Business Daily from THE HINDU group of publications
Friday, Jan 30, 2009
ePaper | Mobile/PDA Version | Audio | Blogs
Business Daily from THE HINDU group of publications Friday, Jan 30, 2009 ePaper | Mobile/PDA Version | Audio | Blogs |
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Opinion
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Letters Value systems The article “Rules of promoter-less corporates” (Business Line, January 29) underlines the fact that corporate governance rules of US corporations cannot be made directly applicable to Indian companies. The underlying foundation on which Indian and US companies are built are different. Indian companies, which are 95 per cent family-owned, are run on certain dharmic principles and to directly apply US corporate governance norms will only encourage wrongdoings. Companies that are owner-led will have the owner leading from the front in times of crises, which is uncommon in many CEO-steered US companies, where the CEO is not the owner. Who, other than the owner, will care for the company, the most? The Satyam episode may be a one-off case and to universalise the entire issue undermines the principles of Indian businesses. A reinforcement of such strong value systems and to integrate it professionally with Indian businesses will by itself prevent the likes of Satyam. To discard it and mindlessly import US models will only encourage more companies to take the Satyam route. S.Vaidhyasubramaniam Thanjavur * * *
The author is right in his observation that a large percentage of Indian companies are controlled by promoters, and the CEOs have little say on issues that matter to the stakeholders at large. That begs the question: Is corporate governance in India an investor protection measure or a conduit to bleed the company’s wealth? I strongly endorse the author’s views when he says that it is better to allow the owners to take responsibility for their actions rather than hide behind the independent directors. The Ministry of Corporate Affairs should also explore the possibility of appointing auditors instead of leaving it to the corporate boards (like the audit of banks being decided by the RBI). Subramanya Chandrashekar e-mail More Stories on : Letters | Corporate Governance
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