Corporate Governance
It goes to the credit of Infosys Mentor Narayana Murthi who publicised the phrase Corporate Governance and he authored several path breaking measures to improve the disclosure level of Indian Public Companies and devised means to attract the best in to the Board by enhanced remunertion for Independent Directors.A lot of Boards induced eminent individuals nominating them to various committes so that they could draw remuneration commensurate with their effort. Public and those listed Companies were required to place the corporate governance report duly certified by the external auditor before the shareholders. the various committes that were constituted were remuneration committee, Appointment committe, ethics committee, Audit committee, investor grievance committee and so on and so forth. This facilitated Companies those of which in emerging sectors such as IT, ITES, Bio technology to draw eminent personalities from various walks of life in to thier corporate board. But the results were not encouraging.
Whereas the attempt was to curtail the influence of promoter group in Public listed companies but the result was that the promoter group always managed to win the independent Directors because of the increased remunerative package. the glaring example of corporate fraud and mis-governance was evident when Ramalinga Raju tried to siphon huge sums of money to his personal enterprises in the name of de-risking the business model. The celebrity status of the board included such personalities as Vinod dham the co inventor of Pentium chip, many retired Government servants who had to resign following the exposure in the media.
It is not without reason that Lord Swaraj Paul chose to call them Corporate frauds when his attempts to take over Escorts failed despite his perceived proximity to the powers that be at the Centre. The personal avarice of Promoter groups and those of chief executives is the cause of this moral decay.
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