CHAAHAT

Better Leaders + Better Governance = Better Democracy.

2011-11-21T21:26:00.000-08:00

1. Today India strives for: Better Leaders + Better Governance = Better Democracy.

Noise Pollution - It's time for Action

2011-06-09T14:06:00.000-07:00

In continuation to our article on Noise Pollution here. It's high time that the Pollution Control boards and Police in India should wake up from the long slumber.

Just because we cannot see noise pollution doesn’t mean we can turn a blind eye to it. Environmental Noise regulation needs updating right away.

European Commissions Noise pollution report proves it’s time for action. An interesting read at:
http://www.eeb.org/index.cfm/news-events/news/commissione28099s-noise-pollution-report-proves-ite28099s-time-for-action/

Ten Questions for Congress

2011-05-24T04:15:00.000-07:00

Reproduced below is my mail to Mr. Jairam Ramesh, Coordinator, Election Related Affairs, Indian National Congress.

My criterion for evaluation of the present government.

----- Original Message -----

From: P R Chandna

To: Jairam Ramesh

Sent: Sunday, April 19, 2009 9:07 AM

Subject: TEN QUESTIONS

Dear Mr. Jairam,

In continuation to my e-mail as below, I am giving below ten questions for you to provide me with the answers.

TEN QUESTIONS

1. How would your party align with the people at bottom of the pyramid?

2. How would your party engage yourself with people at the ”Bottom of Pyramid”?

3. What are your policies to provide good education to their children?

4. What are your policies to provide jobs to them?

5. How would your party going to provide wellness facilities to them?

6. What policies of your party would provide a good quality life to them?

7. How would your party empower women

8. What are your policies to attract 400 million youth under 25 years in the country?

9. How would you align & engage with these youths?

10. How would you provide to them corruption less & transparent environment for them to develop & grow fearlessly in the country?

In case your party can answer these questions favorably, you are the wineer.

With Best Regards

P R CHANDNA

----- Original Message -----

From: P R Chandna

To: Jairam Ramesh

Sent: Saturday, April 18, 2009 5:55 PM

Subject: Re: Five Big Questions on the BJP's Manifesto of Omission

Dear Mr. Jairam Ramesh,

Good work done will always speaks. However, you need to caution yourself wrt the recent financial crisis and the reasons there off. In case you are able to address these issues then rest assured for the results. You need to keep your eyes on the " Bottom of the Pyramid" and they will take care of you.

All the best and keep it up.

With Best Regards

Your's

Pushkar

----- Original Message -----

From: Jairam Ramesh

To: prchandna@hotmail.com

Sent: Saturday, April 18, 2009 8:02 AM

Subject: Five Big Questions on the BJP's Manifesto of Omission

Dear Friend,

I hope you have had a chance to glance through our Party's manifesto that I sent you earlier.

While you make your important voting decision, I wanted to bring to your attention five big unanswered questions in BJP's election manifesto 2009.

Question 1: Will the BJP abolish the National Rural Employment Guarantee Scheme (NREGA) scheme that is providing employment to crores of poor households across the country, while generating tangible public assets?

Question 2: Why is the BJP manifesto silent on the role of the public sector? Is it because it wants to continue its policy of indiscriminate and non-transparent privatization by stealth?

Question 3: Why is the BJP's manifesto bereft on any ideas on industrial development? Is the BJP intellectually bankrupt on ideas for the industrial development of India?

Question 4: Does the BJP have any tangible plan on agricultural loan waiver beyond the vague statement .Waive Agricultural Loans. that adorn its manifesto? Or is it promising to do something that the Congress-led UPA government has already done?

Question 5: How exactly does the BJP propose to .improve upon the POTA.? What more will it do that goes beyond the strong anti-terror law . the amended UAPA . that the Congress-led UPA government has already enacted?

We believe that these questions must be answered by the BJP in order that the electorate has a clearer choice. The attached link is a short note on these unanswered questions.

5 Big questions on the BJP Manifesto

Please feel free to share this document with others, in order to generate informed discussion and decision-making.

Best Regards,
Jairam Ramesh
Coordinator, Election Related Affairs,
Lok Sabha Elections 2009, Indian National Congress
jairam@congress.org.in

जिंदगी

2011-05-23T21:25:00.001-07:00

हमने जिसे देखा, काश वो धुंध न होती |

हमने जिसे छुआ, काश वो प्रतिबिम्ब न होती |

हमने जिसे गले लगाया, काश वो रेत का पुतला न होती |

हम जिसके पीछे हो लिए, काश वो मृगतृष्णा न होती | |

Noise Pollution - “How much we ignore it”

2011-04-17T01:40:00.000-07:00

Noise pollution – it’s strange to think how much it affects every one of us whether rich or poor; young or old; men or women; drivers or pedestrian or Minster or a worker; there is hardly any escape from such ubiquitous noise pollution. Noise pollution is making NOIDA/Delhi and any other Metros audibly intolerable places to live in. I am very sure that our brethren dwellers from various other urban and semi-urban cities worldwide would also have the similar experiences and predicament to narrate. Noise pollution in our country is emerging as a major threat not only to individual health but also to social harmony and well-being and has both economic and societal consequences.

Pause and ponder how much we IGNORE IT.

A decade ago, on 14^th February 2000, the Union ministry for environment and forests (MoEF) enacted the Noise Pollution (Regulation and Control) Rules, but was hardly ever holistically implemented. The Act recognizes that there is “increasing ambient noise levels in public places from various sources, inter alia, industrial activity, construction activity, generator sets, loudspeakers, public address systems, music systems, vehicular horns and other mechanical devices” and further states that these have “deleterious effects on human health and the psychological well-being of the people”. Consequently, the government also considered it “necessary to regulate and control noise producing and generating sources with the objective of maintaining the ambient air quality standards in respect of noise”. As per this Act; the ambient air quality standards in respect of noise for different areas/zones have been specified below:

Ambient Air Quality Standards in respect of Noise

Area Code	Category of Areas/ Zone	Limits in dB(A) Leq *
Area Code	Category of Areas/ Zone	Day Time	Night Time
(A)	Industrial Area	75	70
(B)	Commercial Area	65	55
(C)	Residential Area	55	45
(D)	Silence Zone	50	40

Notes:

1. Day time shall mean from 6.00 a.m. to 10.00 p.m.

2. Night time shall mean from 10.00 p.m. to 6.00 a.m.

3. Silence zone is defined as an area comprising not less than 100 metres around hospitals, educational institutions and courts. The silence zones are zones which are declared as such by the competent authority.

4. Mixed categories of areas may be declared as one of the four above mentioned categories by the competent authority.

* dB(A) Leq denotes the time weighted average of the level of sound in decibels on scale A which is relatable to human hearing.

A - "Decibel" is a unit in which noise is measured.

"A", in dB(A) Leq, denotes the frequency weighting in the measurement of noise and corresponds to frequency response characteristics of the human ear.

Leq : It is an energy mean of the noise level, over a specified period.

The Act empowers State Governments to take measures for abatement of noise including noise emanating from vehicular movements and ensure that the existing noise levels do not exceed the ambient air quality standards specified under these rules. The authority has been made responsible for the enforcement of noise pollution control measures and the due compliance of the ambient air quality standards in respect of noise. The law also empowers the local police station officer to take action whenever complaints are received. It is, however, not often common public is compelled to come forward to approach the police.

The problem of noise pollution act presently is more concerned with how it impacts public well-being, rather than how it affects the wallet. However, there has been a study by OECD, an international organization helping governments tackle the economic, social and governance challenges of a globalized economy, which reports on the social costs from transport noise:

Lower property values.
Health care costs can spiral when dealing with loss of sleep, hearing problems or stress.
Affecting one’s work income due to poor concentration, communication difficulties or fatigue due to insufficient rest.

Ever since the liberalization of 1991, the economic activities in the country have grown at pace, which has also accelerated the growth of automobile, and maintains at double digit figures. The number of vehicle on the road have increased exponentially and contributing to intolerable noise pollution, if left uncontrolled will grow monstrously beyond the control and our society will have to pay dearly.

The decibel the noise pollution has already reached levels which doesn’t need any substantiations; these video clippings of traffic on a road having a hospital and two schools – which comes under “Silence Zone”; uploaded at the web site ‘Youtube’ at the following URLs, speaks volumes:

What is shockingly evident from above videos is that it does not boggle our minds.

We usually do not think and does not want to think about these matters.

Recently, during March 2011, MoEF has initiated an action of monitoring the noise levels in various cities and 35 numbers of real time ambient noise monitoring systems (five each in seven cities of India, viz., Delhi, Lucknow, Hyderabad, Kolkata, Mumbai, Chennai and Bangalore) have been installed in phase – I and during phase – II another 35 will be installed in this year [2011] in the same seven cities. The phase – III; 90 more monitoring stations in 25 cities, are scheduled for installation next year.

The statistically relevant result will take few more years to initiate a policy decision and the actual implementation will hopefully take another few more years and surely another decade will elapse by that time, some of us will definitely lying peacefully under the grave. It is a well known fact that almost (100%) of private buses, CVs, SUVs, etc., gets fitted with Pressure Horns immediately on taking deliveries. A simple conventional noise monitoring methods, as above, can immediately predict existing noise levels for taking an immediate prudent strong willed decision to initiate administrative actions for mitigation of ubiquitous noise pollution.

It is thus imperative from the foregoing that the individual estrangement caused by the noise pollution can have negative and harmful societal and economic consequences and it’s high time that government should take immediate steps to completely ban manufacture, supply/selling and installation of Pressure Horns in all types of motor vehicle to mitigate the nuisance of Noise Pollution and the laws are implemented as strictly as air pollution norms and ban of plastic bags are being implemented.

Furthermore, as a long term solutions awareness programmes should also be launched country wide, looping in the NGOs, media, schools & colleges and others to sensitize the public on the problems of vehicular and all other sources of noise pollution and take them out from syndrome of habitual honking and noise making.

“When I read P.R. Chandna’s article on Noise Pollution, I was cheering loudly (but still within limits).", - A Review by Dr. Charles M. Savage, President & Mentor, Knowledge Era Enterprises International, Munich,Germany
Web Pages: http://www.kee-inc.com/; http://www.linkedin.com/profile/view?id=32529&locale=en_US&trk=tyah

Click Here to Read The paper: IMCI, Delhi - 50th ABCeMag

श्रद्धा विश्वाश

2011-04-13T09:36:00.000-07:00

श्रद्धाविश्वाश - याभ्यां विना न पश्यन्ति सिद्धा: स्वान्त: स्थ्मी श्र्व्रम || - श्री रामचरितमानस

श्रद्धा और विश्वाश ही है जिनके बिना सिद्धजन अपने अन्त:करण में स्थित इश्वर को नहीं देख सकते ||

Guidelines for declaration of Eco- Senstive zones around National parks and Wildlife Sanctuaries

2011-02-15T08:52:00.000-08:00

Ministry of Environment and Forests (MoEF) has issued a Guidelines for declaration of Eco-Sensitive zones around National parks and Wildlife Sanctuaries, based on the decision taken by the National Board of Wildlife. These guidelines have been framed to facilitate the States/ Union Territory Governments for declaration of Eco-Sensitive Zones around National Parks and Wildlife Sanctuaries.

It is available at their site here. http://moef.nic.in/downloads/public-information/Guidelines%20for%20Eco-Sensitive%20Zone.pdf

Introduction of Derivative Contracts on Foreign Stock Indices

2011-01-11T03:35:00.000-08:00

SEBI has issued a circular which permit Stock Exchanges to introduce derivative contracts (Futures and Options) on foreign stock indices in the equity derivatives segment. This circular comes into force from today. It is available on SEBI website Click Here: at http://www.sebi.gov.in/circulars/2011/cirdnpd022011.pdf

Eligibility Criteria: The minimum market capitalization mandated is USD 100 billion and the stock exchange may introduce derivatives on a twenty four foreign stock index if the derivatives on that Index is available. Index should be is “broad based”, that is, the Index consists of a minimum of 10 constituent stocks and no single constituent stock has more than 25% of the weight, computed in terms of free float market capitalization, in the Index.

Trading in derivatives on Foreign Stock Indices shall be restricted to residents in India.

High Food Inflation ─ Lessons for Indian Policy Makers

2011-01-07T22:43:00.000-08:00

“Economics can be made more productive by paying greater and more explicit attention to the 'ethical' considerations that shape human behavior and judgments." Says Nobel laureate Dr. Amartya Sen.

It is almost three years now since I took a conscious decision to retire prematurely from an exceptionally fulfilling and absorbing professional career of more than thirty and half years to pursue my subjects of interests. However, the recent past high inflation has already started making holes into my pockets, forcing me to rethink on that decision and join back the services.

The latest release of the statistics on inflation blames high prices of food items, especially now on onions, led to a sharp spike in India's annual food inflation to 18.32 percent for the week ended Dec. 25, 2010, compared to 14.44 percent the week before. The fifth straight week of rise in food inflation rate, based on wholesale prices, was pushed back to double digits in the second week of December, according to weekly data released by the commerce and industry ministry.

In the recent past some of our eminent economists, policy makers and lawmakers at seminars had opined that the double digit inflation is caused by some of exogenous factors; is a worldwide phenomenon and due to present high growth rate of economy – vociferously condemning Monsoon as one of the biggest culprit (when every excuse has exhausted blame it on “God–Varuna” - is the best adage) and had suggested prophetically that inflation will be brought down to around 6% before the end of the year [2010], but did not have any foreseeable technically viable Road Map either ‘A’ or ‘B’ in place to demonstrate their tall claims. The roles of others–who are also partners in the overall Supply Chain Management (SCM) in more than dozen other states and are condemning high price rise at the top of their voice, and recently executed “Bharat Bandh” successfully…!?, reasoning steep government expenditures being the cause…, were also totally confused and wanting, and don’t have any viable alternative techno–political solutions either.

It’s high time that holistic solutions to these problems, like addressing SCM relating to agriculture – cultivation, production, storage and distribution, harnessing nexus of cartelization…; are genuinely well thought-out ‘jointly’ by all on long term basis and implemented at the earliest to ameliorate the sufferings of the “Aam Admi”.

SEBI’s Master Circular on Anti Money Laundering

2011-01-04T06:17:00.000-08:00

Securities and Exchange Board of India (SEBI) has issued Master Circular on Anti Money Laundering (AML) and Combating Financing of Terrorism (CFT) - Obligations of Intermediaries under the Prevention of Money Laundering Act, 2002 and Rules Framed there under which consolidates all the requirements/instructions issued by SEBI with regard to AML/CFT. This Circular is being issued to all the intermediaries and shall also apply to their branches and subsidiaries located abroad.

It's available at the SEBI's web site @ Click here.

This Master Circular is divided into two parts; the first part is an overview on the background and essential principles that concern combating money laundering (ML) and terrorist financing (TF). The second part provides a detailed account of the procedures and obligations to be followed by all registered intermediaries to ensure compliance with AML/CFT directives.

Master Circular: http://www.sebi.gov.in/circulars/2010/cirisdaml2010.pdf

SEBI's Master Circular for Stock Exchange/ Cash Market

2010-12-31T04:37:00.000-08:00

Securities and Exchange Board of India (SEBI) has issued Master Circular for Stock Exchange/ Cash Market
which is a compilation of the circulars issued by SEBI up to December 31, 2010 and shall come into force from the date of its issue. It's available at the SEBI's web site @ Click here.

Master Circular for Cash Market: http://www.sebi.gov.in/circulars/2010/cirmrddp42.pdf

SEBI's Master Circular for Stock Exchanges and Depositories

2010-12-31T04:13:00.000-08:00

Securities and Exchange Board of India (SEBI) has been issuing various circulars from time to time. In order to enable the users to have an access to all the applicable circulars at one place, Master Circular for Stock Exchanges and Depositories has been prepared. Its available at SEBI's web site Click Here.

This Master Circular is a compilation of the circulars issued by Market Regulation Department –Division of Market Supervision of SEBI up to December 31, 2010 and shall come into force from today.

Master Circular: http://www.sebi.gov.in/circulars/2010/cirmrddms402010.pdf

Indian Manufacturing Sector and its future for the next decade

2010-12-16T08:03:00.000-08:00

Globalisation and the economic reforms has transformed India into a world economic power. India has put up an impressive growth performance in the past two decades and yet steered clear of the brunt of the recent global financial crises. The severity and worldwide impact of the global downturn was in many ways an unprecedented event that wrecked economies around the world for more than two years. Indian economy was also no exception and has witnessed a slowdown. However, Indian economy showed greater resilience than most others and was amongst the first few to emerge from the downturn. India has weathered the global economic crisis better than other countries, and for the current year GDP is estimated to grow @ 8.5% and forecasted @ 9.0% in 2011-12. This is based on the expectation of a normal SW monsoon in 2011-12. Current indications appear to strongly endorse the Meteorological Department’s assessment that the current year (2010-11) will have a normal monsoon. The rate of GDP growths for the 2008-09 (Quick Estimates), 2009-10 (Revised) and 2010-11 (Forecast) are given in the table below.

Rate of Growth at factor cost (per cent):

	2008-09	2009-10	2010-11 (E)
Agriculture	1.6	0.2	4.5
Manufacturing	3.2	10.8	10
Services	9.8	8.5	8.9
GDP	6.7	7.4	8.5

Source: PMEAC July 2010

The Indian economy has experienced some striking changes during the past two decades. The average annual growth in per capita income in real Rupees has risen from 2.5 per cent during 1981–88 to 7 per cent during 2003–09. These past two decades, have seen a significant decline in poverty. Based on the Planning Commission, the proportion of the population living below the official poverty line declined from 39 per cent in 1987–88 to 27.5 per cent in 2004–05. It is essential to sustain the pace of growth and to achieve even higher rate of development so that the fruits of liberalization and economic progress percolate down to the poorest sections of the society. It is, therefore, imperative that a double digit GDP growth is achieved and sustained on long term basis. In order, to achieve the double digit growth rate, it is important that agriculture will have to grow at 4%, manufacturing at 12% and services at 10.5%.

So how does India achieve these anticipated stellar rates of growth?

The situation of the manufacturing sector in India is a cause of concern. India has not been able to fully leverage the opportunities provided by the dynamics of the world economy. A large section of the Indian population still remains dependent on agriculture, which employs more than half of India’s workforce and the output share of this category of sectors is only 19% of the GDP (at factor cost), implying that a very large section of the population was primarily dependent on a very small share of the GDP. India has simply not witnessed the kind of transformation—from a traditional, agrarian structure to a modern, industrial economy—that has been seen in virtually all rapidly growing economies. Therefore, going forward, the central challenge the country faces is to achieve the transfer of its workforce from agriculture to other, more productive activities, namely, manufacturing industries.

Over the next decade, India has to create gainful employment opportunities for a large section of its population, with varying degrees of skills and qualifications. The manufacturing sector is the one which would have to provide for this employment creation initiative and would have to ensure that the growth model of India is sustainable.

Nishkama Karma - Relevance in Modern Times

2010-11-10T06:14:00.000-08:00

निष्काम कर्म

कर्मण्येवाधिकारस्ते मा फलेसु कदाचन |
मा कर्मफलाहेतुभूर्र्मा ते सँगोअस्त्व्कर्मणि ||

- श्रीमदभगवद्गीता - २ | ४७

TRANSLATIONS

“You have a right to perform your prescribed duty, but you are not entitled to the fruits of action. Never consider yourself the cause of the results of your activities, and never be attached to not doing your duty.”

─ Swami Prabhupada

“To action alone hast thou a right and never at all to its fruits; let not the fruits of action be thy motive; neither let there be motive in thee any attachment to inaction.”

─ S Radhakrishnan

“You have control over action alone, never over its fruits. Live not for the fruits of action, nor attach yourself to inaction.”

─ Swami Mahesh Yogi

“Thy right is to work only, but never to its fruits; let not the fruit-of-action be thy motive, nor let thy attachment be to inaction.”

─ Swami Chinmayananda

“Your right is to work only; but never to the fruits thereof. Be not the producer of the fruits of [your] actions; neither let your attachment be towards inaction.”

─ Swami Swarupananda

“Your right is to work only and never to the fruits thereof. Do not be the cause of fruit of action; nor let your attachment be to inaction.”

─ Geeta Press

“Be intent on action not on the fruits of action; avoid attraction to the fruits and attachment to inaction.”

─ Barbara Stoler Miller

The modern era - often said these are testing times; of extreme materialism, wrenching changes, contradictions and despondency all around is wielding mental & physical pressures and leading us to delusions, continual physical sufferings and mental agonies ─ there is a need to heed the call of “Nishkama Karma” ─ “Be intent on action not on the fruits of action; avoiding attraction to the fruits and attachment to inaction.” – Bhagvad Gita 2:47

The primary ‘Hindu’ scriptures; Vedas; four in numbers ─ Rig Veda, Yajur Veda, Sama Veda and Atharva Veda ─ the treasure trove of Hindu religion, tradition and culture containing codes of Dharma, has implied acknowledging one’s righteous duty and acting resolutely accordingly, were taught by God Brahma (Nabhija – One born from the Vishnu’s navel) Himself thousands of years ago and have been preserved carefully and handed over to us.

These scriptures contain directives to make a man’s life happy and urge him to abide by the ‘Law of Virtue’. The message therein provides the inner strength making a person adopt a positive attitude. They are absolutely essential for building moral integrity and being eternal, the norms are applicable to all persons even to this day and shall do so time immemorially. The study of them is absolutely indispensable, would cleanse the mind and make it pure, help mould character and aid achieve mental equanimity and humanity’s happiness and prosperity will be assured.

The contents in the Vedas have been broadly divided into three branches (Kanda); namely, path of action (Karma), knowledge (Gnana) and devotion (Upasana), following which one can reach the ultimate goal. The Karma prescribed the conducts one should do and explains how by observing them, materialistic tendencies can be wiped out. Their performance will bring prosperity not only for individual but the entire universe. These righteous conducts alone can keep society in a disciplined manner.

This moral insight has been stipulated famously in Bhagvad Gita as ‘Nishkama Karma’ or ‘disinterested action’ or ‘work for work sake/Duty for duty's sake’. It counsels about the “duty to act, but not the right to claim personal fruits from it”. When an act has been performed by an individual for the sake of one’s duty rather than for a personal reward from it, the person is likely to do the right thing – act as per his Dharma, and thus develop tremendous character.

The Nishkama Karma (disinterested action) approach to action can prevent unethical motives on one hand and promote the ethical ones on other. Simultaneously, this process dovetails seamlessly into the Karmic theory ─ egoless, disinterested action will be ethical, a good cause, and hence a productive of wholesome effect. The mix of three ‘Gunas’ could influence one’s ability for Nishkama Karma but preponderance of Rajas or Tamas hinders rightful actions or distract one from his Dharma. The ethical quality of decisions tends to be endangered when the desire driven lower self clamors for its gratification from duty. These insistence clouds one’s sense of right and wrong, of balance, of proportions breeds unethicality and inefficiency. Mother Teresa, Mahatma Gandhi, and Martin Luther King, are revered for their selfless services toward mankind and are commonly referred to as ‘Karma Yogis’ of modern times.

Across the very rich and diverse religious and philosophical history of India throughout the past thousands of years, Nishkama Karma has been interpreted more or less as an immutable way of life. Likewise, there is enough for our present day leaders in all walks of life to learn from these ancient scriptures, which have as much relevance today as it would have been two millennium years ago.

RTI ACT 2005 – A best thing that has ever happened to – We Indians:

2010-09-25T19:38:00.000-07:00

Right to Information act – a best thing that has ever happened to, we Indians: Let us not be frivolous or mischievous in our deeds to damage it irreversibly forever.

I recently had the first hand and my first ever experience - how it (RTI Act) had punctured the imperious, macho and Machiavellians attitudes of the Navratna PSU company’s PIO & the HR head – in fact the whole ‘Board of Directors’ were over zealously supporting it behind the scene. One of the incidences, during these proceedings, which touched the most, was a ‘Muslim Judge’ using Hindu sentiments to make the message through to these authoritative and impervious establishment who audaciously questioned the simple and legitimate request for the information “… [Appellant] will tear it and immerse it in the ‘Ganges’…” – a most sacred river to us Hindus. Every Hindu desires that his/ her ashes after the cremations are immersed in the holy river “Ganges” to attain salvation - “Moksha”. The avoidance of logical and reasoned justification often comes from the top. Reticence has always appealed to those who are powerful public authority, usually unwilling to scrutinize the basis of their policies essentially fearing exposures and later ridiculed for being subverting rights and liberties of others. It is hoped that these Public Authorities would get encouraged from this example, amend their arbitrariness and condemnable actions.

The judgment elated a great satisfaction and happiness for its ramification to advance justice to the whole community of employees of government – state as well as central and the PSUs; though initially it was being pursued solely for the purpose of self interest to unearth an information – to know what really had conspired to inflict injustice and discrimination. The real motivation was the inequities and the subjugations suffered, consequently a good reason to resent with a perceivable remediable injustice, with an exemplary mechanism – the RTI Act, already in place to overcome this injustice.

It is also desirous that the Act is protected from being “tinkered” by vested interests. In the recent past, there had been a vigorous campaign of “Tinkering and diluting” the Act by these interests, which was very timely put to a stop by the Hon'ble Chairperson of UPA Madam Sonia Gandhi, who wrote back to Dr. Man Mohan Singh the Hon’ble PM of India on 10th November 2009:

“The RTI Act… as one of the most effective pieces of legislation, as instrument that has empowered people and made government more responsive… Much has been achieved in these initial years and while there are still problems of implementations, RTI has begun to change the lives of our people and the ways of governance in the country. It will of course take time before the momentum generated by the Acts makes for greater transparency and accountability in the structure of the government… It is important, therefore, that we adhere to its original aims and refrain from accepting or introducing changes in the legislations on the way it is implemented that would dilute its purpose”

It is imperative that the short comings like lack of public awareness about the RTI Act; untrained information officers/appellant authorities, harassment, intimidation, threatening and killing of RTI activists be addressed immediately by our law makers whole heartedly.

The Landmark Decision is available at the Central Information Commissioners (CIC) web site @ http://rti.india.gov.in/cic_decisions/5973_IC_A__2010_M_42690.pdf

New Zealand’s Code of Professional Conduct for Authorized Financial Advisers – Empowerment of Minority Investors

2010-09-20T22:42:00.000-07:00

New Zealand’s Minister of Commerce, Hon Simon Power today approved the Code of Professional Conduct for Authorized Financial Advisers.

"This is a significant step towards the full implementation of the Financial Advisers regulatory regime and the Government's goal to rebuild investor confidence in our financial markets," Mr Power said. The approval means the Commissioner for Financial Advisers can now determine when the code can come into effect.

The regime is governed by two pieces of legislation - the Financial Advisers Act and Financial Service Providers Acts.

The two Acts, which will be fully in force by July next year, require all financial service providers - including financial advisers - to be on a public register and, if they provide retail services, to belong to an approved dispute resolution scheme.

Many of the minority investors had lost large sums of money because of the poor investment advice they've received.

The Code of Professional Conduct establishes 18 standards to ensure all authorised financial advisers meet the minimum standards for ethical behaviour, client care, knowledge, skills and competence, and continuing professional development. The Code is available at http://www.financialadvisercode.govt.nz/

Sustainable Development of Non-Ferrous Metal Extraction Industries in India

2010-08-25T04:10:00.000-07:00

It was heartening to read the news article in “The Economic Times” dated 24th August 2010 titled “Jairam puts last nail in Vedanta’s India plan”.
It's an excellent example of Good governance on the part of the MoEF and should act as a deterrent for all others who had been taking, all these years, government clearances as fait accompli and should bring in radical changes in the[ir] company’s attitudes, thinking and rightful actions towards sustainable developments in the country. The companies need to shun away from the unregulated and unbridled greed for material gains at the cost of damaging of our eco-system irreversibly for the next generation to suffer and curse our generations.

This should now teach the[m] company a lesson and prevent them from further damage to our environment, by way of polluting our aquifers, flora and fauna from contamination from Cadmium, Mercury, Nickel, Cobalt, Selenium, Vanadium and other heavy metals, (it need not have to be elaborated here on the harmful effects of these metals, on the ecology and on the human beings, which is already well documented); normally co-occur and get simultaneously extracted in varying proportions along with the mining, mineral dressing and extraction of Zinc, Lead, Copper, Aluminium, etc., and are being discharged unregulated to our ecological system.

The Environment Ministry has taken a landmark step forward in raising the bar for metallurgical, chemical, e-waste, and all other highly polluting industries to take up sustainability development as a way of life and there are no - any short cuts.

This movement of tribal from Niyamgiri, has demonstrated that power is not back with the tribal, it has been taken back by them. The lessons from this peaceful Dongria Kondh movement should encourage Vedanta to revisit some of their Sidhantas – and align with the “Ten Principles of UN Global Compact”.

Is Cap on numbers an Independent Directors can sit on Companies a must?

2010-08-24T01:02:00.000-07:00

It is heartening to know that, SEBI is considering a proposal to limit the number of company boards that an independent director can sit on. The proposal aims to ensure that independent directors get enough time to analyze the agenda of the board meetings and make meaningful contributions during board meetings. In order to give enough attention to all business details, independent directors do need a considerable amount of time.

Voluntary guidelines issued by the Ministry of Corporate Affairs say that an independent director should not serve on the boards of more than seven listed companies. However, SEBI should consider including unlisted, holding, foreign and others companies as well in this number so as to increase effective engagement of IDs on the Boards.

Furthermore, in case, a law or consulting firm does advisory job for a company, having a partner from there as independent director on the Board of said company, which is not desirable, as it could lead to “conflict of interest”.

Read the full news article on Economic Times Click Here : http://economictimes.indiatimes.com/markets/indices--regulation/SEBI-proposal-Independent-directors-face-board-cap/articleshow/6424040.cms

Read our views on the subject on earlier post @ INDIAN CORPORATE LAW -Click Here: https://www.blogger.com/comment.g?blogID=3202774368551476669&postID=2210680351521557977

EMPOWERMENT OF WHISTLEBLOWERS – PART – II

2010-08-11T04:48:00.000-07:00

The first part of this article was published on 14th March 2010. To read the full article Click Here.
Public Interest Disclosure (Protection of Information) Bill - 2010

It is heartening to know, after a long wait of around seven years of the first brutal killing of an engineer Mr. Satyendra Dubey in November 2003, who had blew the whistle in the case of unbridled corruption in NHAI’s Golden Quadrilateral project, and two years later by atrocious killing of an IOC officer Mr. Manjunath Shanmugam and to present many other Right to Information activists by anti-socials and vested interests; that the Cabinet has recently cleared the Public Interest Disclosure (Protection of Information) Bill - 2010, and is likely to be tabled during ongoing session of the Parliament.

India all these years does not have any law to protect and reward whistleblowers. Several countries worldwide have already put in place laws to protect whistleblowers. However, the level of protection and the way in which the law operates differs from country to country. For instance, the US was one of the earliest to have the Whistleblower Protection Act of 1989, while the UK has the Public Interest Disclosure Act of 1998, and Norway has a similar law in place since January 2007.

Shockingly, the issue of protection of whistleblower in India had been dragging for all these years, as the country leisurely debated and struggled with the problem of resolving the contradiction of a whistleblower’s law with the provisions of the Official Secrets Act; unfortunately the whistleblowers continued to be atrociously coerced, intimidated, threatened, victimized, and being cruelly killed in retaliation by the perpetuators of frauds, powerful, imperious and Machiavellians individuals and company heads/CEOs, mafias, to satiate their unbridled greed. In the latest incident of last month, activist Mr. Amit Jethwa was shot outside the high court in Ahmedabad, while he had exposed illegal mining in the Gir forest area in the state of Gujarat.

The proposed law has provisions to prevent victimization or disciplinary action against those who expose corruption in the government and will cover central, state and public sector employees. As per the bill, the onus will be on the Central Vigilance Commission (CVC), who would be designated as the competent authority for complaints, would have the powers of a civil court, including powers to summon anybody, order police investigation and provide security to the whistleblower and to protect the identity of the citizens who provide information about the misuse of governmental authority and funds. It is expected to encourage disclosure of information in public interest. According to the bill, if a person making a disclosure is victimized and his or her identity is revealed, the whistleblower’s superiors will be held liable. There are provisions for a fine and other penalties — a punishment is set at up to 3 years in prison or a fine of up to Rs. 50,000 or both; if a whistleblower is found to be “punished” for exposing wrongdoing. These penalties and imprisonments could possibly have been higher so as to have efficacy of high deterrence, along the lines of the Sarbanes-Oxley Act (SOX) and Dodd- Frank Act-2010.

However, the proposed law neither has provisions for encouraging whistle blowing by providing for financial incentives; nor deals with corporate whistleblowers and does not extend its jurisdiction to the private sector. India Inc ought to have learned lessons after the experience of the massive fraud at Satyam as was outlined in my article: “Satyam Lessons and Corporate Governance Reforms”. To read the full article Click here.

“Dodd-Frank Wall Street Reform and Consumer Protection Act -2010”

The recently enacted “Dodd-Frank Wall Street Reform and Consumer Protection Act -2010” in USA, however, creates an elaborate new system of financial incentives to encourage whistleblowers to come forward to the SEC with information about securities law violations.

The new incentive offered to whistleblowers in this Act is the opportunity to obtain a substantial cash reward in the event that information they provide leads to an enforcement action in which the SEC obtains a monetary sanction (defined to include penalties, disgorgement and interest) totaling at least $1 million. The Section 922 provides that the SEC “shall pay an award” to the whistleblower of between 10 and 30 percent of the monetary sanctions imposed in the SEC enforcement action

Awards payments are to be made from a newly created “Securities and Exchange Commission Investor Protection Fund.” The Fund is to be built up (to a ceiling of $300 million) by depositing monetary sanctions obtained by the Commission in its enforcement actions generally, to the extent that those funds are not distributed to victims. In addition to paying awards to whistleblowers, this $300 million will also be available to fund the activities of the SEC’s Inspector General.

The Section 922 also provides significantly enhanced remedies for whistleblowers who believe they have suffered retaliation by their employers, including expanded private rights of action and the ability to obtain awards of back pay. In view of these provisions, the Act will allow as most effective deterrent for companies to prevent any mistreatment of whistleblowers. Strong protections for whistleblowers will be more important than ever, in light of the anti-retaliation provisions of Section 922.

In the post-Enron era, whistle blowing – the act of exposing fraud, waste, abuse or other misbehavior in a company or organization – is on the rise. In the United States, for example, more than US $8 billion has been recovered as a direct result of whistleblowers’ actions. Whistle blowing can be an effective tool to deter and detect corruption both in the private and public sectors and it provides better information flows, which increase the chances of successful prosecutions in corruption cases. But in order for whistle blowing to be an effective tool to fight corruption, legislation and clear processes are essential.

The whistle blowing, as an internal control mechanism is yet to come of age in our country. Whistle blowing, in India, still continues to be perceived by many as acts; which are not constructive, a matter of personal vendetta or revenge, intention to embarrass the organization, and so on so forth. On the other hand, the whistleblowers have often faced reprisal, greatly suffered and endured, often for many years, after the complaints have gone unheeded. One of the reasons attributable to this is poor levels of confidence in the ability of the legal and regulatory environment to ensure promised protection against retaliation.

For developing a better governance practices in the country, it is imperative to empower and encourage the whistle blowers, the policy concerning them need to be comprehensive rather than applicable to one set of people only and be made mandatory for one and all, with clear guidelines for prosecuting intimidation of or retaliation against the complainants, including imposition of fines/ penalties for frivolous or mischievous complaints and fast-track disposal of cases.

References: Whistleblower Bill 2010 http://persmin.nic.in/EmployeesCorner/Acts_Rules/DisclosureBill/DisclosureBill_2010_Eng.pdf

‘Conflict Minerals’ and the Ongoing Crisis in Congo – Transparency for Extraction & Hi -Tech Industries

2010-07-07T11:09:00.000-07:00

What are the 'conflict minerals'? What is the relation between the Metals & Hi-Technology Industries and the crisis in DR Congo? WHO IS FUNDING THE CRISIS??? WE DO!!!

How can we pursue the agenda to end the trade in 'conflict minerals' and eventually the crisis in Congo?

Multinational Corporations from all over the world, engaged in mineral extraction, trading, smelting, refining, and end use electronics manufacturing industries: computers, laptops, MP3 - portable music players, mobiles, Smart phones, digital cameras, etc., are illicitly buying “Conflict Minerals”, namely, Coltan (which is a key mineral used in the making of cell phones and 64% of the world’s known Coltan reserves occur in the DR Congo),Tin, Tungsten, Gold, etc., oblivious of the facts that the proceeds from these activities are being utilized for funding the various militant groups, who are perpetuating conflicts, resulting in particularly sexual gender based - violence and other human rights abuses in North and South Kivu in the eastern region of the Democratic Republic of Congo (DR Congo).

The DR Congo is rich in these minerals that make our daily use electronic gadgets work. The minerals mined in Eastern DR Congo pass through the hands of numerous middlemen, as they are shipped out of DR Congo, through neighboring countries such as Rwanda, Burundi, etc., to the various processing plants all throughout the world. There are no international mechanisms yet in place to regulate these clandestine trades, therefore allowing various armed factions, many with appalling human rights records, unfettered access to world markets, in order to generate funds.

These “conflict minerals” are one of the main drivers of a war has claimed around five and half million lives as of April 2007 with the toll mounting by 45,000 a month, according to a study by the International Rescue Committee and more than thousands of women are being raped every month in the DR Congo and is widely described as the rape capital of the world. Furthermore, the conflict areas also appear to have limited attention to poverty, food securities, health, safety and environmental protection, which may lead to additional negative legacies.

"Directly or indirectly," says Carina Tertsakian, DR Congo team leader for Global Witness, "everyone involved in this conflict is benefitting from the trade in these resources except the Congolese people who are the victims of the war." The mining conglomerates have to come under political pressure, she argues. "They aren't likely to stop what they are doing overnight because of an attack of conscience." But choking off this flow of funds is not just about putting pressure on multinational corporations but also about forcing governments in the area, through firm diplomacy and tight financial screws, to uphold protocols and peace processes in order to be in good odor to do legitimate business in the first place. Says Tertsakian, "The economic aspects have been a driving force in this war from the very beginning."

The situation in DR Congo is a good example of the so-called “natural resource curse”, with an abundance of high-value natural resources, it has slower economic growth and an armed conflict for the past few decades. The resource curse represents the pre-eminent obstacle to democracy and development in this country. There is no magic wand to resolve the problem; there are a range of measures that all nations including India – besides deputing Indian soldiers for Peace Keeping, all the nations can take to increase accountability and transparency.

In the recent past, efforts had been made to counteract similar process applying pressures externally by instituting sanctions against commodities originating from conflict zones, namely, the Kimberly Process in 2003. It is a joint governments, industry and civil society initiative to regulate the diamond market and stem the flow of so-called “blood diamonds”, which was a success story in Angola.

One of the people pushing this grassroots campaign on “conflict minerals” is Lisa Shannon (Women’s Rights Activist / Author) founded in 2006 the first national grassroots effort to raise awareness and funds for women in the DR Congo through her project Run for Congo Women. She had seen an Oprah show on DR Congo, and now she has devoted her life - making a difference for Congolese women.

The conflict minerals campaign is now a grass-roots movement and NGOs (like, Enough), are pressurizing companies, like, Apple, Intel and Research in Motion etc., using social media network like, Facebook, Twitter, and YouTube to keep these “conflict minerals” out of high-tech supply chains. A year ago most members of US Congress hadn't even heard of conflict minerals. These thousands of Americans wrote on US senators’ Facebook pages and requesting them to support the Brownback amendment which is currently a part of the “Dodd-Frank Wall Street reform bill 2010” that addressed 'conflict minerals' from Congo, the new blood diamonds. Special interests lobbied against the provision, arguing that it was too expensive and would unfairly undercut American business.

However, the majority of the companies that use these minerals are listed on U.S. stock exchanges, including foreign companies, so it would actually set a level playing field for industry. Moreover, U.S. regulations will help set global standards, and the audit provision would set a common standard for minerals supply and smelting companies around the world. As a result of intensive public pressure, a group of companies led by Intel and Motorola have initiated actions and now developing a process to audit origins of tantalum in supply chains. Moreover, the audit process is inexpensive: the audits will only cost one penny per product, according to the Enough Project, which says the figure originated with the industry.

Speaking to BusinessGreen.com, Zoe McMahon, supply chain social and environmental responsibility manager at IT giant HP, revealed that a group of companies working under the banner of the Electronics Industry Citizenship Coalition (EICC) is working on the finishing touches to a certification scheme that should help firms identify from which mines minerals and metals such as Coltan, Tin and Tantalum have been sourced.

"We are going to introduce a scheme that will audit the metal process firms and identify those that have due diligence in place that can assure customers that they have not been mined from sources involved in the conflict in the DRC, " she said. "We have tested the processes with a number of tantalum smelters and are ready to move within the next six months."

The Congressman Jim McDermott has championed the conflict minerals issue in USA, authoring the Congo Minerals Trade Act (H.R. 4128). In June, 2009, Senator Sam Brownback introduced to require electronics companies to verify and disclose their sources of Cassiterite (Tin), Wolframite (Tungten), and Coltan (Tantalum) or derivatives of these minerals; commonly used in cell phones, laptop computers and other popular electronic devices. Under the bill, U.S. Commerce Department - sanctioned auditors would audit mineral mines declaring them “conflict free or not”. These mines would be mapped to show which ones fund conflict. Furthermore, importers would have to certify whether they were importing conflict minerals – companies that do import conflict minerals will be reported to Congress by the United States Trade Representative. This bill would commit the US government to address the mineral exploitation that underpins the violence in eastern Congo. Bill requires U.S. companies to annually disclose as part of their filings to the Securities and Exchange Commission (SEC) information about the source of minerals used for their products.

The Wall Street Reform and Consumer Protection Act 2010 includes the following major provisions for conflict minerals under Sections 1502 & 1504:

“TRANSPARENCY FOR EXTRACTION INDUSTRY

Public Disclosure: Requires public disclosure to the SEC of payments made to the U.S. and foreign governments relating to the commercial development of oil, natural gas, and minerals.

SEC Filing Disclosure: The SEC must require those engaged in the commercial development of oil, natural gas, or minerals to include information about payments they or their subsidiaries, partners or affiliates have made to the US or a foreign government for such development in an annual report and post this information online.

Congo Conflict Minerals:

Manufacturers Disclosure: Requires those who file with the SEC and use minerals originating in the Democratic Republic of Congo in manufacturing to disclose measures taken to exercise due diligence on the source and chain of custody of the materials and the products manufactured.

Illicit Minerals Trade Strategy: Requires the State Department to submit a strategy to address the illicit minerals trade in the region and a map to address links between conflict minerals and armed groups and establish a baseline against which to judge effectiveness.

Deposit Insurance Reforms: Permanent increase in deposit insurance for banks, thrifts and credit unions to $250,000, retroactive to January 1, 2008.

Restricts US Funds for Foreign Governments: Requires the Administration to evaluate proposed loans by the IMF to a middle-income country if that country's public debt exceeds its annual Gross Domestic Product, and oppose loans unlikely to be repaid.”

The Act was passed by a bipartisan vote of 237 to 192. The legislation is now under consideration in the Senate and hopefully the stage is all set for the Senate to clear it before end of July 2010.

Legislation alone will not end the conflict in eastern DR Congo, but this bill would provide a crucial step toward the creation of a practical and enforceable means to ensure that the trade in Congolese minerals contributes to peace rather than war. This bill would also serves as a useful precedent for other countries like India to take initiatives to deliberate, discuss and legislate a similar act for Indian based companies, who may be fuelling these conflicts in eastern DR Congo. The goal should be to stem the flow of illicit minerals, promote legitimate trade, protect those living in artisanal mining communities, good governance, political stability, human rights, access to opportunity and unlocking of the economic potential of this resource-rich lands of the DR Congo and of the Great Lakes region.

The most effective way to achieve this goal would be to ensure transparency in the consumer electronics supply chain to certify products as “Conflict-Free” based on ‘Due Diligence’ study reports, which have been duly verified by an independent auditor. Furthermore, awareness programmes are conducted regularly jointly with civil societies, NGOs, etc., for the public to purchase only the “Conflict–Free” products.

Padma Awards for Sri Satyendra Dubey and Sri Manjunath Shanmugam Petition

2010-07-05T02:08:00.000-07:00

Padma Awards for Sri Satyendra Dubey and Sri Manjunath Shanmugam Petition

Wall Street Reforms and Consumer Protections Act 2010

2010-07-03T06:01:00.000-07:00

There was an eruption of financial crisis in 2007-08, which originated in the USA and spread to other advanced economies. The financial crisis has seriously affected the growth prospects of emerging market and developing economies, also resulting in recession or slows down in growth in almost all economies of the world. Many of them are still struggling to roll back on tracks, despite the efforts of the central banks and governments of these countries. US had faced the worst financial crisis since the Great Depression of 1930. Millions had lost their jobs, businesses had failed, housing prices had dropped, and savings were wiped out.
The current economic crisis has eroded public and investor confidence in the governance. American corporations and the government had to take swift action to restore the public trust and to restore responsibility and accountability in their financial system to give them confidence that there is a system in place that works for and protects them.

With the foregoing premises in mind, the Obama government took various initiatives and recently, U.S. House and Senate lawmakers released the final text of sweeping financial regulatory legislation which has been dubbed the “Dodd-Frank Wall Street Reform and Consumer Protection Act” after the chief negotiators for each chamber, Senator Christopher Dodd and Rep. Barney Frank.
The Wall Street Reform and Consumer Protection Act include the following major provisions:

“Consumer Protections: Creates the Consumer Financial Protection Agency (CFPA), a new, independent federal agency solely devoted to protecting Americans from unfair and abusive financial products and services.

Financial Stability Council: Creates an inter-agency oversight council that will identify and regulate financial firms that are so large, interconnected, or risky that their collapse would put the entire financial system at risk. These systemically risky firms will be subject to heightened oversight, standards, and regulation.

Dissolution Authority and Ending “Too Big to Fail”: Establishes an orderly process for dismantling large, failing financial institutions like AIG or Lehman Brothers in a way that ends bailouts, protects taxpayers, and prevents contagion to the rest of the financial system.

Executive Compensation: Gives shareholders a “say on pay” – an advisory vote on pay practices including executive compensation and golden parachutes. It also enables regulators to ban inappropriate or imprudently risky compensation practices, and it requires financial firms to disclose any compensation structures that include incentive-based elements.

Investor Protections: Strengthens the SEC’s powers so that it can better protect investors and regulate the nation’s securities markets. It responds to the failures to detect the Madoff and Stanford Financial frauds by ordering a study of the entire securities industry that will identify needed reforms and force the SEC and other entities to further improve investor protection.

Reward Tipsters and Protect Whistleblowers: A new Investor Protection Fund will create incentives to identify wrongdoing in the securities markets and reward individuals whose information leads to successful enforcement actions. This fund will also pay for educational initiatives designed to help investors protect themselves against securities fraud. Whistleblowers will be better protected from retaliation as well.

Regulation of Derivatives: Regulates, for the first time ever, the over-the-counter (OTC) derivatives marketplace. Under the bill, all standardized swap transactions between dealers and “major swap participants” would have to be cleared and traded on an exchange or electronic platform. The bill defines a major swap participant as anyone that maintains a substantial net position in swaps, exclusive of hedging for commercial risk, or whose positions create such significant exposure to others that it requires monitoring.

Mortgage Reform and Anti-Predatory Lending: Would incorporate the tough mortgage reform and anti-predatory lending bill the House passed earlier this year. The legislation outlaws many of the egregious industry practices that marked the subprime lending boom, and it would ensure that mortgage lenders make loans that benefit the consumer. It would establish a simple standard for all home loans: institutions must ensure that borrowers can repay the loans they are sold.

Reform of Credit Rating Agencies: Addresses the role that credit rating agencies played in the economic crisis, and takes strong steps to reduce conflicts of interest, reduce market reliance on credit rating agencies, and impose a liability standard on the agencies.

Hedge Fund, Private Equity and Private Pools of Capital Registration: Fills a regulatory hole that allows hedge funds and their advisors to escape any and all regulation. This bill requires almost all advisers to private pools of capital to register with the SEC, and they will be subject to systemic risk regulation by the Financial Stability regulator.

Office of Insurance: Creates a Federal Insurance Office that will monitor all aspects of the insurance industry, including identifying issues or gaps in the regulation of insurers that could contribute to a systemic crisis and undermine the entire financial system."

"After losing eight million jobs and trillions of dollars in wealth, the American people are finally getting the Wall Street reform they have demanded from Washington," the Congressman Tim Bishop voted the bill and said. "Reforming financial services is a critical step in our ongoing effort to create jobs and build a sound economy that rewards healthy risk-taking and long-term growth."

The Act was passed by a bipartisan vote of 237 to 192. The legislation is now under consideration in the Senate and it is hoped that the stage is all set for the Senate to clear it.

Click Here for resource to the Wall Street Reforms and Consumer Protections Act: http://financialservices.house.gov/Key_Issues/Financial_Regulatory_Reform/Financial_Regulatory_Reform062910.html
Keywords: Financial Reforms, Create a Sound Economic Foundation to Grow Jobs, Protect Consumers, Rein in Wall Street, End Too Big to Fail, Prevent Another Financial Crisis

UK Corporate Governance Code June 2010 (formerly the Combined Code)

2010-06-29T03:17:00.000-07:00

The UK Corporate Governance Code (formerly the Combined Code) new edition of the Code which will apply to financial years beginning on or after 29 June 2010, that is, today onwards, sets out standards of good practice in relation to board leadership and effectiveness, remuneration, accountability and relations with shareholders.
All companies with a Premium Listing of equity shares in the UK are required under the Listing Rules to report on how they have applied the Combined Code in their annual report and accounts.
The Code contains broad principles and more specific provisions.
Listed companies are required to report on how they have applied the main principles of the Code, and either to confirm that they have complied with the Code's provisions or - where they have not - to provide an explanation.
• UK Corporate Governance Code June 2010: http://www.frc.org.uk/documents/pagemanager/Corporate_Governance/UK%20Corp%20Gov%20Code%20June%202010.pdf

• Listing Rules: http://fsahandbook.info/FSA/html/handbook/LR/9/8

UN Global Compact (UNGC) Management Model

2010-06-18T12:51:00.000-07:00

United Nations Updates Guidelines to improve Corporate Social Responsibility (CSR) by the Corporate

The United Nations has updated its guidelines for socially responsible businesses to make it easier for firms to implement environmentally sustainable and ethical policies. To read the full “UN Global Compact Management Model” Click Here : http://www.unglobalcompact.org/docs/news_events/9.1_news_archives/2010_06_17/UN_Global_Compact_Management_Model.pdf

The new guidelines aims to take account of the evolution of corporate social responsibility (CSR) practice since the scheme was initially launched in 2004. More than 5,000 companies have signed up to the compact, including high-profile blue chip firms such as Rio Tinto, Unilever, Infosys, and HSBC. Companies joining the group pledge to adhere to 10 principles [1] which require them to support human rights, promote good labour standards, display environmental responsibility and tackle corruption. However, despite its popularity, many firms have found it difficult to translate the principles into their business practices.

The Model represents management thinking with respect to translating the UN Global Compact’s principles into practice. Importantly, it draws on widely accepted and understood management practices, but is organized and orientated around maximizing corporate sustainability performance. It sets out a basic six-step programme detailing how companies can ensure they are operating in line with the UNGC's core principles. It focuses on the steps companies take once having made the commitment to the UN Global Compact. In addition, it is a dynamic and continuous process designed to assist companies in achieving higher levels of performance over time.These six steps are:

1. Commit
2. Assess
3. Define
4. Implement
5. Measure
6. Communicate

It is hoped that through the application of this Management Model, companies will attain ever-higher levels of performance and, in the process, generate real and lasting value for their business, stakeholders, and society at large.

Note [1]: The Ten Principles of the United Nations Global Compact

Human rights
Principle 1: Businesses should support and respect the protection of internationally proclaimed human rights;
Principle 2: Make sure that they are not complicit in human rights abuses.
Labour Standards
Principle 3: Businesses should uphold the freedom of association and the effective recognition of the right to collective bargaining;
Principle 4: The elimination of all forms of forced and compulsory labour;
Principle 5: The effective abolition of child labour;
Principle 6: The elimination of discrimination in respect of employment and occupation.
Environment
Principle 7: Businesses should support a precautionary approach to environmental challenges;
Principle 8: Undertake initiatives to promote greater environmental responsibility;
Principle 9: Encourage the development and diffusion of environmentally friendly technologies.
Anti-corruption
Principle 10: Businesses should work against corruption in all its forms, including extortion and bribery.

Right to information key to Democracy

2010-06-15T02:31:00.000-07:00

Right to information key to democracy – An Editorial published by the “Economic Times dated” 15th June 2010 Click Here to read the full article.

In this regards, I would like to quote below what Hon'ble Chairperson of UPA Madam Sonia Gandhi wrote to Dr. Man Mohan Singh Hon’ble PM of India on 10th November 2009.
Quote:
The RTI… as one of the most effective pieces of legislation, as instrument that has empowered people and made government more responsive… Much has been achieved in these initial years and while there are still problems of implementations, RTI has begun to change the lives of our people and the ways of governance in the country. It will of course take time before the momentum generated by the Acts makes for greater transparency and accountability in the structure of the government… It is important, therefore, that we adhere to its original aims and refrain from accepting or introducing changes in the legislations on the way it is implemented that would dilute its purpose”
Unquote
The above speaks volumes about tinkering with the RTI. It is, therefore, imperative that the short comings like lack of public awareness about the RTI Act, harassment, intimidation, and threatening of RTI activists be addressed, rather than diluting the Act.

Book Review – Dilemmas, Dilemmas: Practical Case Studies for Company Directors

2010-05-29T02:20:00.000-07:00

Book Review – Dilemmas, Dilemmas: Practical Case Studies for Company Directors
By Julie Garland McLellan
ISBN: 9781449921965, Publisher: Create Space, USA, March 2010.

As the title of the book suggests, each one of us while servicing as Directors have faced identical situations, when we do not have the right solution and the correct (I would say the ‘optimal’) solution really does not strike us spontaneously, therefore are in a state of great Dilemma.
The book contains twenty-two short case studies. I feel proud to have got associated, though partly, while trying to answer some of these case studies on the social network, where they were being initially posted. I used to eagerly wait for these on the net and would try to genuinely read and answer them as per my knowledge and comprehension. Reading these practical cases studies at those times and once again in the form of book has been an interesting experience and thought-provoking and has surely helped me in developing personal judgments and thinking in the right perspective. Each case study has been presented with the views of various experts, followed by Julie McLellan’s comments at the end and then followed with questions for readers to ponder and further sharpen his or her wits.
“Dilemmas, Dilemmas: Practical Case Studies for Company Directors” is in simple English and easy to read.

The Corporate Governance - India Inc should look for Holistic Solutions

2010-05-04T04:50:00.000-07:00

The Corporate Governance, has never ever, since the Satyam Episode, become such a household word. A confessional letter of 7th January 2009 from Mr. Ramalinga Raju, founder Chairman of Satyam, divulged the accounting scam of the order of US $ 1.6 billion, and shook the whole country with tremors felt throughout the globe. Mr. Ramalinga Raju can be credited as the only corporate fraudster to have admitted his misdemeanors – fudging of accounts, inflated revenues, non-existing profits, and the fraudulent bank deposits and audaciously sustaining it for seven long years. The Mr. Ramalinga Raju’s misdeeds, unfortunately had given negative publicity of India Inc so far a positive story. The fraud has undermined the trust in the government, companies, and markets alike. In India, nobody had ever imagined anything to go wrong at Satyam, one of India’s best known IT companies, which ironically had received the Golden Peacock Award for Corporate Governance in 2008.

This episode has led to debates in India, about some of inadequacies in the corporate governance norms. Questions have been raised about the performance/ effectiveness of board of directors, roles of auditors, the impact of regulations, disclosures, etc. However, the silver lining to this whole episode was the proactive role played first time ever in India by the shareholder activists in opposing the unanimously approved board’s resolution of December 16, 2008, in acquiring a property of companies (Matyas Properties and Maytas Infra) owned by the son of Mr. Ramalinga Raju, which led to revelation of frauds being committed by promoter behind the scene. If a large company like Satyam could do it for years, what’s the guarantee more are not doing it? It is therefore, important that the Satyam fraud needs to investigated and sentence the fraudsters swiftly and harshly to increase 'deterrent aspects’.

The frauds of such magnitudes provide a good opportunity for introspection. These times also expose the shortcomings and vulnerabilities of the system. Conflicts always have hidden solutions. There are lessons to be learnt from Satyam’s nemesis too. It is one such great opportunity to reassess some of the existing framework on corporate governance, systems for better enforcements of regulations; effective roles and duties of directors, executives, regulators; ethics in businesses and empowerment of minority shareholders.

OVERVIEW OF INDIAN CORPORATE GOVERNANCE

India’s corporate governance codes are on par with the best in the world, the importance of continuing to assess it against international best practice, to suit to the Indian ethos & culture with utmost sincerity and keenness in enforcement has been highlighted by the recent fraud at Satyam.

The Indian corporate would appreciate the fact that the corporate governance in India has not been forced upon them by the government, but it was a voluntary and path-breaking initiative from the Indian industries association - Confederation of Indian Industry (CII). It was necessitated, for the fact that India Inc was to move forward and globalize itself towards international standards in terms of disclosure of information by the corporate sector and, through all of this, to develop a high level of public confidence in business and industry in the process of building large global conglomerates. CII had vigorously lobbied and pressurized the government of India for its implementation.

Corporate governance initiatives in India began in 1998 with the “Desirable Code of Corporate Governance” – a voluntary code published by the CII, and the first formal regulatory framework for listed companies specifically for corporate governance, established by the SEBI, widely known as Clause 49 of the Listing Agreement – Aimed at improving corporate governance in the country. The latter was implemented in February 2000, following the recommendations of the Kumarmangalam Birla Committee Report.

Legal reforms has been ongoing, with SEBI in 2003 revised the Clause 49, as per the recommendations put forward by the committee and public comments received. Subsequently, the SEBI received a number of feedbacks/ representations, which were deliberated once again by the Narayana Murthy Committee and post discussion, SEBI directed further amendment to the Clause 49 in October, 2004. The amendment to Clause 49 of the Listing Agreement has been the topic of elaborate deliberations and discussions in the Indian corporate scene. The difficulties in achieving compliance prompted many apex chambers of commerce to appeal for an extension of the extended deadline of 31 December 2005, without success. The ease with which SEBI introduced mandatory corporate governance standards in India is unparallel.

The Companies Act, 1956 was undoubtedly a significant landmark in the development of Company Law in India. It consisted of 658 sections and fourteen schedules. The Act was enacted with the object of amending and consolidating the law relating to Companies and certain other associations. The main object of the Act was to provide protection to investors, creditors and public at large and at the same time leaving management free to utilize its resources and energies for the optimum output. However, the working of the Companies Act brought to light several lacunae and defects in its provisions. Therefore, the Act was amended from time to time. But despite extensive changes the principal Act still suffers from certain serious defects. Moreover, after liberalization, the increasing number of options and avenues for international business, trade and capital flows had necessitated modernization of the regulatory structure for the corporate sector in a comprehensive manner.

In 2004, the Indian Government took up a comprehensive review of the Companies Act, 1956. The aim was to strengthen compliance norms and to provide a governance structure for unlisted firms. The new Companies Bill has been based on best international practices and fosters entrepreneurship. As a result the Union Cabinet on 29th August 2008 gave its approval for introduction of the Companies Bill, 2008 in the Parliament to replace the Companies Act, 1956, the existing statute for regulation of companies in the country and considered to be in need of comprehensive revision in view of the changing economic and commercial environment nationally as well as internationally. The bill had lapsed with the dissolution of the house in December 2008 and it has now been re-introduced on 3rd August, 2009. The Companies Bill seeks to enable the corporate sector in India to operate in a regulatory environment of best international practices. The provisions of Companies Bill are broadly considered to be suitable for addressing various contemporary issues relating to corporate governance, including those recently noticed during the investigation into the affairs of erstwhile Satyam.

The bill has now been re-christened as Companies Bill 2009, and has been forwarded to a Parliamentary Standing Committee for recommendations. With the standing committee set with no time frame for giving its recommendations, the passage of the new law is likely to take over a year. It is quite sad that the amendment of the Company Act 1956 has been languishing for so many years now. It is earnestly hoped that speedy passage of the Companies Bill will now be ensured.

LESSONS FROM SATYAM EPISODE

The Satyam board on December 16, 2008, had unanimously approved a proposal to acquire 100 percent of closely held Maytas Properties for Rs 6,240 crore ($ 1.3 billion) and 51 percent of Maytas Infra for Rs 1440 crore ($300 million). The latter acquisition was proposed to be done in two stages: first, Satyam would acquire 31 percent from the promoters at Rs 475 a share, and in the second, it would buy another 20 percent from the market through an open offer at Rs 525. The two acquisitions would have totals expenditures of Rs 7680 crore ($1.6 million).

The immediate reaction of institutional shareholders and investment analyst, as soon as the information become public the next day, was that it was daylight robbery and the promoters were siphoning money out of Satyam. They further vehemently reacted and said that they would to go to any length to prevent this from happening. Mr. Ramalinga Raju was left with no option to abandon the plan at the first place, but also had to put in his papers, confessing cooking of the books for several years, on 7th January 2009, sending shockwave all throughout the corporate board. However, the silver lining to this whole episode was the ascendancy of the Shareholders Activism, one of the first times ever in India. But for the proactive role played by the shareholders and the institutional investors, the nefarious activities committed clandestinely by promoters would not have seen the light of the day.

In the Indian context, it is well known that the many of the companies are controlled by the families and would like these to be handed over to their sons and daughters. The promoters may pursue interests that are not necessarily desirable from the point of view of the commercial success of the company. The promoters are all powerful making even the academically well qualified Independent Directors, as in the case of Satyam having people like; Vinod K Dham, Mendu Rammohan Rao, Krishna G Palepu, Mangalam Srinivasan…, appear dwarfs and not of independence. This has brought to attention once again the role of the independent directors.

As a consequence of the fallout, all the independent directors had resigned one after another. These included Mangalam Srinivasan, Vinod K Dham, Krishna G Palepu, T R Prasad, Prof. V S Raju and M Rammohan Rao.

It is one thing to have elaborate codes, but quite another for companies to follow them in letter and spirit. Yet another is the question of enforcement if companies do not adhere to the standards. Weakness of enforcement in India is a real issue. The unraveling of these events at Satyam has once again put spotlight on some of the corporate governance practices and has exposed the following weaknesses:

Lax Regulatory systems.
The imperious and Machiavellians promoters/ CEOs and their unbridled greed.
Connivance and collusion of Auditors and poor auditing practices.
Timid and acquiescent independent directors.
Shareholders activism and Empowerment of minority shareholders.
Empowerment of Whistle blowers.

We ought to refrain from taking quick-fix regulatory measures. It would be worthwhile to search for holistic solutions to these issues; which are relevant in the Indian context. The choice of changes in the regulatory frame work should be compatible with the country’s own values and legal system. The system adopted should be agile enough to fore warn the early signals of a brewing crisis and take corrective measures. The system should encourage “proactiveness” rather than be a "reactionary", otherwise status will not change. With the present day state of art computer technologies, this is not impossible.

One must, however, understand that no matter how strong a regulatory system is, it cannot always prevent frauds. Despite the enormous increase of disclosures and stringent risk management systems in US post the Sarbanes Oxley Act (SOX), inability of the system to read the early sign of impending recent Subprime crisis, Madoff's Ponzi scheme, and willingness to take corrective action is one such example. Moreover, strong measures often lead to expensive regulations and defiance. There are limits to legislations as a lot depends on the integrity and ethical values of various corporate players such as directors, promoters, executives and shareholders. The key lies in management decisions and its commitment to establish and follow rigorous governance systems. The implementation must be in the letter and spirit, and one should recognize the responsibility of the company towards its stakeholders.

EMPOWERMENT OF WHISTLEBLOWERS

2010-03-14T08:48:00.000-07:00

In corporate parlance, whistle blowing is a mechanism for employees to raises a concern about wrongdoing occurring in an organization, such as suspected fraud or violation of the company’s code of conduct or ethics policy. In the context of risk management and internal controls, it is a useful management tool which can hunt out information which may or may not surface to the levels where such deviant practices could be flagged, and stopped, thus providing an opportunity for identification and rectification of the problem, without damaging the functioning and/or survival of the corporations.

While the Indian government still has to bring out a comprehensive whistle-blower policy, the Security and Exchange Board of India (SEBI) has set out a model procedure for facilitating whistle blowing in the listed corporations under the Clause 49.

These guidelines are non-mandatory following reservations on the part of several companies, who were apprehensive that the policy could be used to report a number of frivolous cases. However, there are a number of companies who have indeed evolved a whistle blower policy and in some cases; the reporter of misconduct even includes other stakeholders, such as vendors and customers.

Recently, in December 2009, the Ministry of Corporate Affairs (MCA) has issued a Voluntary Guidelines for Corporate Governance, incorporating clause VI for Institution of mechanism for whistle blowing by the companies:

1. The companies should ensure the institution of a mechanism for employees to report concerns about unethical behaviour, actual or suspected fraud, or violation of the company's code of conduct or ethics policy.

2. The companies should also provide for adequate safeguards against victimization of employees who avail of the mechanism, and also allow direct access to the Chairperson of the Audit Committee in exceptional cases.

A company’s board and its directors have the responsibility of reducing the damage that any public exposure could bring upon them and as well their companies, their risk management systems should provide for suitable mechanism of facilitation to encourage whistle blowing procedures that would at once encourage adequate confidence in the employees about the confidentiality of the processes and also the fairness and promptitude of follow-up actions on their complaints.

In the US, well published high profile whistle blowing by Sherron Watkins of Enron and Cynthia Cooper of WorldCom, which led to revelation of frauds to the tune of $591 million in Enron and the $3.8 billion in WorldCom.

Aforesaid and other fraud cases, which cost investors billions of dollars when the share prices of affected companies collapsed, shook public confidence in the securities markets, spurred the US administration to pass the Sarbanes-Oxley Act, 2002 (SOX), which provided legal protection to whistleblowers in public companies. Section 806 of SOX, is intended to protect employees of public companies from retaliation for reporting financial misdeeds, and is administered by the Department of Labor’s (DOL) Occupational Safety and Health Administration.

Section 1107, of SOX Act has provision of strong penalties:

“Whoever knowingly, with the intent to retaliate, takes any action harmful to any person, including interference with the lawful employment or livelihood of any person, for providing to a law enforcement officer any truthful information relating to the commission or possible commission of any federal offense, shall be fined under this title, imprisoned not more than 10 years, or both”

Despite a strict ban on various kinds of disciplinary or retaliatory actions against such whistle blowers, such as discharge, demotion, suspension, threats, harassment, blacklisting, etc., the ground realities are quite different and the confidence levels in the systemic protection mechanisms is low.

However, in the recent case, John Kopchinski's six-year legal battle against Pfizer Inc just made him a rich man. Kopchinski and five other whistleblowers have earned more than $102 million in payments from the U.S. government under the False Claims Act through which individuals can reap rewards for exposing corporate wrongdoing. Kopchinski - the Gulf War veteran and former Pfizer sales representative, alone has earned more than $51.5 million as a result of his whistleblower lawsuit against the world's biggest drug maker and the record penalty the company must pay the U.S. government for its massive marketing transgressions. The size of the whistleblower rewards announced is already having an impact worldwide.

According to a recent Fraud Survey 2009 conducted by KPMG, nearly two–third (65%) of the senior executives viewed fraud and misconduct to be significant risks within their industry. These senior executive were most concerned of potential loss of public trust, potential legal fines/ sanctions, and loss of new or existing customers due to frauds.

In an another survey data based on actual fraud cases from the Association of Certified Fraud Examiners, responders opined that frauds were more likely to come to light through whistleblower tips than through audits, controls, or any other means. In addition, employees, who responded to KPMG Forensic’s 2008–2009 Integrity Survey cited Internal Audit as among the least likely channels to which they would feel comfortable reporting misconduct.

The whistle blowing, as an internal control mechanism is yet to come of age in our country. Whistle blowing, in India, still continues to be perceived by many as acts; which are not constructive, a matter of personal vendetta or revenge, intention to embarrass the organization, and so on so forth. On the other hand, the whistleblowers have often faced reprisal, greatly suffered and endured, often for many years, after the complaints have gone unheeded. One of the reasons attributable to this is poor levels of confidence in the ability of the legal and regulatory environment to ensure promised protection against retaliation.

For developing a better corporate governance practices in the country, it is imperative to empower the whistle blowers, the policy concerning them need to be made mandatory, with clear guidelines for prosecuting intimidation of or retaliation against the complainants, including imposition of fines/ penalties for frivolous or mischievous complaints and fast-track disposal of cases along the lines of the Sarbanes-Oxley Act (SOX).

CORPORATE GOVERNANCE - VOLUNTARY GUIDELINES 2009

2010-01-07T04:40:00.000-08:00

CORPORATE GOVERNANCE - VOLUNTARY GUIDELINES 2009

The present Corporate Governance Voluntary Guidelines being proposed by MCA for voluntary adoption by the Corporate Sector have taken into account the recommendations of the Task Force set up by Confederation of Indian Industry (CII) under chairmanship of Shri Naresh Chandra in February, 2009 to recommend ways to further improve corporate governance standards and practices. These also includes the recommendations from the Institute of Company Secretaries of India and suggestions and comments from other stakeholders.

These guidelines will provide corporate India a framework to govern themselves voluntarily as per the highest standards of ethical and responsible conduct of business.

These are available at the web site of the Ministry of Corporate Affairs, Government of India at: http://mca.gov.in/Ministry/latestnews/CG_Voluntary_Guidelines_2009_24dec2009.pdf.

To download the same Click Here.

Bernard Madoff's Ponzi Scheme

2009-09-03T21:09:00.000-07:00

Is it a case of hamstrung by bureaucracy, inexperienced investigators, misjudgment, improprieties or much more to it?

In a blistering Executive summary report posted on SEC’s web site on 2nd September 2009 by US SEC’s inspector general, states that the regulators missed “numerous” red flags that had led to Madoff‘s $65 billion Ponzi scheme and never did a “thorough and competent” probe despite complaints dating to 1992.

In spite of five probes and having caught Madoff in “lies and misrepresentations” SEC failed to follow up on inconsistencies. But for Madoff’s self confession of the crime in December 2008, the regulators would have never ever found out. The financial crisis has exposed many breakdowns in regulation, but none has involved such a large fraud by a single person.

The laxity of regulator in discharging duties for around one and half decades had only encouraged the fraudster to continue the crime audaciously for such a long period. The fraud left thousands of clients, including charities, retirees and celebrities, devastated. Such failures are unpardonable and do not act as deterrent.

Click Here to read the Executive Summary Report
Click Here to Read Full Report

Satyam Lessons and Corporate Governance Reforms

2009-08-31T21:24:00.000-07:00

“The directors (managers) of such companies, however, being managers of other people’s money than their own, it cannot well be expected that they should watch over it with the same anxious vigilance with which the partners in a private co-partnery frequently watch over their own… Negligence and profusion, therefore, must always prevail more or less in the management of the affairs of such a company.”

• Adam Smith - An Inquiry into “The Nature and Causes of The Wealth of Nations”, p.31.

INTRODUCTION

The Corporate Governance, has never ever, since the Satyam Episode, become such a household word. A confessional letter of 7th January 2009 from Mr. Ramalinga Raju, founder Chairman of Satyam, divulged the accounting scam of the order of US $ 1.6 billion, and shook the whole country with tremors felt throughout the globe. Mr. Ramalinga Raju can be credited as the only corporate fraudster to have admitted his misdemeanors – fudging of accounts, inflated revenues, non-existing profits, and the fraudulent bank deposits and audaciously sustaining it for seven long years. The Mr. Ramalinga Raju’s misdeeds, unfortunately had given negative publicity of India Inc so far a positive story. The fraud has undermined the trust in the government, companies, and markets alike. In India, nobody had ever imagined anything to go wrong at Satyam, one of India’s best known IT companies, which ironically had received the Golden Peacock Award for Corporate Governance in 2008.

This episode has led to debates in India, about some of inadequacies in the corporate governance norms. Questions have been raised about the performance/ effectiveness of board of directors, roles of auditors, the impact of regulations, disclosures, etc. However, the silver lining to this whole episode was the proactive role played first time ever in India by the shareholder activists in opposing the unanimously approved board’s resolution of December 16, 2008, in acquiring a property of companies (Matyas Properties and Maytas Infra) owned by the son of Mr. Ramalinga Raju, which led to revelation of frauds being committed by promoter behind the scene. If a large company like Satyam could do it for years, what’s the guarantee more are not doing it? It is therefore, important that the Satyam fraud needs to investigated and sentence the fraudsters swiftly and harshly to increase 'deterrent aspects’.

The frauds of such magnitudes provide a good opportunity for introspection. These times also expose the shortcomings and vulnerabilities of the system. Conflicts always have hidden solutions. There are lessons to be learnt from Satyam’s nemesis too. It is one such great opportunity to reassess some of the existing framework on corporate governance, systems for better enforcements of regulations; effective roles and duties of directors, executives, regulators; ethics in businesses and empowerment of minority shareholders.

OVERVIEW OF INDIAN CORPORATE GOVERNANCE

India’s corporate governance codes are on par with the best in the world, the importance of continuing to assess it against international best practice, to suit to the Indian ethos & culture with utmost sincerity and keenness in enforcement has been highlighted by the recent fraud at Satyam.

The Indian corporate would appreciate the fact that the corporate governance in India has not been forced upon them by the government, but it was a voluntary and path-breaking initiative from the Indian industries association - Confederation of Indian Industry (CII). It was necessitated, for the fact that India Inc was to move forward and globalize itself towards international standards in terms of disclosure of information by the corporate sector and, through all of this, to develop a high level of public confidence in business and industry in the process of building large global conglomerates. CII had vigorously lobbied and pressurized the government of India for its implementation.

Corporate governance initiatives in India began in 1998 with the “Desirable Code of Corporate Governance” – a voluntary code published by the CII, and the first formal regulatory framework for listed companies specifically for corporate governance, established by the SEBI, widely known as Clause 49 of the Listing Agreement – Aimed at improving corporate governance in the country. The latter was implemented in February 2000, following the recommendations of the Kumarmangalam Birla Committee Report.

Legal reforms has been ongoing, with SEBI in 2003 revised the Clause 49, as per the recommendations put forward by the committee and public comments received. Subsequently, the SEBI received a number of feedbacks/ representations, which were deliberated once again by the Narayana Murthy Committee and post discussion, SEBI directed further amendment to the Clause 49 in October, 2004. The amendment to Clause 49 of the Listing Agreement has been the topic of elaborate deliberations and discussions in the Indian corporate scene. The difficulties in achieving compliance prompted many apex chambers of commerce to appeal for an extension of the extended deadline of 31 December 2005, without success. The ease with which SEBI introduced mandatory corporate governance standards in India is unparallel.

The Companies Act, 1956 was undoubtedly a significant landmark in the development of Company Law in India. It consisted of 658 sections and fourteen schedules. The Act was enacted with the object of amending and consolidating the law relating to Companies and certain other associations. The main object of the Act was to provide protection to investors, creditors and public at large and at the same time leaving management free to utilize its resources and energies for the optimum output. However, the working of the Companies Act brought to light several lacunae and defects in its provisions. Therefore, the Act was amended from time to time. But despite extensive changes the principal Act still suffers from certain serious defects. Moreover, after liberalization, the increasing number of options and avenues for international business, trade and capital flows had necessitated modernization of the regulatory structure for the corporate sector in a comprehensive manner.

In 2004, the Indian Government took up a comprehensive review of the Companies Act, 1956. The aim was to strengthen compliance norms and to provide a governance structure for unlisted firms. The new Companies Bill has been based on best international practices and fosters entrepreneurship. As a result the Union Cabinet on 29th August 2008 gave its approval for introduction of the Companies Bill, 2008 in the Parliament to replace the Companies Act, 1956, the existing statute for regulation of companies in the country and considered to be in need of comprehensive revision in view of the changing economic and commercial environment nationally as well as internationally. The bill had lapsed with the dissolution of the house in December 2008 and it has now been re-introduced on 3rd August, 2009. The Companies Bill seeks to enable the corporate sector in India to operate in a regulatory environment of best international practices. The provisions of Companies Bill are broadly considered to be suitable for addressing various contemporary issues relating to corporate governance, including those recently noticed during the investigation into the affairs of erstwhile Satyam.

The bill has now been re-christened as Companies Bill 2009, and will be forwarded to a Parliamentary Standing Committee for recommendations. With the standing committee set with no time frame for giving its recommendations, the passage of the new law is likely to take over a year. It is quite sad that the amendment of the Company Act 1956 has been languishing for so many years now. It is earnestly hoped that speedy passage of the Companies Bill will now be ensured.

LESSONS FROM SATYAM EPISODE

The Satyam board on December 16, 2008, had unanimously approved a proposal to acquire 100 percent of closely held Maytas Properties for Rs 6,240 crore ($ 1.3 billion) and 51 percent of Maytas Infra for Rs 1440 crore ($300 million). The latter acquisition was proposed to be done in two stages: first, Satyam would acquire 31 percent from the promoters at Rs 475 a share, and in the second, it would buy another 20 percent from the market through an open offer at Rs 525. The two acquisitions would have totals expenditures of Rs 7680 crore ($1.6 million).

The immediate reaction of institutional shareholders and investment analyst, as soon as the information become public the next day, was that it was daylight robbery and the promoters were siphoning money out of Satyam. They further vehemently reacted and said that they would to go to any length to prevent this from happening. Mr. Ramalinga Raju was left with no option to abandon the plan at the first place, but also had to put in his papers, confessing cooking of the books for several years, on 7th January 2009, sending shockwave all throughout the corporate board. However, the silver lining to this whole episode was the ascendancy of the Shareholders Activism, one of the first times ever in India. But for the proactive role played by the shareholders and the institutional investors, the nefarious activities committed clandestinely by promoters would not have seen the light of the day.

In the Indian context, it is well known that the many of the companies are controlled by the families and would like these to be handed over to their sons and daughters. The promoters may pursue interests that are not necessarily desirable from the point of view of the commercial success of the company. The promoters are all powerful making even the academically well qualified Independent Directors, as in the case of Satyam having people like; Vinod K Dham, Mendu Rammohan Rao, Krishna G Palepu, Mangalam Srinivasan…, appear dwarfs and not of independence. This has brought to attention once again the role of the independent directors.

As a consequence of the fallout, all the independent directors resigned one after another. These included Mangalam Srinivasan, Vinod K Dham, Krishna G Palepu, T R Prasad, Prof. V S Raju and M Rammohan Rao.

It is one thing to have elaborate codes, but quite another for companies to follow them in letter and spirit. Yet another is the question of enforcement if companies do not adhere to the standards. Weakness of enforcement in India is a real issue. The unraveling of these events at Satyam has once again put spotlight on some of the corporate governance practices and has exposed the following weaknesses:

1. Lax Regulatory systems
2. The imperious and Machiavellians promoters/ CEOs and their unbridled greed
3. Connivance and collusion of Auditors and poor auditing practices
4. Timid and acquiescent independent directors
5. Shareholders activism and Empowerment of minority shareholders
6. Empowerment of Whistle blowers

We ought to refrain from taking quick-fix regulatory measures. It would be worthwhile to search for holistic solutions to these issues; which are relevant in the Indian context. The choice of changes in the regulatory frame work should be compatible with the country’s own values and legal system. The system adopted should be agile enough to fore warn the early signals of a brewing crisis and take corrective measures. The system should encourage “proactiveness” rather than be a "reactionary", otherwise status will not change. With the present day state of art computer technologies, this is not impossible.

One must, however, understand that no matter how strong a regulatory system is, it cannot always prevent frauds. Despite the enormous increase of disclosures and stringent risk management systems in US post the Sarbanes Oxley Act, inability of the system to read the early sign of impending recent Subprime crisis, Madoff's Ponzi scheme, and willingness to take corrective action is one such example. Moreover, strong measures often lead to expensive regulations and defiance. There are limits to legislations as a lot depends on the integrity and ethical values of various corporate players such as directors, promoters, executives and shareholders. The key lies in management decisions and its commitment to establish and follow rigorous governance systems. The implementation must be in the letter and spirit, and one should recognize the responsibility of the company towards its stakeholders.

Super (Human) Independent Directors

2009-08-22T06:52:00.000-07:00

The Hon’ble Union Minister for Corporate Affairs, who had delivered the inaugural address on 21st August 2009 at the “National Conference on ’Corporate Governance’” organized by the Institute of Directors, asserted the government’s commitment to demystify issues relating to corporate governance.

Referring to the new Bill on company affairs, the Minister said the government was working to simplify the law by bringing down the provisions from 600 to about 400. He further said that there was a need to restrict the number of directorship an individual could hold. “We don’t have superhuman being to be the director of 20-25 companies”.

“Those aspiring for the posts should be aware that it is a position of responsibility and not a joy ride,” he said. (Source: Business Standard (New Delhi Edition) dated 22nd August 2009)

The above issue of "Super (human) Independent Director" was commented upon by me on the blog “Indian Corporate Law” on 30th July 2009. To read the full article click here.
It is also quoted verbatim below.

In view of the above, it is pertinent that, those IDs holding such ornamental posts, on the moral grounds should of their own resign from some of directorship before they are removed through the enactment of new company law and get humiliated later.

It would also be, not out of context to mention here that the Chairmen/ Chairperson / Nomination committees of those corporate should set an example of good corporate governance and ask these IDs, who are holding so many posts on the board to go immediately. Not only, the reputation of these companies is at stake, but it would lead to plummet of these companies' shares in the stock market thereby affecting the minority shareholders values, like in the case of Satyam.
Quote:
Super ( Human) Independent Directors
It is a human nature to be greedy at the expense of others. Some of these "Super (human) Independent Directors”, whose foremost duties toward the minority shareholders are being overlooked for the same reason. The IDs who are on the board of companies as high as around half century (50) will never be independent of mind( one of the main principle of Good Corporate Governance), thus not eligible & qualified to be on the board on behalf of these minor shareholders.

It is now the duty of the regulatory authority to intervene and make suitable amendments in sections 275, 276, 277 & 278 of company act and reduce the number of company an individual ID can hold to ten (10) instead of present fifteen (15). The regulatory authorities should also go a step further to include unlisted / private companies, in the forthcoming Indian Company Bill 2009 to curb gross misuse by some of these greedy Super (human) Independent Directors. Source: http://www.directorsdatabase.com/
Unquote
P R Chandna

Citi Forced to Bring in Consultant for Management Checks

2009-08-13T08:51:00.000-07:00

Citi Forced to Bring in Consultant for Management Checks

U.S. regulators have made Citigroup to hire external consultants to consider whether its current management is up to the job of leading the troubled bank out of the financial crisis, reported the Financial Times.

It said people close to the situation said Citi had retained Egon Zehnder, a board advisory consultancy, to carry out an in-depth management review requested by the government after stress tests on banks in May. The push for Citi to enlist external help, led by the Federal Deposit Insurance Corporation and backed by other regulators, underlines authorities’ desire to keep Citi’s upper echelons under control after rescuing the bank with $45 billion...

The sources said Citi had to present a plan of action about possible managerial changes to the board and regulators by the time it reports third-quarter results in October. Citi has added eight new directors and replaced its finance chief in recent months

To read the article in Financial Times - Click Here

Cross Border Merger of Companies

2009-07-31T21:09:00.000-07:00

Cross Border Merger of Companies

Indian Government proposes to incorporate cross border Merger of Comapanies in the Company Bill 2009, which is likely to be introduced in current session of the parliament.
To read the complete news Click Here.

Indian Companies Bill 2009

2009-07-30T21:17:00.000-07:00

Companies Bill 2009 likely to be re-introduced this week
Post Satyam fraud, which came to light after founder chairman of the IT firm confessed manipulating the books of accounts of his company for several years, the government is planning to further strengthen various provisions of the Bill.

It plans to make amendments including incorporation of class action suit and specifying accountability of independent directors in the Bill. Further, the government also seeks to make norms for auditors tougher and corporate governance norms more stringent...
To read the full story in "The Economic Times" dated 29th July 2009 Click Here.

Companies Bill 2011 as presented to the Parliament - To Read it Click Here: http://www.mca.gov.in/Ministry/pdf/The_Companies_Bill_2011.pdf

IFC, Sebi, CII to sensitise directors on corp governance

2009-07-27T09:24:00.000-07:00

IFC, Sebi, CII to sensitise directors on corp governance
IFC, an arm of the World Bank, will hold a series of workshops along with market regulator Sebi and industry body CII to sensitise independent directors about issues concerning corporate governance and the role they can play in preventing frauds like Satyam.
During the workshops, he said, "Independent directors will be sensitised about the need of corporate governance, the issues they need to focus on and the questions they should raise at board meetings."...
The workshop will help independent directors enhance their understanding of their role as a board member and their effective contribution in the working of the board, Kar said.
IFC's global corporate governance forum has partnered NISM to promote awareness of corporate governance in India. The forum also helps in disseminating good corporate governance practices, sponsoring research and supporting technical assistance.
To read the full story Click Here

India (SEBI) Clarifies Employees Stock Option Rules ‏

2009-07-25T22:25:00.000-07:00

India's capital markets regulator clarified late Friday that employees of companies can subscribe to stock options even if they have sold the firm's shares during the previous six months.Employees, however, won't be permitted to buy the company's shares within six months of selling stock options, the Securities & Exchange Board of India said in a notice.It said while exercising employee stock options, the code of conduct framed by the company and "the fundamental principles for prohibition of insider trading as specified in the regulations must be complied with."Employees will also have to wait for six months since the last transaction in the company's shares to make an opposite trade, the regulator said.However, shares subscribed to under initial public offerings will only have to be held compulsorily for 30 days, it said.These rules can be waived for personal emergencies for sale of the company's shares if the reasons are recorded in writing and there is no element of insider trading. ...
To read the article Click here

Record number of fraud cases in first half of 2009

2009-07-20T21:05:00.000-07:00

Over 160 cases of serious fraud with charges in excess of £100,000 came to UK courts in the first half of this year, according to KPMG Forensic – the highest number of cases in a six month period in the 21 year history of its Fraud Barometer.
The cases had a total value of £636m which, if replicated in the second half of the year, would also lead to the highest value of fraud in the Barometer’s history (currently £1.2bn in 1995). Professional gangs were the most active perpetrators of fraud,..

To read the full article by KPMG Click Here.

Auction mining rights

2009-07-10T21:16:00.000-07:00

Auction mining rights
There is no other way to stop corruption...

...an industry body said to represent mining interests, which has come out in opposition to the policy of auctioning mining rights. This seems quixotic, when the mining of oil and gas fields has been accepted policy the world over. The ground rules under which contracts are signed are well established, and there is no reason why prospecting for coal or bauxite should be not be dealt with in the same way, and why proven reserves should not be auctioned to the highest bidder...

As it happens, the government decided more than a year ago that auctions are the right way to go—a stance that China too has taken. The policy adopted in March 2008 said that mining leases would be auctioned to actual users and that exports would be encouraged in value-added form (in other words, the country should export steel, not iron ore). It is not clear that the legislative changes required to give effect to this policy have been carried out; even if they have not, that is only a procedural hurdle...
To Read the complete article by T N Ninan in the Business Standard Click Here.

AIG may seek millions in bonus payouts

2009-07-10T04:42:00.000-07:00

AIG may seek millions in bonus payouts
The public was outraged the last time the bailed out insurance giant tried to pay its execs hefty bonuses. But AIG is reportedly talking about trying again.

To read the full story at Money CNN. com Click Here

EMPOWERMENT OF INDEPENDENT DIRECTORS

2009-07-09T20:08:00.000-07:00

This has reference to the news item published in “The Hindustan times” dated 9th July 2009, titled “New Bill to define company directors’ role”. It is heartening to know that the government has taken an initiative to provide protection to Independent Director’s by coming up with amendment to the companies act.

The independent director’s (ID’s) in the present scenario of corporate governance in India are being appointed by the promoters/ CEOs, who are very powerful in the corporate world and thus the likelihood of theirs (ID’s) being independence is very unlikely. The protection as being suggested will be very short lived and will not provide a long term solution to the problem. We have to look for an holistic solution to these issue and the IDs need to be “empowered” rather than being protected. I would call it as bill for “EMPOWEREMENT OF IDs” . IDs need to be empowered or their roles well redefined to have a say in the CEOs succession, rather than CEOs appointing the IDs.

It is also pertinent to note here that many of the IDs (high official from government/ public sector) are being appointed by many companies immediately just after they retire from the active service, which also raises questions on IDs independence. It is a fact , the service rules of government provides for a “cool off period” for these high profile government/ public sector employees, but hardly being implemented. One of the criterion for selection/ rejection for an IDs from this category should also form part of the qualification of the IDs for appointment.

Beside, the above it is a well known fact that Indian shareholders are not proactive or are not able to assert themselves in discharging their role. It these category of people who are the most sufferer, when the company like Satyam or their CEOs indulge in unlawful activities. Shareholder activism is hardly heard off in India, but for recent few cases. It is essential that Indian shareholder also need to be empowered to discharge their role in tandem so as to bring about good corporate governance.

Last but not the least, the “Whistle Blowing” need to be given much more priority.
The above article was Published in Live Mint on 10th July 2009 to read the full article Click Here.

New companies bill set for budget session 2009

2009-07-05T02:03:00.000-07:00

The new “Companies Bill 2009”, with stricter disclosure norms and provision for one-person corporate entity, will be tabled in the ongoing budget session of parliament.
A new companies bill is being re-introduced as the earlier version had lapsed because of dissolution of the previous Lok Sabha. The provisions in the proposed law would be in accordance with the changing economy. To rad the full News appeared in The Times of India 4th July 2009 Click Here.

"American Clean Energy and Security Act - 2009"

2009-06-28T05:15:00.000-07:00

"American Clean Energy and Security Act - 2009"

Landmark legislation to curb U.S. greenhouse-gas emissions was approved by the House of Representatives in a close vote late Friday (26-06-2009) To Read the News on Wall Street Journal (WSJ) Click Here

Role of Independent Directors - Company Act

2009-06-20T01:42:00.000-07:00

In a recent news article published in the Hindustan Times dated 19th June “ Law to steer independent directors”

It’s an excellent step being initiated by the government to review the role of Independent Directors. In the Indian context, it is known that the many of the companies are controlled by the families and would like these to be handed over to their sons and daughters. The promoters may pursue interests that are not necessarily desirable from the point of view of the commercial success of the company. The promoters are all powerful making even the well qualified IDs, as in the case of Satyam having people like; Vinod K Dham, Mendu Rammohan Rao, Krishna G Palepu, Mangalam Srinivasan…, appear dwarfs and not of independence.

In most of the companies, it is the promoters who headhunt the independent directors – who are actually, friends, family members and even family lawyers, thus discouraging dissent in the board rooms and the board meetings are very cool and cozy and companies fail with respect to compliances for full disclosures and transparencies.

India’s corporate governance codes are on par with the best in the world what matters is keenness in implementation of these in practice. There are limits to legislations on corporate governance as a lot depends on the integrity and ethical values of various corporate players such as directors, promoters, executives and shareholders. The corporate governance is not only a “check-the-box” requirement but much more than to it.

Therefore, in the present situation questions are being asked ”Scrap the System of Independent Directorship in the Board?” - Is scraping of the system of IDs has the solution?
What are the role and responsibilities of an Independent Directors?
How far Independent directors have been successful in discharging their duties, looking at the recent episodes of ENRON, WorldCom, insider trading, subprime lending, Bear Stearn, SATYAM, Lehmans Brothers……?
Does the self regulatory mechanism has the solution?
How far SEBI or any other regulators been successful in controlling?

The role of the non-executive directors is to provide direction and oversight to ensure that the company protects and enhances the needs of the shareholders. They are the representatives of the shareholders but must represent every shareholder equally, never one type or group of shareholders.
The role of the independent non - executive is slightly more onerous than that of ordinary non - executives as they must also be completely free from any “conflict of interest”. It can be quite difficult when you are the only person in the boardroom who does not have a vested interest. Therefore, independent director must be sufficiently strong minded to withstand pressure, either overt or covert, to conform to the wishes of others. These are the ones, who are truthful, would stand up and face the corporate world, the weakling will resign, they are really not “qualified” to take up these roles. These breed of IDs, who are needed to be well supported by the system, who would manage to represent the shareholders' interests faithfully and well. The key issue is that, we are dealing with a social system in a confidential operating environment.
If the board is qualified, independent and ethical then one can achieve all the other attributes of good corporate governance. If the board is not qualified they may miss something, if they are not independent they may pursue other interests ahead of those of the company and if they are not ethical company will have trouble sooner or later even if they appear to provide the other attributes.
It is impossible for regulators to regulate so that only ethical and strong people get onto boards.
Furthermore, the shareholders will have to help themselves by ensuring that they question their directors at the AGM or in between, on the nature of behaviors in the boardroom:
• What skills each director brings to the board?
• How directors behave in the boardroom?
• What training needs were identified in the board performance review?
• What training has been delivered and what is planned?
• What specific governance/ director training do board members have?
Companies that disclose this sort of information are unlikely to recruit or retain a passive independent director. It is therefore, pertinent that the ethical side of directorship needs to be recognized and managed far more than what it currently is.
In view of the foregoing, it is a pertinent that a holistic system has thus to be evolved, involving all stakeholders, which would address all those aspects, which would achieve the best principles of corporate governance.

AN EXAMPLE OF GOOD GOVERNANCE

2009-06-17T22:58:00.000-07:00

“Environment ministry to eject double agents:” – HT Times 17th June 2009
It is good to see an intiative has been taken towards good governance in one of the ministry. Our congratulations to the Hon’ble Minister for taking such an initiative of transparent working in his area of influence.
The government as well PSU service rules are very clearly defined issues like “conflict of interests” and “cool off period” and suggest not to take any pecuniary avantages from clients or private sector employment immediately after their retirement but are being coveniently overlooked in many cases.
Many of the ExCMD/ Directors/Scientists/ Government officers at the highest levels have joined either their clients or private sectors immediately after retirement or holding parallel offices. The initiatives taken by one ministry should be emulated by other ministries, so that an example are set for good governance in the country and those holding similar posts should either resign immediately or sacked or removed.

How should board of directors handle Enterprise Risk Management?

2009-06-10T23:37:00.000-07:00

The most extensive delineation of board responsibilities has been enumerated in the Canadian guidelines, which has identified beside other components the following two specific components:

1. Adoption of a strategy planning process.
2. Management of Risk.

The role of the board of directors in ERM oversight includes:

1. Determining a risk-adjusted corporate strategy and adequate metrics to track executive performance in the pursuit of such a strategy,
2. Approving a risk inventory and fundamental ERM parameters (such as risk measurements, risk appetite and tolerance levels) as part of the annual business plan.
3. Being about the effectiveness of designed procedures.

In determining its risk oversight structure, the board should conduct a preliminary analysis of corporate governance practices. Specifically, it should consider the following issues:

1. The independence, professional expertise, and time availability of board members; 2. The assignment of board oversight functions to specialized board committees;
3. The quality of the information flow between board members and management.

Delegating Responsibilities within the Organization: A growing number of companies have been assigning such leadership responsibilities to a dedicated chief risk officer (CRO). But companies should assess the time availability of existing executive positions, evaluate skills and expertise needed, determine the need to promote visibility and authority, and weigh a number of other issues before deciding whether such a position will prove a valuable contribution to the ERM efforts.

From the foregoing it is essential that, the board cannot and should not be involved in actual day-to-day risk management. Directors should instead, through their risk oversight role, satisfy themselves that the risk management processes designed and implemented by executives and risk managers are adapted to the board’s corporate strategy and are functioning as directed, and that necessary steps are taken to foster a culture of risk-adjusted decision-making throughout the organization. Through its oversight role, the board can send a message to the company’s management and employees that corporate risk management is not an impediment to the conduct of business nor a mere supplement to a firm’s overall compliance program but is instead an integral component of the firm’s corporate strategy, culture and value generation process.

Given the increased significance of the risk oversight role in the current risk environment, a company’s risk management system should function to bring to the board’s attention the company’s most material risks and permit the board to understand and evaluate how these risks interrelate, how they affect the company, and how management addresses these risks. It is important for directors to have the experience, training and knowledge of the business necessary for making a meaningful assessment of the risks that the company faces, however complicated they may be.

The board should also consider the best organizational structure to give risk oversight sufficient attention at the board level. In some of the companies, this may include creating a separate risk management committee or subcommittee. In others, it may be sufficient to have the review of risk management as a dedicated, periodic agenda item for an existing committee such as the audit committee, in addition to periodic review at the full board level. While no “one size fits all” it is important that risk management be a priority and that a system for risk oversight appropriate to the company be put in place.

Scrap the System of Independent Directorship in the Board - Is this the solution?

2009-05-29T01:31:00.000-07:00

What are the role and responsibilities of an Independent Directors?
How far Independent directors have been successful in discharging their duties, looking at the recent episodes of ENRON, WorldCom, insider trading, subprime lending, Bear Stearn, SATYAM, Lehmans Brothers……?

Does the self regulatory mechanism has the solution? How far SEBI or any other regulators been successful in controlling? Is scraping of the system of IDs has the solution?

The role of the non-executive directors is to provide direction and oversight to ensure that the company protects and enhances the needs of the shareholders. They are the representatives of the shareholders but must represent every shareholder equally, never one type or group of shareholders.

The role of the independent non - executive is slightly more onerous than that of ordinary non - executives as they must also be completely free from any “conflict of interest”. That means they cannot have any vested interests, whether by personal shareholding, contracts with the company or relationships with the management. It can be quite difficult when you are the only person in the boardroom who does not have a vested interest.

The independent director must be sufficiently strong minded to withstand pressure, either overt or covert, to conform to the wishes of others. These are the ones, who are truthful, would stand up and face the corporate world, the weakling will resign, they are really not “qualified” to take up these roles.

When looking at the failures it is tempting to claim that the independents have failed miserably in their duties. But, when we consider the vast majority of companies that survive, or even thrive, the failures are a miniscule percentage of the greater whole of the listed companies. In most companies the independents, supported by ethical non-executive and executive directors, manage to represent the shareholders' interests faithfully and well.
The key issue is that we are dealing with a social system in a confidential operating environment. Ethical and tough directors will stand up for what is right. Unethical or weak directors will cave in to pressure and may do the wrong thing or simply turn a blind eye whilst others do the wrong thing or resign and go. It is impossible for regulators to regulate so that only ethical and strong people get onto boards.
Shareholders can help themselves by ensuring that they question their directors at the AGM or in between, on the nature of behaviours in the boardroom:

· What skills each director brings to the board?
· How directors behave in the boardroom?
· What training needs were identified in the board performance review?
· What training has been delivered and what is planned?
· What specific governance/ director training do board members have?
Companies that disclose this sort of information are unlikely to recruit or retain a passive independent director.

It is therefore, pertinent that the ethical side of directorship needs to be recognised and managed far more than it currently is. It is observed that things are improving slowly, but there is still much to do to get all the deadwood cut out of the boardrooms.

This article was published in Live Mint Lounge - Wall Street Journal - an Hindustan Times business paper on Posted on 29th May 2009 9:21:01 AM
To Read the full article at the Live Mint Click Here