CII to release a new Code for India Inc. to reinforce good governance practices

Mr Naresh Chandra, Chairman of CII Special Task Force on Corporate Governance announced formulation of a new Corporate Governance Code for India Inc. by CII. This was announced during the National Conference and Annual Session 2009 of CII held at Delhi on 26-27 March 2009 on the theme ‘Turning Crisis into Opportunity : The Role of Governance & Reforms’. Expounding the need for the Code, Mr Chandra said that large, highly visible and publicized corporate scandals often provoke legislative and regulatory actions. CII has always believed that while law may be strengthened when occasions so demand, there are fundamental limits to using legislative and regulatory instruments to enforce better corporate governance. What is required is not further regulations but management of regulation as it exists. The Code would assist companies to take a voluntary step beyond the stated letter of law.

Dr J J Irani, Director, Tata Sons Limited emphasized, “Good corporate governance and ethical behaviour cannot be mandated; it has to come from within.” Attributing the upheaval in the corporate domain for shaking off the complacency, Dr Irani stressed that focus should be on substance and not form and enumerated ten good practices for corporates to follow such as separation of office of Chairman and CEO; ensuring independence of internal audit function, seeking ‘non-compliant’ independent directors.

Mr Anurag Goel, Secretary, Ministry of Corporate Affairs, invited partnership between the Government and the Indian industry for evolution of next generation of corporate leaders who focus on inclusive growth. Mr Goel was congratulated for the swift action by his Ministry during the Satyam episode.

Dr KC Chakrabarty, Chairman and Managing Director, Punjab National Bank said that corporate governance should be paid attention at all times, even when the going is good and not episodically to prevent corporate debacles and case of corporate misconduct.

New Delhi

27th March 2009

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