The Hindu Business Line : Base corporate governance on principles: Adi Godrej

AN executive board of 10 young managers who look at issues such as strategy, corporate governance and human resource development will report their findings once a quarter to the regular company board. This is one of the many initiatives to improve corporate governance in India today; at least in the Godrej Group, according to Mr Adi Godrej, Chairman, Godrej Group.

It is important that corporate governance be principle-based rather than rule-based. This is essential since principles are harder to `get around' compared to rules. "In trying times, the temptation to seek loopholes in the rules remains large. However, with principle-based corporate governance, the quality of governance is as robust as the principles," said Mr Godrej.

Mr Godrej was addressing the 32nd national convention of company secretaries in Mumbai on Thursday.

There is no strategy more important for company secretaries than improving the corporate governance in companies that they work for, Mr Godrej said.

"The present crisis of confidence on corporate leadership owes its origin to the failures of seemingly infallible corporations like Enron, Arthur Andersen, Tyco, Worldcom etc. The recent US mutual fund problems have further added to the interest,'' he said.

Mr Godrej emphasised that corporate governance is not just another management or social fad, but is the ultimate management tool. "Good corporate governance is a very rewarding journey for those who choose the right path," he said.