Good HR Leads to Good Corporate Governance: Dr. Bhaskar Chatterjee, Director General & CEO, ICA

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7 lakh total 8.5 lakh registered companies in India are family owned and are run for more money and more profits: Dr. Chatterjee

Banks are ill equipped to handle succession plan: Indira Padmini, GM, Indian Overseas Bank

HR is now considered as a watchdog of corporate governance.  

INDIA CSR News Network

PANJI/GOA: A two day Conference on Human Resources (HR) and Corporate Governance was inaugurated here in city today by Dr. Bhaskar Chatterjee, Director General and CEO of Institute of Corporate Affairs, Ministry of Corporate Affairs, Govt of India.

Speaking on the occasion addressing the gathering immediately after the inauguration he said all the HR professionals are well versed with issues concerning their professions.  What is more exciting now is to know “How Human Resources(HR) is Connected to Good Corporate Governance”.

With the new companies act coming in place very soon Corporate Governance has become a centre stage.  He spoke about different theories of corporate governance and how they imply different roles and functions for HRD and people management. He spoke about how corporates scandals were surfacing in the recent past.  How the most robust corporate houses bottom lines were knocked out. All this is because of the failure of the corporate governance he said asked who governs the company. It is the board that governs the company.

If the company is family owned proprietor governs the company. Out of 8.5 lakh registered companies in India, nearly 7 lakh are family owned, which means a staggering 90% Indian companies are family owned. And they govern for more money and profits, he said.

Adding further he stated that HR connects the human beings in the company. The culture of the company depends on the way it is governed, the way employees connected to the management. So Human Resources (HR) and Corporate Governance are intertwined.

Today you must all think beyond your defined role as Human Resources Professionals. Think beyond recruitment, training, deployment, retention. Think differently. Today we dont advertise to recruit people/staff for the company.  We use new media to attract the talent.  So your role as HR is changing. Know the strong connect between HR and Corporate Governance, he told the gathering.

Later he chaired a four member panel discussion on HR and Corporate Governance.  The panel was comprised of Ms. Nina Chatrath, Partner, Heldrick & Struggles, Mr. B. B. Singh, former Director of Steel Authority of India, Mrs.Indira Padmini, General Manager–HR, Marketing and Retail Banking of Indian Overseas Bank, Mr. Dhruv Desai, Senior Vice President of HR and Leadership Academy of Angel Broking Pvt. Ltd.  The subject is new and evolving; he announced and explained how good HR practices impact corporate governance.

Panel member Ms. Nina Chatrath, Partner of Heldrick & Struggles speaking first in the panel discussion said good leadership will lead to good governance.  The good HR practices embedded in employees spread among rank and file of the organisation and ultimately lead to good governance, she said.

Adding hia point of view, Mr. B.B. Singh, former Director-Personnel of Steel Authority of India said if CEO is not right, the whole organisation is affected. The recent corporate scandals have shed increasing light on the inability of current governance systems to adequately monitor and control top executive behavior. Executives at companies such as Enron, Worldcom, Adelphi, Qwest, Tyco, Arthur Andersen, and K-Mart seemingly engaged in unethical and even illegal decision making while leaving shareholders holding the bill. As a result stocks have fallen and investors lost money and faith in the companies.

He also highlighted how pressure to increase bottomline dilutes or erodes the values.  He asked if given a choice what are important? Values or performance?. He questioned? Today corporate executives are caught in between these issues and he established a deep link between both the disciplines–HR and Corporate Governance.

Participating in the discussion, Mrs. Indira Padmini said banking industry is currently going through difficult phase. Nobody to blame for the bad state of affairs than itself, as there is no recruitment in the past 15 years.  This has played havoc on the industry. The rapid changes in the technology caught on with the banks and they are ill equipped.  And we are not able to meet challenges. Today poor managers are given unrealistic targets and he  has to struggle to achieve the same. This is where HR comes into effect. Aptitudinal changes and motivation can from HR.

Another challenge faced by banks today is highly qualified like B.Tech, MBA are joining in clerical level cadres in Banking. They are multi tasking. They can finish job fast. Where as the senior managers under whom they work are above 50 years. These young boys and girls find huge communication gap. Their talents are underutilised. So they find job not so satisfying and soon they are leaving.  Even the fastrack promotions did not help to retain them.

Another cause of worry is many banks lack succession plan. As far as Indian Overseas Bank is concerned about 85% of our senior managers and staff are retiring in 2018. And that leaves governing of the bank to young and inexperienced. Then bank will run a terrible risk.  Banks needs to keep in place the succession plan. If we dont pay attention to HR and its connect to Corporate Governance, we will be in trouble she said.

Adding hs view Dr. Bhasker Chatterjee said banking industry has no succession plan in place.  The industry looks at crisis and stays there and does nothing.  This is one example of bad Corporate governance and how it can affect organisation.

Speaking Dhruv Desai said HR is now considered as a watchdog of corporate governance.  Never in the past HR professionals were looked themselves so responsible for corporate governance.  How ontime hiring can jack up the productivity. And how bending leads to breaking and erosion of values take place he explained.

Summing up the discussion, Dr Chatterjee said there is a strong link between HR and Corporate Governance. Today’s sorry state of affairs in corporates are due to a failure of senior members of the HR function to play a leadership role in governance.

Mr. Kamleshwar Sharan President of the Greentech Foundation welcomed the gathering.  The 2 Day Conference of its kind is organised by Greentech Foundation with the support of the Institute of Corporate Affairs, Ministry of Corporate Affairs, Govenment of India. 150 HR and Corporate Governance professionals from across India have participated

The two day meet will discuss among others subjects include Emerging Challenges in HR Management and Corporate Governance, Corporate Governance and Transparency and many such topical issues.

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