Friday, February 13, 2009

Corporate Governance in India & the Truth about its knotty Network

This article , on the new face of Indian corporate governance, by the Nasscom chief is timely and well articulated. The incident at Satyam has once again focussed attention on the single biggest scourge that afflicts "India Inc"(or "Corporate India").They are the murky dealings of corruption that goes behind scrupulously dressed financial statements of the listed as well in unlisted (more so) companies.The separation of the posts of Chairman and CEO is an excellent recommendation as that brings in that extra dimension of accountability in the actions of a wayward CEO. Ganesh also recommends that companies in other industries should follow the path of "disclosures" pioneered by the "paragons" in the IT industry. Maybe the paragons should also take the lead in disclosing the practices & financial statements followed by their "Channel Partners", the final interface with the customers. The market is aware of many instances where murky dealings with end customers are handled not by the company but by their channel partners. Its a clever move to keep one's state clean while the "business" goes on as usual. In 2009 , the role of "Government" will be doubly important as it will be the biggest customer & spender for India Inc. Nasscom should be proactive in ensuring that these deals with the government are clean in their entirety.
Secondly , a cursory look at the boards of various NGOs (specially the ones floated by corrupt business tycoons) would probably throw up the Who's Who of IT industry among others. One wonders whether such eminent individuals do have significant quality time to devote , at least in board meetings if not in the operations, of these well-connected NGOs. My experience while working in this sector shows that save for a handful, rest of these distinguished professionals don't have the time. What then can be the motivation for being there in the first place? When does "Networking" morph into an "Unfair Nexus"? When does association with eminent names become a legitimate excuse for committing oneself as one of the many funding-but- absentee directors; most of whom look at such NGOs as legitimate tax-saving bodies only? These are some of the straight-forward questions that NASSCOM should ask of its members who hold "absentee" board positions in multi-company, multi-NGO outfits. Otherwise, its advice to reach "higher truth in corporate governance" will sound like empty rhetoric.

No comments: