ETHICS AND DEVELOPMENT

Entrenching the principles of good governance in public

and private sectors for sustainable development

Pavan Kumar VijayPast President The Institute of Company Secretaries of India

04/12/23

…the application of best management practices, compliance of law in letter and spirit and adherence to ethical standards for effective management and distribution of wealth and discharge of social responsibility for sustainable development of all

stakeholders”

Institute of Company Secretaries of India

“Corporate governance is…

Corporate Governance rests with the Vision and Perception of the Leadership

and

A Leader need to adopt a Vision for Corporate Governance

Corporate Governance Framework

Output – Input = Wealth Created ?

Sustainability

Happiness andProsperity of all

Stakeholders

Reinvestment

Distribu- tion

Research and DevelopmentHR DevelopmentInfrastructureRisk Management

SUPPLIERS Adequate ReturnsHUMAN ASSETS Adequate RemunerationCUSTOMERS Affordable PricesPUBLIC Payment of Taxes and Partnership in National Development Projects

Wealth Creation Wealth Management Wealth Sharing

EnhancedCapabilities

Best Management Practices are Vital Here Law and Ethics are Vital Here

The stakeholder value chain

SUPPLIERS CUSTOMERSHUMAN RESOURCE

Supply Funds, Materials and Services

Value Addition and Management of Resources

Give Opportunity to Co. to Satisfy their Needs

Adequate Returns for Funds, Material and Services Supplied

Adequate Salary and Security for leading a Happy Life

Best Quality Products and Customer Care at Minimum Prices

ROLE OF STAKEHOLDERS

EXPECTATIONS OF STAKEHOLDERS

Potential Suppliers, Human Resources and Customers

Biological, Economic and Cultural EnvironmentPUBLIC

PUBLIC EXPECTS PARTNERHIP FOR SUSTAINABLE DEVELOPMENT

The OECD Principles of Good Governance

The age old mantra of us Indians is that

Commitment to well-being and progress of all stakeholders

Satyam Vada Dharmam Chara

- Taittariya Upanishad

Mantra for Good Governance

Cont…

Speak the Truth and Practice Righteously

Mantra for Good Governance

- Karna Parva of the Mahabharata. Verse-58 in Chapter 69

“The Customer is King”

- Mahatma Gandhi

Mahatma Gandhi’s Philosophy-The Father of Indian Nation

This is the soul behind modern

Marketing Management

Worshipping 33 Crore Godheadssignifying various species, plants,

cosmic elements, …

Care for Panchtatvas (The Basic Elements)

Earth, (Prithvi)

Water, (Jal),

Sky , (Akaash)

Wind, (Vaayu) &

Fire (Agni)

that make a human being

This is our approach to

Environment Protection

The essential principle of Mahatma Gandhi's Governance philosophy

“Trusteeship”

Capacity, Knowledge and Resources

Maximization of stakeholders’ value and well-being and progress of humankind

TOWARDS

THROUGH

Transparency, accountability and truthful disclosure of state of affairs

Ethics

Truth

Corporate are also expected to use their

This is our own age old mantra of Good Governance

Companies that have followed theseprinciples of

Corporate Governancehave

Consistently earned high returns, increased their net worth,

enhanced their shareholders wealth

Invested significantly in proactive research and development

Developed people into ‘achievers’ than just ‘performers’

Dealt ethically with customers, government and business partners

Maintained and updated their professional management culture, system and processes

..and accomplished

WINNINGEMPLOYEES

WINNINGEMPLOYEES

GROWINGINVESTORS

GROWINGINVESTORS

DELIGHTEDCUSTOMERS

DELIGHTEDCUSTOMERS

TRUSTEDSUPPLIERS

TRUSTEDSUPPLIERS

SATISFIEDGOVERNMENT AND

REGULATORS

SATISFIEDGOVERNMENT AND

REGULATORS

HAPPYSOCIETY

HAPPYSOCIETY

Advantages of applying Best Corporate Governance Practices

Widespread Goodwill and Brand Reputation

Access to Global Markets

Better Access to Human Capital

Ready Market for New Products

Widening Customer Base

Enhanced Trust and Confidence of all

Stakeholders

EMPLOYEESEMPLOYEES

INVESTORSINVESTORS CUSTOMERSCUSTOMERS

SUPPLIERSSUPPLIERS

GOVERNMENT AND REGULATORS

GOVERNMENT AND REGULATORS

SOCIETYSOCIETY

Leading to…

Environment

Civil SocietyBusiness Society

SUSTAINABLEDEVELOPMENT OF

NATION

Thus benefits for the nation

• Happier Nation • World wide recognisation • Overall Growth• Enhanced confidence amongst foreign investors through

Primary/Secondary Market • Overall stakeholders benefit • Enhanced repute and significance of Citizens at the global

platform.

The Indian Growth Story &

Governance Model

The Indian scenario – The Initial Hurdles • High population • High poverty • Disparity of income • Lack of education • Lack of employment opportunities • Low infrastructural development

Slow Industrial Growth due to

• Lack of liberalization • Underdevelopment of Industrial Structure • Insufficient entrepreneurial initiatives • Poor Governance • Corruption

India Today

• 2nd most populous nation 1.2 billion – Largest Pool of young & Skilled Manpower

• The 2nd fastest growing economy of the world after China. • GDP USD 1 trillion and growth in last 4 years is 9%, 9.6%,

9.4% and 6.7% • GDP - Agriculture : 20%, Industry 23%, Services: 57%• Never defaulted on international commitments• Preferred destination of Foreign Direct Investment• Believed to be one of the top five Economies by 2050

The Story of Change over

The initiatives by the government

• Liberalization of Industrial Development • Improved Infrastructural development• Development through Public Private Partnership (PPP) Model • Transparency in Disclosures through RTI act • Strengthened Governance Model

The desired result

• Optimum utilization to high population • Increased per capita Income • More Infrastructural Development• More FDI due to Increased accountability • Investors trust within and outside nation

Corruption The real enemy of good governance -The

root cause

•Restriction in grant of permission •Non Transparency •Non Accountability •No fear of wrong doing

The way out to deal with Corruption

– The Simplified legal System – Fuller disclosure & dissemination of Information– Strict actions against wrong doers – Stronger Judiciary

The Anti Corruption Implementation Model

– The e-governance Initiative (MCA21, UID, other e-Governance Models)

– Better Transparency & Accountability through the Right to Information (RTI) Act

Initiatives towards Corporate Governance by The Institute of Company Secretaries of India

Initiatives of ICSI towards good governance

• The Corporate Governance Award function

• The Post Membership Qualification on Corporate Governance

• The Corporate Governance Module for best practices

• The laying of secretarial standards for best practices

The Secretarial Standards of ICSI one of its own type

• Secretarial Standard on Meetings of the Board of Directors

• Secretarial Standard on General Meetings • Secretarial Standard on Dividend • Secretarial Standard on Registers and Records • Secretarial Standard on Minutes • Secretarial Standard on Transmission of Shares and D

ebentures

• (All ten SS)

Recommendation for ICPSK

• Advocacy of Good Governance Practices • Recognition to Good Governed Companies• Specifying structures and role models • Inculcate the better Governance Practices in Members &

Students• The Secretarial Standards

Outstanding Performance, Higher Profits,

Expanded Market Reach and the like FAILS

to protect a company which has put good governance & ethics

at the back burner….

History is Witness

D

I

S

A

S

T

E

R

..…Only the culture of strict adherence to good compliance can

keep a company ahead on sustainable basis , bring in larger

profits!!!

Secret behind building foundations

Tcs & others

S

U

C

E

S

S

CORPORATES SHOULD ACT LIKE HONEYBEE WHICH SUCK THE NECTAR OF THE FLOWERS

WITHOUT EFFECTING ITS FRAGRANCE AND PRODUCE HONEY FOR THE WELL –BEING OF SOCIETY .

Thank you