The government is taking several initiatives to usher in a new level of corporate governance which is essential for the national economy to grow annually at a rate of nine per cent, minister of state for corporate affairs said today.
“Our economy is on the verge of a take-off stage. The role of corporate sector is phenomenal in achieving the ambitious target of nine per cent GDP growth during 2011-12,” he said while inaugurating a conference organised by The Associated Chambers of Commerce and Industry of India (ASSOCHAM).
Some initiatives taken by the government to propel this growth include online approval of director identification number (DIN), integration of DIN and designated partner identification number (DPIN), doing away with the requirement of having two numbers for registering a company or a limited liability partnership, and introduction of online payment through the national electronic fund transfer (NEFT) enabling stakeholders to pay from any bank.
Other measures taken so far are introduction of XBRL reporting format for filing of annual returns profit and loss account, and creation of a refund mechanism to return stakeholders’ money in cases of wrong debit, said Mr Singh.
“This brings the chief financial officers on the centre stage to coordinate and monitor all-round organisational growth in terms of output, upgrade professional competencies, create new business markets and – above all – improve bottom-line of an organisation at micro-level.”
Due to ever-changing corporate world and regulatory landscape, he said, the role of CFOs is getting constantly redefined. Today’s CFO need to be equipped with a broader set of skills who is not only capable of demonstrating financial accountability but also strong leadership and effective collaboration across various functions.
Meanwhile, ASSOCHAM secretary general D.S. Rawat said a CFO has to play a strategic role in an organisation’s growth. The role of senior financial executives has expanded to include business strategy, regulatory and ethical leadership, product development and bottom-line growth.
Mritunjay Kapoor, country managing director of Protiviti Consulting, said the recent economic crisis, introduction of new financial instruments, global expansion opportunities through mergers and acquisitions, and currency fluctuations have broadened the range of responsibilities on the part of CFOs.
This skill set development and expansion has helped the present day CFOs to move a step closer and lay claim for the top CEO’s job, he said.
Mr B.D. Narang, former chairman and managing director of Oriental Bank of Commerce, said companies with clean balance sheets will be tomorrow’s winners. India Inc must focus on skill development and innovation, he said.
Others present at the conference were S.C. Aggarwal, chairman and managing director of SMC Group, Gautam Bhandari, managing director of Morgan Stanley India, and B.N.S. Ratnakar, general manager of Central Bank of India.