SPECIAL ISSUE ON CORPORATE GOVERNANCE, CORPORATE SOCIAL RESPONSIBILITY & BUSINESS ETHICS - PART 1

CORPORATE GOVERNANCE

Nurturing Corporate Culture With The Wisdom of The Gita - A Gateway For Good Governance

In the recent decades, especially in the post globalised era, the issues relating to Corporate Governance have assumed a great significance and concern. The crisis of credibility and confidence during the early years of the new millennium has been created by the frauds, scandals and failures of several large corporations in the various countries of the world. The major corporations which have created a havoc in corporate world include Enron, Adelphia, Arthur Anderson, Parmalat, Tyco, Global Crossing, WorldCom unconditionally and the recent Satyam scam in India. This has caused people around the world to seriously question the corporate culture, ethics and values of business organizations and its executives, auditor and leaders also. These series of corporate scams and scandals are taking place in the presence of strict laws, rules and regulations such as Sarbanes-Oxley Act 2002 in America, the combined code (1998), which was derived from the Cadbury committee report (1992), Hamphel committee report (1995) and Greenbury committee report (1995) in U.K. Even in India, the corporate world could not remain indifferent to the developments that have taken place in America and U.K. and in other countries of the world. Consequently, various committees such as Rahul Bajaj committee (1997), Kumar Mangalam Girla Committee (1999),Naresh Chandra committee 2002, Narayan Murthy committee (2003) and Dr. J.J. Irani committee report (2005) on Corporate Governance made many recommendations for good governance. In-spite of all these rules regulations, codes and recommendation, the infamous Satyam scam was unearthed in India in January 2009.

Dr.Raj Kumar
Associate Professor
Department of Commerce
R.K.M.V. Shimla
Himachal Pradesh
rkapchp@gmail.com

Corporate Governance In India - Issues and Challenges

The history of the development of Indian corporate laws has been marked by interesting contrasts. At independence, India inherited one of the world's poorest economies, but one which had a factory sector accounting for a tenth of the national product; four functioning stock markets (predating the Tokyo Stock Exchange) with clearly defined rules governing listing, trading and settlements; a well-developed equity culture if only among the urban rich; and a banking system replete with well-developed lending norms and recovery procedures. In terms of corporate laws and financial system, therefore, India emerged far better endowed than most other colonies. The 1956 Companies Act as well as other laws governing the functioning of joint-stock companies and protecting the investors' rights have been built on this foundation. Good corporate governance is characterized by a firm commitment and adoption of ethical practices by an organization across its entire value chain and in all of its dealings with a wide group of stakeholders encompassing employees, customers, vendors, regulators and shareholders (including the minority shareholders), in both good and bad times. To achieve this, certain checks and practices need to be whole-heartedly embraced.

A Review of Evolution and Challenges In Corporate Governance

The subject of corporate governance has come to the limelight after the collapses of the high profile companies. Enron, the Texas based energy giant and Worldcom, the telephone giant, shocked the business world for their unethical and illegal operations. Large and trusted companies from Parmalat in Italy and the multinational newspaper group Hollinger revealed significant and deep rooted problems in their corporate governance. Even the director of New York stock exchange, Dick Grasso has been removed from his prestigious post for the non-compliance of the corporate governance practices judiciously before the public. Corporate governance has, of course, been an important field of query within the finance discipline for decades. Researchers in finance have actively investigated the topic for at least a quarter century.

bk_moohanty@yahoo.co.in

CORPORATE SOCIAL RESPONSIBILITY

Corporate Social Responsibility [CSR] Initiatives of Companies In India

The present day businesses continuously innovate by introducing drastic changes in priorities and bringing consensus on critical success factors. Several such factors that had been put in the backburner by yesterday's managers were pushed to the limelight by today's businesses for survival and growth. The issue of stakeholder welfare is one of such factors that received greater attention from management all over the world. This has contributed wide spread thinking about humanizing and democratizing the process of administration. One of the aspects that is thought of and refined more in the present context on stakeholder welfare is the concept of Corporate Social Responsibility [CSR]. Every business organization is working out a model to implement their CSR initiatives according to the vision of their respective organization.

Reshma K.P
Research Scholar
Post Graduate Department of Commerce
Zamorin Guruvayurappan College
Calicut,Kerala

An Empirical Study of Disclosure Practices In Listed Non-Financial Indian Companies

Corporate transparency and disclosures have gained a lot of momentum in the corporate word since the past few decades. It has become essential for the long-term survival and success of a business. The demand for corporate information emanates from different stakeholders, particularly the financial stakeholders. Information asymmetry between a firm's management and financial stakeholders, equity shareholders and bondholders, call for higher transparency and better disclosure in mitigating the agency problem in corporate governance. Financial reporting and disclosure are a potentially important means for the management to communicate a firm's performance and governance to outside investors. As disclosure improves efficiency of capital allocation and also reduces the cost of capital, almost all countries devote substantial resources in framing and regulating disclosure rules and governance structure that publicly traded firms must follow. The Organization for Economic Co-operation and Development (OECD) report on Corporate Governance and National Development (OECD, 2001) as well as the Asian Development Bank (ADB) study on Corporate Governance and Finance in East Asia (ADB, 2001) highlight recent efforts by many developing countries in improving corporate governance and disclosure structures.

Mehul Raithata
Research Scholar
S.J.Mehta School of Management
IIT Bombay
Mumbai
mehular83@gmail.com

Facets of Corporate Social Responsibility In Today's Era - A Case Study Mahindra and Mahindra Ltd

A business doesn't exist in isolation, simply as a way of making money. Customers, suppliers and the local community are all affected by a business. Products, and the way you make them, have an impact on the environment. Corporate Social Responsibility (CSR) takes all this into account and helps the business to create and maintain effective relationships with your stakeholders. It isn't about being 'right on', or mounting an expensive publicity exercise. It means taking a responsible attitude, going beyond the minimum legal requirements and following straightforward principles that apply, whatever the size of your business. Corporate Social Responsibility is a function of operating a business that meets or exceeds the ethical, legal, commercial and public expectations that society has of business. Corporate Social Responsibility is one such niche area of Corporate Behavior and Governance that needs to get aggressively addressed and implemented tactfully in the organizations. 'Benefit From Corporate Social Responsibility' -publicity like this can be a key part of using CSR to win contracts. People want to buy from businesses they respect. CSR can be particularly effective for targeting ethical companies, the public sector and not-for-profit organizations. At the same time, you should see CSR as part of a continuing process of building long-term value. Everything you do should help to improve your reputation and encourage customers and other stakeholders to want to be involved with you. A business that buys recycled paper - but exploits its customers and ignores the community - has missed the point. Effective CSR like this helps you continue to differentiate yourself. Even with dozens of competitors, a real commitment to CSR lets you stand out.

BUSINESS ETHICS

Ethical Dimensions of Corporate Disclosures In The Globalised Environment

Corporate entities establish accounting systems for generation of information which is generally of financial nature. The information so generated is directed by accounting principles, mandatory requirements, decisional needs, and the standards laid-down at national as well as the international level. A well laid out system of accounting facilitates the measurement of performance, planning and control. The financial and quantitative information generated need to be communicated to the stakeholders in an effective manner, and through appropriate medium, ensuring transparency as well as timeliness. The essence of accounting is in communication.

Dr.Karamjeet Singh
Reader
University Business School
Panjab University
Chandigarh
krjsingh2001@yahoo.co.in

Ethics For Managers In Corporate Governance

It may be appropriate to begin by saying something about the nature and meaning of ethics. Quite a few people will automatically think of ethics as providing a system of guidance based on a set of principles or rules. These rules will help us to determine what is good, bad, right or wrong. There is a good deal of truth in this perception. However, it needs to be viewed in a much broader context.