Corporate governance needs overhaul: IICA chief

Workshop discusses steps to improve the system

Bhaskar Chatterjee, Director-General and CEO of Indian Institute of Corporate Affairs (right), having a word with Bar Council of India former chairman D.V. Subba Rao at a workshop in Visakhapatnam on Tuesday. Photo: C.V. Subrahmanyam

The global economic downturn is not caused by failure of any government, it is a direct result of poor corporate governance. A section of the developed world driven by their naked ambition and greed brought the world to its knees, said Bhaskar Chatterjee, Director-General and CEO of Indian Institute of Corporate Affairs (IICA).

Speaking at the inaugural of a workshop on ‘Companies Act 2013: A new vista for corporate accountability’ organised by the IICA of the Ministry of Corporate Affairs here on Tuesday, he said that the government realised the need for a systemic overhaul and brought in the new Act. The successive changes to the Companies Act 1956 did not stop corporate scams like Satyam. There was a need to relook at the entire gamut of corporate governance and overhaul the system, he explained.

“Public accountability is a part of good governance and it holds true for corporates too. Today, every miniscule aspect of life is open to public scrutiny, the corporates have a social responsibility,” former chairman of Bar Council of India and ex-Mayor D.V. Subba Rao said. Corporate Social Responsibility was not some charity handout, it was a part of the overall corporate existence. Corporates have to be socially relevant, he pointed out. The companies should realise that it was not enough to be within the permissible pollution levels but think of preventive measures to bring it below that, he added.

There was a need to strengthen shareholder democracy, the companies were accountable to the people as a majority of funds were from public savings, former Union energy secretary E.A.S. Sarma said. Transparency and disclosure were the basis of good governance, he added.

Presentations made

There were presentations on Overview of Companies 2013 by K.V.R. Sarma, professor of Law, NALSAR University, on Corporate Social Responsibility by Director-General of IICA and on Corporate Governance and Independent Director’s liability, among others. Faculty from different law schools, students and representatives of industry were present.