The Hindu Business Line : `Avoid over-regulation for better corporate governance'

THE big challenges in the area of corporate governance today are to avoid over-regulation and sidestep unfair demands on companies, felt Dr Omkar Goswami, Founder and Chairperson of CERG Advisory.

Dr Goswami was a member of CII's committee on Corporate Governance and the Working Group on the Companies Act.

He said it was important to avoid going overboard while setting disclosure standards. For example, companies should not be forced to part with competitive information in the pursuit of better disclosure. Do not confuse form for substance, he added.

Dr Goswami, here as a guest lecturer at the Great Lakes Institute of Management, placed the challenges in a positive context. He felt that Indian accounting and financial disclosure standards had evolved to be among the world's best.

Indian accounting standards ranked among the top five, and financial disclosure standards among top three, he said. Having raised the standard, the challenge is to proceed without the introduction of counterproductive measures.

Even as the regulatory regime forced most Indian companies listed on stock exchanges towards higher standards, some companies were driven by self-motivation, he said. He identified Infosys Technologies and Dr Reddy's Labs as self-motivated companies (he is on the board of both companies).

He added that good practices enhanced a company's brand equity, a factor that helped in overseas recruitment and listing.