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CHENNAI, Feb. 15

THE corporate sector has to gain small investors' confidence that has been eroded seriously in recent times, according to Mr P. Shankar, Central Vigilance Commissioner.

Addressing a conference on `Socially responsible corporate citizenship' here on Saturday, Mr Shankar felt that in a developing country where the shareholders' awareness was low, they suffer more. The sector needs to take relook at a system that allows an individual investor with a small stake to enjoy a large chunk of the company's resources and revenues thanks to his designation as a chairman or a managing director. "We need to ask how many of them are professionally competent to hold that position," he felt.

Corporate social responsibility has come to stand for responsibilities to society, responsibilities beyond that of the shareholder. But the corporates should not lose track of what they owe the shareholder.

Public sector banks and government undertakings, which come under the purview of the Central Vigilance Commission, often complain of their competitiveness being affected by increased governance. The private sector, they say, is not burdened by the accountability to the commission, Mr Shankar said.

But in his opinion, this was often an alibi for non-performance. Those in power in the private sector too are accountable. The rules are the same and corporate governance is applicable as much to the private sector as to the public sector, he said.

Mr N. Ram, Editor, Frontline, urged the corporate sector to take a firm stand against communalism, which is being employed as a political strategy. Corruption is rampant in the political realm and has pervaded businesses. People have come to take for granted that politicians are corrupt, abuse power and are immune from legal investigations. In Tamil Nadu though everyone recognises the pervasiveness of corruption there has been no real cleaning up and the investment climate has suffered, he said.

Addressing the inaugural session, Mr S.M. Datta, Chairman, Castrol (I) Ltd, stressed that corporations have a responsibility to society in their quest for profits. The challenge was in tackling the perception of corruption, which was having an adverse impact on attracting investments.

Managements have achieved economic success without participating in the process of corruption. Strong individuals with firm values are a key factor in governance since individuals take corporate decisions. Decisions depend on values imbibed during the process of growing. The goodwill and determination of business leaders is the key factor in governance, he said.

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