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“Our country has ample natural resources and manpower, but what India lacks today is good governance. It is due to poor governance on part of the Government and companies (public or private) that we are not able to achieve the desired results,” said S.K. Gupta, Director, The Institute of Cost Accountants of India (ICAI).
Gupta was speaking at a lecture on corporate governance, organised by Business Line as part of its campus initiative, BL Club, with energy corporation, Cairn India, at Shaheed Sukhdev College of Business Studies, New Delhi on Friday.
Corporate governance essentially involves balancing the interests of all stakeholders in a company - shareholders, management, customers, suppliers, financiers, Government and the community, Gupta said.
He said self-discipline was the key. “Many companies have a code of conduct which governs how its employees should conduct themselves while working in the company. But the question is how many employees actually read it. Of those who read it, how many understand it and live by it,” he added.
He gave the example of a seminar that he attended in Chennai where, apart from him, an executive from HCL was the speaker. When she received the memento at the end of the function, the executive asked him what the cost of the memento was. When Gupta asked her why she needed to know that, she said, “My company has a gift policy, and I cannot accept gifts that cost more than a specified limit.” He also mentioned some scandals that shook the corporate world, such as Enron and Lehman Brothers, and most recently Reebok, where, he said, the Managing Director and Chief Financial Officer colluded and on paper transferred stocks from the factory to a depot which did not exist. He said such scandals ultimately lead to poor functioning of the company, low productivity and, in many cases, winding up of the company.
Poonam Verma, Principal, Shaheed Sukhdev College of Business Studies, and Kumar Bijoy, Head of Department of Bachelor of Financial Investment and Analysis, were also present at the lecture.
The Business Line Club initiative seeks to provide students with a campus interface between industry and academia, allowing the two to work with each other and evolve current practices in industry.
navadha.p@thehindu.co.in
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