Corporate Governance

22 August 2003
To: The Delegates, AIMS Convention 2003
Dear Friends,
I request you to kindly see the following viewpoint. It was posted last week on the Prime Minister's Electronic Discussion Forum in response to a query on the subject of "Corporate Governance". I would be happy if my doubts are proved baseless.
Regards,
Kaushik Sahu
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17 August 2003
In response to PMO's query:
Corporate governance is in the news these days. What steps and measures do Indian companies need to take in this direction?

Kaushik Sahu responds:
Dear Sir,
The theme of the AIMS National Convention 2003 (22-24 August 2003) is "Corporate Governance and Corporate Citizenship: Challenges for Business & Management Education." It will be held at the Xavier Institute of Management, Bhubaneswar.
The best way of supporting Corporate Governance initiatives is by "walking the talk" rather than by "talking the talk". I doubt if this convention will be ever able to showcase good models of leadership by examples. Corporate Governance in India will get a fillip only when management schools start to sincerely adopt ethical business practices. To be able to showcase such models, Indian B-Schools have to learn a lot from people like Mr. Narayana Murthy. The corporate governance policies of Infosys, which has taken note of the recommendations made by the Kumar Mangalam Birla committee, can be adapted to a certain extent for effective Education Governance. The main idea is to learn some of these best practices and then develop and adopt even better models of Governance as a Management School involved in training future managers.
It is high time the Business surveys stopped measuring a B-School in terms of the number of MNCs turning up for placements. There is no point in glorifying MNCs having poor governance track record. The focus should be rather on the number of companies that adopt good Corporate Governance models while doing business in India. The focus should be on companies that insist on good governance models in Educational Institutes. All things that are necessary for a public sector organization to stand up to public scrutiny should be also applied to the private sector. The citizens’ right to information need not be limited only to the public sector. Efficient and effective IT-enabled regulatory mechanisms are needed both in the public and private sector to stimulate good governance.
Organizing and hosting conventions without following it up by actions may not give the boost to Corporate Governance in India.
Regards,
Kaushik Sahu, Ph.D. (Massachusetts),
Professor, Xavier Institute of Management, Bhubaneswar - 751 013, India
(http://home.ximb.ac.in/~kaushik/default.htm)
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Civil Society and DFID

To: Department for International Development, 17 Forest Park, Bhubaneshwar 751001, Orissa, India [By e-mail To: dfid-bhubaneswar@dfid.gov.uk cc: r-sharp@dfid.gov.uk]

Dear Sir/Madam,

This has reference to your advertisements in Dharitri and The New Indian Express dated 17 August 2003 on "Expressions of Interest for Civil Society and Poverty Programme". It invites expressions of interest from Orissa-based Civil Society Organizations for developing partnerships with DFID inorder to help strengthen the capacity of poor people to articulate their needs and improve the policies that affect them. DFID wants to support advocacy, training, capacity-building and research initiatives for strengthening decentralised governance.

Decentralised governance is a lofty ideal and the Indian Government has already started taking adequate measures to ensure greater devolution of power. These actions are quite commendable and one can see the instances of the same through various programs trying to strengthen regional Institutions. See for instance the advertisements related to Science and Technology issued by the GoI in the above dailies. Several other Govt, initiatives can be also highlighted where the focus is shifting towards eliminating regional imbalances. DFID is nowhere close in matching up to these efforts made by the Govt. of India (GoI). By targeting poor states like Orissa, does DFID realize the damage it is doing to the people? Does it realize how it is taking away the freedom of our people by making them economically dependent on the DFID aid? Instead of making the people self-reliant it is making them highly dependent.

DFID's role in promoting organizations advocating "limited government" by seeking "economic, social, and cultural independence from the Indian state" may go against the people of our State. Recently I had seen a notice announcing a seminar on Liberty and Society initiated by one Centre for Civil Society at the Xavier Institute of Management, Bhubaneswar. This organization was advocating on similar lines. It has been often observed that DFID reposes greater faith in the disbursement of funds through the NGOs and other private organizations.

May I know what standards are being used in ensuring greater transparency and accountability from the private sector? Does DFID uphold the same standards for the private organizations as it advocates for the Govt sector in matters related to the Freedom of Information? These are serious questions and cannot be ignored by agencies like DFID and World Bank.

It would be nice if you could respond to these concerns coming from an Orissan who is deeply interested in good governance in all sectors. For all you know, the Civil Society that you may be supporting might be stifling the genuine voice of dissent.

The Indian Democracy has allowed several watchdog Institutions to scrutinize the actions of Govt. functionaries. But do we have strong watchdog Institutions for private organziations? If so, are they doing their jobs properly? Under the liberalized regime, we have not been able to set-up effective regulatory bodies for checking the exploitative advances of the private sector. The poor consumers are the sufferers.

Has DFID ever thought of supporting Civil Societies to set-up regulatory bodies in the private sector? Be it Health, Education or Social Sector development (by NGOs) Orissa needs efficient and effective regulatory mechanisms to safeguard the interest of the common people. The central Government is trying hard to bring in these mechanisms. But, is DFID willing to take up this challenge?

Sincerely,
Kaushik Sahu

=========Your Advt. taken from the DFID Website is attached below===========
PS: This note is marked to a few other stakeholders of Orissa who are perhaps equally unhappy about certain standards being adopted by the partners of DFID in Orissa.