Efforts to Improve Corporate Governance

A National Foundation for Corporate Governance is set up in association with the CII, ICAI
and ICSI to provide a platform to deliberate on issues relating to good
corporate governance, to sensitize corporate leaders on the importance of good
corporate governance practices as well as to facilitate exchange of experiences
and ideas amongst corporate leaders, policy makers, regulators, law enforcing
agencies and non-government organizations. Good corporate governance recognizes
the diverse interests of shareholders, lenders, employees, government etc. The
underlying principles of corporate governance revolve around certain basic
inter-related segments. They are transparency, disclosure, independence of
board & auditors, management ownership of corporate actions and Ethical
business.

For effective corporate governance there is a need of selecting meritorious, diverse, ethical
and socially oriented executives. Boards of directors cannot function
effectively if they do not have the “right people” as members and the “right
chairman” as leader. Moreover, they must also be supported by the “right”
attitudes in the part of management, the external auditor and other advisors.
Sound, effective corporate governance must include a Board of Directors
independence from management but accountable to the company and its
shareholders. It is also important to understand that diversity and
independence are important because the best collective decisions are the
product of disagreement and contest, not consensus compromise. All board
members need to have knowledge and experience that allows them to demonstrate
results orientation, strategic orientation and at the same time, be both
independent and collaborative.