Honesty is relevant to the auditing profession, Dr Sundaram emphasises. “An auditor has to be objective. Auditor also includes accountant in spite of the technical difference. But both perform related functions,” he observes, during a recent e-mail interaction with Business Line. “In the Government of India, the constitutional functionary, the Comptroller and Auditor General, used to perform both the functions relating to the Central and State governments, till about a few years ago. Now accounting and auditing are bifurcated. In a way, the auditor oversees the accounts kept.”

Ultimately, honesty hinges upon national character and characteristic, avers Dr Sundaram. “India is one of the most corrupt countries in the world, according to the Transparency International. We see it everyday; people are also too eager to pay a bribe and settle matters in a hurry,” he rues. “Intellectual honesty is also equally lacking and ours is a hypocritical, and what I call ‘sweeping things under the carpet’ culture. Hope this will change.”

Excerpts from the interview:

Is corporate governance effective in India? To what extent can it be mandated?

Corporate governance is becoming important in India, and companies such as Tatas and Infosys follow it scrupulously, codified or not. ‘Honesty’ comes in here.

Though the proposed simplified Companies Bill puts emphasis on self-regulation or voluntary compliance, codification would be better in the context of what has happened recently in the US, which is generally considered a corporate-model for the world.

But, on the ethical dimension, some European countries maintain better standards. In all surveys of ‘ethics’ and honesty, they perform far better. This is because of the national characteristic.

As we come down from the North of Europe to South, it is an accepted fact that there is a decline. Although many of these countries have signed the international conventions against kickbacks, they circumvent the same in their anxiety to get the orders.

In the aftermath of the recent terror attack in Mumbai, do you think we have a greater awareness of at least the need for better governance?

I think you are now talking about Government governance. The recent attack exposed the weakness of the system and total unpreparedness in spite of luminaries at the crucial helm of affairs. I remember one of my superiors always used to say ‘anticipation’ is important in governance and, consequently, you are prepared.

This applies to the corporate sector also. Generally, we are unprepared. We tend to leave things to chance — an attitude of ‘Nirvana’ — and feel that everything will be all right. This is truer in the matters of security. We find the measures irksome and tend to complain or circumvent, which result in disastrous consequences.

Does the public sector hold the key to economic revival, in the slowdown/recessionary scenario we now face? Also, what would you suggest as immediate priorities for businesses?

The public sector has an important and crucial role to play because it would be easier for them to raise resources with Government backing, which is the need of the hour. As a student of economics, I recall Keynes who emphasised employment.

Businesses should rise up to the occasion and behave responsibly. They should not create panic, say, unemployment, and aggravate the situation. The Government’s guiding hand is necessary here, particularly in regard to infrastructural projects and employment-oriented industries. This would include small and medium enterprises.

More aggressive tourism promotion with liberal concessions will help because tourism is employment-oriented, skilled and semi-skilled, rural and urban.

Any suggestions on areas where we can bring in more transparency?

As in Government governance, where too we are trying for transparency through the RTI (Right to Information) Act, corporate governance should also become transparent. In a situation of this kind, the more transparent you are, less the panic will be. Communication skills and the media are important to carry the message.

Do we need any changes to our laws to ensure that an accountable bureaucracy operates in a corruption-free environment? Or is that too idealistic a goal to aim at?

It is not at all idealistic — it is achievable. The RTI Act is a recent example. There are any number of laws. But some laws like confiscation of ill-gotten wealth by public servants, fast inquiry procedures, rewarding the honest and creation of a meritocracy are important. This is woefully lacking now. My book deals with it.

Are there best practices we can adopt from other countries to make it easier for businesses to be established in India?

If you want examples to emulate, the Scandinavian countries and, nearer home, Singapore, are there. In spite of the laws in the US, the system seems to have failed, particularly in the absence of regulations or laxity in exercising them.

This does not mean that we should go back to the old regulatory economy. It should be a guided and not regulatory economy. The Governments and the Central Bank should keep a watchful eye and intervene in time. The former RBI Governor, Dr Y. V. Reddy, did it successfully. This applies to the other regulatory bodies too.