The focus of the panel discussion will be how to bring out behavioral changes in the corporate sector for good governance and social responsibility. Last two decades have seen extreme applications of the Wall Street mantra:”Greed is Good”. We have seen the richest of the rich falling prey to greed and destroy their own careers and companies resulting in people losing faith in the corporate sector. Corporate excesses have been justified based on this theoretical presumption that has caught the imagination of a generation of professionals. With the realization after the global crisis and the following wealth dilution world over, this theory is finally being challenged at a global level. We want to use this forum to think about the broader questions that the crisis has raised:
How do we build an ecosystem which fosters ethical practices? Do we need to build some new institutions for governance or focus on empowering existing groups? Can we think of new business models based on “Private Property for Public Good”.
Corporations have played a critical role in developing businesses around the world. Globalization has created conditions for corporations worldwide to be able to access markets and create business opportunities in different parts of the globe. This in turn has led to corporations becoming very powerful entities because of their ability to bring in huge investments into a country, create jobs, manufacture goods, provide services and even play a role in ensuring the financial stability of a nation. The revenues of such corporations far exceed the GDP of many countries in the world. All power comes with responsibility, including the power of corporations. Like every important phenomenon, it is necessary to recognize that corporations have to accept greater responsibilities for their actions. With this background, if we see the recent events globally, instead of a culture of recognition of greater responsibility, there has been series of corporate scams globally and a crisis that has been fuelled more by lack of ethics and corporate accountability than natural cycles of the markets.
The panel discussion is expected to focus on the changing dimension of corporate governance in the light of a series of corporate scams in India and the USA that has led to a serious crisis of credibility. The fundamental recognition of the need for seeking a transformation from greed to good is central for responding to the challenges facing the corporation as far as their credibility is concerned. Corporate governance at the heart of it is about accountability. The nature of accountability that corporations have to be subjected to is changed and it is in this context that various stakeholders of corporations need to be involved in the corporate governance framework.
At present the role of the Indian regulator is the central component of corporate governance in India. While this is indeed important, there is an urgent need to recognize that there are other stakeholders in relation to corporate governance including the shareholders, employees, independent directors, and civil society, which are missing in action in India. One of the important ways to seek a stronger and transparent framework for enforcing corporate governance is to consciously not depend upon any single stakeholder, but to move towards empowering other aspects of corporate accountability. This will have significant impact on ensuring that corporate governance standards are duly monitored and are brought to bear to the decision-making processes of the corporations.