8th International Corporate Governance Summit 2012; 18 September 2012, Mumbai

8th International Corporate Governance Summit

Dates: September 18, 2012
Venue: Mumbai

CII’s 8th International Corporate Governance Summit 2012

CII, in pursuance of its endeavour of promoting better Corporate Governance practices, organized the International Corporate Governance Summit on 18 September 2012 at Mumbai.

Addressing the Summit, Dr M Veerappa Moily, Hon’ble Minister for Corporate Affairs and Power, announced that the much awaited legislation on company law - the Companies Bill 2011 - would be a state-of-the-art legislation and would be presented in the Winter Session of the Parliament. The Minister acknowledged that good corporate governance cannot be achieved by having more regulations but can be ushered in by corporates assuming a larger and proactive role. “My thrust is upon fostering a corporate culture based on universally accepted values of good governance” said the Minister in his Inaugural Address.

Presenting the Regulator’s perspective, Mr Prashant Saran, Whole Time Member, SEBI stressed on encouraging out-of-box thinking during his Special Address. He observed that it is time we examine the corporate form of business organizations itself and evolve new paradigms in reporting and communication.

Mr Adi Godrej, President, CII, while delivering the Keynote Address at the Summit, stated that Corporate Governance will continue to evolve with the introduction of new legislation and voluntary initiatives. Implementation of recent and pending reforms as well as changing stakeholder expectations would bring about changes in practices, added Mr Adi Godrej.

On the occasion of the Summit, Mr Adi Godrej presented ‘Guiding Principles of Corporate Governance’ to Dr Moily. The Principles, formulated by the Committee set up by the Ministry of Corporate Affairs, under the chairmanship of Mr Godrej, present some practical suggestions on strengthening corporate governance within the existing legal framework. The Principles aim to transform corporate governance from a ‘tick-box’ exercise to an actual roadmap.

Chairman of CII National Council on Corporate Governance & Regulatory Affairs, Mr R Gopalakrishnan underscored the need for strengthening corporate governance as a pre-requisite for strengthening public confidence in business and economy. “A deeper understanding of ever evolving corporate governance scope is critical. Today it is more vital than ever to encourage and imbibe good practices in the corporate culture,” he added.

Mr Chandrajit Banerjee, Director General, CII welcomed the distinguished guests and participants to the Summit and highlighted that the 8th edition of the Corporate Governance Summit bears testimony to industry’s commitment to corporate governance. The Summit also marked the release of joint CII – Institutional Investor Advisory Services Survey titled ‘Institutional Investors: Driving Force for Good Governance’. The Survey outlines how institutional investors can be vital value providers to business and economy apart from being providers of capital. It reveals that majority of investors deem corporate governance as “very important” in their assessment of target companies. It also reflects on investor perceptions on the effectiveness of corporate governance mechanism in India.

Post release of the Survey, a panel comprising of institutional investors, corporate representatives and consultants delved on governance concerns of institutional investors in India and assessed how they can leverage information at their disposal and become effective agents to drive better corporate governance practices in their investee companies. Mr Arun Nanda, Director, Mahindra & Mahindra; Mr Amit Tandon, Managing Director, Institutional Investor Advisory Services ; Mr Himanshu Kaji, Executive Director and Group COO, Edelweiss Group; Mr Nilesh Shah, President – Investment Banking & Strategic Initiatives, Axis Bank; Mr Leo Puri, Senior Adviser, McKinsey & Company; Mr Subhashis Nath, Executive Director & Founding Partner, Axis Risk Consulting Services and ms Inderpreet Sawhney, Senior Vice President and General Counsel, WIPRO participated in the discussion.

The Summit also witnessed focused deliberations on the existing corporate practices for measuring, reporting and monitoring the three “Ps” – Profit, People and Planet. Panelists from leading companies such as Bajaj Auto, Mahindra & Mahindra and Siemens presented the face of a new and more participatory approach to sustainability, governance and performance of business. The Panel comprising a mix of practitioners and consultants, represented by Mr Ulhas Yargop, President — Information Technology Sector & CTO, Mahindra Group; Mr Manfred Haebig, Private Sector Development Director, GIZ; Mr Mark Goyder, CEO & Founder, Tomorrow’s Company; Mr K V Iyer, Senior Manager, Bajaj Auto Limited and Mr Ranjeet Dalvi Executive Vice President - Strategy and Business Excellence, Siemens; evaluated the feasibility of Business Responsibility norms prescribed by the Ministry of Corporate Affairs and the challenges of setting measurement parameters & complying with prescribed formats. The Session highlighted the need of the governance mechanism to acknowledge and reflect the great diversity that exists within business by factoring individualized action plans developed by corporations. The Panel concluded that this approach would help foster further innovation and experimentation, add value to reporting and increase the number of companies participating in this process.

A discussion on Directors’ responsibility, accountability and liability was presided over by Mr Y H Malegam, Chairman Emeritus, S B Billimoria & Co. Set against the background of increasing clamor for meting out punishment to directors, including non-executive and independent directors; the Session discussed the need for better, and not more, information being made available to directors. The discussion highlighted that the regulatory framework is holding directors vicariously liable for criminal offences by companies, including independent directors at par with executive directors.

The knowledge test is not applicable for non-compliances on the part of a company under laws other than the Companies Act. Some of these laws do not distinguish between corporates and natural persons.

Experts such as Mr Shailesh Haribhakti, Professional Independent Director; Ms Zia Mody, Founder & Senior Partner, AZB & Partners and Mr Deepak Satwalekar, Independent Director, Infosys deliberated on how liability of directors who do not participate in day to day management can be limited and justified.

The Summit, a hugely successful event in terms of quality of deliberations, saw the participation of large number of delegates representing senior management, institutional investors, investment intermediaries, compliance professionals of India Inc.