examples from India
vs
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The vision adopted in Infosys
Systematic Scheduling of Board Meetings with maximum Participation
assured.
Ensuring delegation at committee level being composed of optimum
number of Independent Directors.
Maximum tenure of independent directors is nine years.
Dissemination of regular information to investors through e-mail,
telephone, face-to-face meetings, road shows etc.
Cont…
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The vision adopted in Infosys
Presentations are made by executive directors to familiarize the new
non-executive directors with the Company’s operations.
Evaluation of non-executive directors through a peer-evaluation
process.
Whistle blower policy providing direct access of employees to
Chairperson of Audit Committee.
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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
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The Satyam Disaster!!!
Depiction of rosy picture in disclosures Lack of transparency Ineffective participation of Independent Directors Falsification of accounts Failure of Board Procedures & Systems Unproductive Whistle Blower
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
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The age old mantra of Indians is that
Commitment to well-being and progress of all stakeholders
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‘Satyam Vada Dharmam Chara’
- Taittariya Upanishad
Mantra for Good Governance
Cont…
Speak the Truth and Practice Righteously
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Mantra for Good Governance
Karna Parva of the Mahabharata, an Indian Epic (more than 2500 years ago)
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Worshipping 33 Crore Godheadssignifying various species,
plants, cosmic elements, …
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Care for Panchtatvas (The Basic Elements)
Earth, (Prithvi)
Water, (Jal),
Sky , (Akaash)
Wind, (Vaayu) &
Fire (Agni)
that make a human being
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This is our approach to
Environment Protection
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The essential principle of Mahatma Gandhi's Governance philosophy
“Trusteeship”
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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
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This is our own age old mantra of Good Governance
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Companies that have followed theseprinciples of
Corporate Governancehave
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Consistently earned high returns, increased their net worth,
enhanced their shareholders wealth
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Invested significantly in proactive research and development
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Developed people into ‘achievers’ than just ‘performers’
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Dealt ethically with customers, government and business partners
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Maintained and updated their professional management culture, system and processes
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..and accomplished
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WINNINGEMPLOYEES
WINNINGEMPLOYEES
GROWINGINVESTORS
GROWINGINVESTORS
DELIGHTEDCUSTOMERS
DELIGHTEDCUSTOMERS
TRUSTEDSUPPLIERS
TRUSTEDSUPPLIERS
SATISFIEDGOVERNMENT AND
REGULATORS
SATISFIEDGOVERNMENT AND
REGULATORS
HAPPYSOCIETY
HAPPYSOCIETY
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Advantages of applying Best Corporate Governance Practices
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Widespread Goodwill and Brand Reputation
Access to Global Markets
Better Access to Human Capital
Ready Market for New Products
Widening Customer Base
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Enhanced Trust and Confidence of all Stakeholders
EMPLOYEESEMPLOYEES
INVESTORSINVESTORS CUSTOMERSCUSTOMERS
SUPPLIERSSUPPLIERS
GOVERNMENT AND REGULATORS
GOVERNMENT AND REGULATORS
SOCIETYSOCIETY
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Leading to…
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Environment
Civil SocietyBusiness Society
SUSTAINABLEDEVELOPMENT OF
NATION
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The Nation’s Welfare
Happier Nation World wide recognition Overall GrowthEnhanced confidence amongst foreign investors
though Primary/Secondary Market Overall stakeholders benefit Enhanced repute and significance of Citizens at the
global platform.
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The Indian Growth Story &
The Role of Governance
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The Indian scenario – The Initial Hurdles
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Cause Behind Slow Industrial Growth
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The Story of Change over
The initiatives by the government
Liberalization of Industrial Development Improved Infrastructural development Development through Public Private Partnership (PPP) Model Transparency in Disclosures through RTI Act & proposed Law
on Whistle Blower Disclosure & Protection Strengthened Governance Model Legal Process strengthening through e-governance
(The Delhi Metro Rail)
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The Desired Result
Optimum utilization to high population Increased per capita Income More Infrastructural DevelopmentMore FDI due to enhanced GovernanceInvestors trust within and outside nation
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India Today
• 2nd most populous nation 1.2 billion – Largest Pool of young & Skilled Manpower
• The 2nd fastest growing economy of the world after China. • GDP USD 1 trillion and growth in last 4 years is 9%, 9.6%,
9.4% and 6.7% • GDP - Agriculture : 20%, Industry 23%, Services: 57%• Never defaulted on international commitments• Preferred destination of Foreign Direct Investment• Believed to be one of the top five Economies by 2050
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The real enemy of good governance – The root cause
CORRUPTION
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The Evil of Corruption – The Way outs to deal
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The Anti Corruption Implementation Model
– The e-governance Initiative (MCA21, UID, other e-portals)
– Better governance through Legal formulation and initiative of Right to Information (RTI) Act
– The consideration of Public Interest Disclosure and Protection to Persons Making The Disclosure Bill, 2010
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The need of hour for Developing NationsOptimal utilization of available
resources Improved Infrastructural development Enhanced Education Facilities Liberalization of EconomyIndustrialization with Human Face
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Initiatives towards Corporate Governance by
The Institute of Company Secretaries of India
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Initiatives of ICSI towards good governance
The Corporate Governance Award function
The Post Membership Qualification on Corporate Governance
The Corporate Governance Module for best practices
The laying of secretarial standards for best practices
Investor Education and Awareness Programmes
Founder member of International Federation of Company Secretaries
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The Secretarial Standards of ICSI One of its own type in the world
SS-1 Meetings of the Board of Directors SS-2 General Meetings SS-3 Dividend SS-4 Registers and Records SS-5 Minutes SS-6 Transmission of Shares and Debentures SS-7 Passing Resolutions By Circulation SS-8 Affixing of Common Seal SS-9 Forfeiture of Shares SS-10 Board's Report
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ICSI + ICPSK…. The way ahead
Advocacy of Good Governance Practices Recognition to Good Governed Companies Specifying structures and role models Inculcate the better Governance Practices in Members &
Students Promotion of the Secretarial Standards
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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
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..…Only the culture of strict adherence to good compliance can keep a company
ahead on sustainable basis , bring in larger profits!!!
Secret behind building foundations
S
U
C
C
E
S
S
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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 .
The Ancient Indian Philosophy
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Thank you kenya