Insisting on the need to veer the focus on human relationship and not accumulating wealth, SC Khuntia, Chairman, Insurance Regulatory and Development Authority of India (IRDAI), said that the new paradigm of maximisation of stakeholder’s value is the need of the hour.

He was speaking at the National Insurance Academy’s (NIA) first annual International Colloquium (virtual) titled ‘Transition to Stakeholders Value Creation’.

Khuntia said: “With the principle of maximisation of shareholder’s value, there is a concentration of wealth in a few hands only, resulting in inequality. So, in the interest of the long-term sustainability, we have to look out for the new paradigm of maximisation of stakeholder’s value”.

Customer and employee satisfaction are the keys to creating more value, he said, adding that maximisation of welfare does not mean that one section of the society is against another, but an equilibrium must establish in which everyone feels valued.

“Independent directors play an important role in safeguarding the interests of different stakeholders. As resources belong to the society, besides the financial goals of wealth creation, there are also non-financial goals thatneed to be fulfilled,” he said.

MR Kumar, Chairman, LIC of India, said that corporate governance is the nucleus of all functions of any organisation, and organisations have the stakeholder governance committee to take care of the interests of their stakeholders such as shareholders, employees, suppliers, government, environment, and the society as a whole.

GN Bajpai, former Chairman, SEBI and LIC of India, said the behavior of people cannot be changed through legislation, but it can be changed through motivation.

GSrinivasan, Director, NIA, said that corporate governance has assumed a lot of importance in India and the world, and the government and regulators are taking a conscious effort to safeguard the interests of all stakeholders.

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