Thaindian News

Chennai, Feb 20 (IANS) The existing corporate governance norms and structures are good and need no major overhaul, but some fine tuning may be required to make them applicable to unlisted and small and medium enterprises, speakers at a seminar said here Saturday.
The speakers also felt that growth and prosperity of a nation depends on the character of its people which in turn depends on the education and value systems inculcated in a person since his childhood.

“The overall fabric is good. We may have to iron out some creases. Legislating for exceptions - fraudsters who are in a minority - will put to difficulty the majority,” said T.N. Manoharan, partner, Manohar Chowdhry and Associates, city based chartered accounting firm.

Manoharan, who was appointed by the central government as a director of the scam-hit Satyam Computers and later its chairman to bring back the company from the brink, was speaking at the ‘Corporate Governance - The Way Forward’, a seminar organised by Loyola Institute of Business Administration in association with National Foundation for Corporate Governance.

Citing the paradigm shift in the manner in which business is conducted across the world, he said there was a need to harmonise the regulatory mechanisms to tackle frauds.

“The ramification of a corporate fraud is not restricted only to the jurisdiction where the fraud was committed,” he said.

Speaking about the Satyam Computer balance sheet, he said: “On the right side (asset side) nothing was left and on the left side (liabilities) nothing was right. But such frauds are few.”

Santhosh Shetty, director, Governance, Risk and Compliance Services practice at KPMG, called for some changes in the corporate governance norms and for a credible disciplinary system. He also asked key advisors like auditors to be more accountable.

In India, the challenge is more in respect of promoter managed companies where balancing of their interest with that of minority shareholders is tough, he added.

On avoiding conflict of interests between majority and minority shareholders, Lakshmi Narayanan, vice-chairman at Cognizant Technology Solutions, said: “In our company no one director will hold more than five percent stake. Once a person becomes a director he has to bring down his holding.”

According to S.V. Narasimhan, director (Finance) at Indian Oil Corporation, for better corporate governance the internal audit department of a company is to be strengthened.

“While some companies outsource the internal audit function, it is always better for the internal auditors to understand the business to suggest effective measures,” he added.