Enforcement is Key to Better Corporate Governance, eE-SEBI Chief Damodaran Says

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KOLKATA : It has reported that Former SEBI Chairman M. Damodaran said on Friday that improvement in enforcement, and not additions to regulations, could put the country’s corporate governance on a better footing.

(From left) M. Damodaran, Former Chairman of SEBI, Somnath Chatterjee, Former Speaker of the Lok Sabha, and S. N. Ananthasubramanian, President, Institute of Company Secretaries of India (ICSI), at the 14th National Conference of Practicing Secretaries on the theme of ‘Integrating Growth, Governance and Challenges Beyond’ in Kolkata on Friday.
(From left) M. Damodaran, Former Chairman of SEBI, Somnath Chatterjee, Former Speaker of the Lok Sabha, and S. N. Ananthasubramanian, President, Institute of Company Secretaries of India (ICSI), at the 14th National Conference of Practicing Secretaries on the theme of ‘Integrating Growth, Governance and Challenges Beyond’ in Kolkata on Friday.

Speaking at the 14th National Conference of the Institute of Company Secretaries of India (ICSI) here on the theme – Integrating Growth, Governance and Challenges Beyond – Damodaran said the Companies Bill, 2012 in its present form could lead to a regulation-making overdrive.

“The 400 Sections of the Bill and framing of rules under the Sections could be a serious problem,” he added.

He felt India did not need more regulations or institutions but continuity of law and its clarity. “There exists confusion between compliance and governance. The corporate governance practices in the country have not crossed the threshold level,” Damodaran added.

He said auditors and company secretaries have to shoulder more responsibility in improving corporate governance standards.

S.N. Ananthasubramanian, President of ICSI, said that soon company secretaries would be “anointed as chief governance officers”.

“Say ‘no’ to wrongdoings”, he asked the professionals. “I am sure we will collectively rise to the occasion and be counted for our strength of character and content besides competence,” the ICSI President said.

Former Lok Sabha Speaker Somnath Chatterjee said that today clamour was for “governance” for all the trustees of resources of the nation.

“Fundamental democratic values cannot be subservient to quick-buck and end-justifies-means principles,” he added.

G. Srinivasan, CMD of New India Assurance, suggested that lesser interference and appointment of directors from other than the administrative ministry would improve corporate governance in the state-owned companies.

New India Assurance, meanwhile, has put in operation three specially designed indemnity policies for the 32,000 members, 3.8 lakh students and employees of ICSI.

(This article was published in Business Line on July 19, 2013)

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