NASSCOM to form governance and ethics committee

NASSCOM Summit

NASSCOM to form governance and ethics committee

The committee would be chaired by N R Narayana Murthy, chairman and chief mentor, Infosys Technologies Ltd

Wednesday, February 11, 2009

NEW DELHI, INDIA: NASSCOM, the premier trade body and the “voice” of the Indian IT – BPO industry, announced that it would form a Corporate Governance and Ethics Committee to strengthen corporate governance practices in the Indian IT-BPO industry.

The committee would be chaired by N R Narayana Murthy, chairman and chief mentor, Infosys Technologies Ltd. It would function as a permanent sub-committee under the aegis of the NASSCOM executive council.

Som Mittal, president, NASSCOM, said “This committee will look to work with authorities, policy makers and regulators, to achieve the objectives of this group.”

Envisaged as an eight-member committee, members would include industry experts, independent directors as well as academicians and would meet at least thrice a year to formulate strategies and measure implementation schedule.

Ganesh Natarajan, chairman, NASSCOM, and global CEO, Zensar Technologies, said “While the committee will focus on awareness and advocacy and share best practices across the member community, we will also be considering steps to further strengthen the excellent reputation of this sector in corporate India.”

The objectives of this committee would include sharpening the existing code of ethics, values and corporate code of conduct for industry; emphasising existing regulations and practices on corporate governance and re-drafting and re-affirming appropriate code of ethics, values and corporate code of conduct for industry.

This committee would look to establish and maintain credibility for the industry among customers, analysts, government, employees, society etc, and will also look to engage with relevant stakeholders and build a desirable framework for the industry that includes a “model code of governance and best practices” and a “model set of financial information disclosures".

Additionally, it would also develop and create awareness of best practices to be followed by the board, audit committees and independent directors of organisations.

Creating awareness across various levels of management and encourage formulating and strengthening of whistle blower policy will be additional focus areas for this committee.

©CIOL Bureau

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Dhirendra Krishna said on 2/13/2009 1:04:52 PM:
Corporate governance in public and private sector companies has become a matter of serious public concern, as recent developments have shaken up public confidence. President of India, in her republic day eve speech, stressed that corporate governance by Companies must improve. Recent slump in stock market in India shows our dependence on foreign institutional investors. Credibility of accounts of Indian companies is under scrutiny of international investors. In recent World Economic Forum at Davos, problems arising from global financial meltdown were discussed. It became obvious solution lies in improved corporate governance, by each business entity. Enhanced transparency and accountability are regarded as the key ingredients of effective corporate governance. All investors, employees, regulatory authorities and other stake-holders need reassurance that internal controls, checks and balances are strong enough to prevent Satyam-like fraud. It is critical for every Company to improve their corporate governance processes. Cosmetic compliance with statutory obligations is not enough, as Satyam like fraud can happen within existing regulatory framework. Opaque systems tend to breed corrupt practices. Public Sector Companies in India have been under the regime of enhanced transparency and public accountability, under the Right To Information Act 2005. RTI Act makes PSUs more transparent than companies in private sector. The basic issues for empirical research are: (a) Whether enhanced transparency under RTI Act has resulted in improving the corporate governance process in PSUs? (b) Is the Regulatory control of corporate enterprises adequate to instill transparency by effective corporate governance by the Board of Directors, to protect the interest of all stake-holders? (c) What practical measures can be taken to make corporate governance more effective ? and (d) Whether the basic features of RTI Act should become a part of disclosure of operational and financial information by private companies, to improve their corporate governance?

to Dhirendra Krishna