Corporate Archives - BOLLYWOOD SURKHIYAN

Corporate Social Responsibility (CSR)

Social responsibility is the theory that every entity has a duty towards the common good of society at large, in order to maintain a balance between economy and ecology. This responsibility can be at an individual or organizational level, but the idea is to give as much good back to the world that we live in, as we take from it.

Economic development has always been seen as a trade-off between sustaining the world we live in and improving the economic climate, more so in urban societies where commerce seems to override the health of the environment. However, this need not be the case. With social responsibility, we can find ways of sustaining a balance between the two by either not engaging in acts that are harmful to the environment (passive) or working towards the advancement of social goals (active).

Corporate Social Responsibility or CSR refers to the efforts of a profit-making organization or business establishment, in the area of social betterment. The World Business Council for Sustainable Development defined CSR in one of it’s publications, as “… the continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as the local community and society at large”. It is often argued that CSR comes directly in the way of an establishment’s fundamental role of economic growth and profit making. However, it is clear that economic growth can only take us so far in a world where human, animal and environmental welfare takes a backseat. CSR is now a vital organ in the machinery of most established organizations the world over.

Similarly, Student Social Responsibility (SSR) and Individual Social Responsibility (ISR) are also viewed to hold both positive and negative repercussions to a society. Should an individual focus on self-interest alone or the larger interests of the community? Should a student concentrate on succeeding purely in academic pursuits, or does he or she benefit from being involved in the welfare of the society? The answer is simple: there is no individual gain when the community suffers; the fruits of one’s academic excellence hold no value when a society isn’t functioning optimally.

To this end, it is up to the individual or the organization to choose an area of social responsibility that they believe they are most suited to contribute towards. A good example of best practices in social responsibility and sustainability comes from Levi Strauss. The company came under fire from Greenpeace for its clean water practices at some of its manufacturing plants in Mexico. Levi’s made an open pledge on its site to work towards this weakness. By re-thinking water consumption at every stage of production, the company now has a new line of jeans, which uses up to 96% less water during the production cycle.

Business Ethics in the World of Corporate Governance

Executive Summary

All businesses are grey. A loaded statement but one which befits today’s business milieu. The debate is on the shades of the color and not the color itself. Wealth creation precedes wealth distribution, an unalterable sequence. There is a growing realization that former belongs to the exclusive domain of business and the latter to a shared domain. Businesses demand autonomy from others to create wealth and others demand accountability from businesses for the wealth created. Both, autonomy and accountability are worthless in isolation. Accountable autonomy is the panacea. Current business landscape is unprecedented. It is a world where the ends and not the means are brought in to question leading to business ethics boiling down to a personal and not an organizational call, taken everyday by millions, closer to the ground to succeed and more importantly survive.

All the stakeholders-management, employees, board, investors and society are asserting their influence simultaneously. A historical perspective on corporate governance suggests different approaches- (organization+stakeholder)-control approach and capital-market control approach dominating at different times and in different geographies. Both approaches have come alive globally and are trying to pip each other.

India Inc. has moved away from regulation toward latitude since early 1990’s and with the markets coming into their own, the governance style seems to be headed the capital-market control way.

Board of Directors, the venerable interface has to ensure accountable autonomy by fostering its own culture which includes promoting constructive dissatisfaction, actively monitoring the firm’s risk policies and practices, not contingent on having considerable expertise in the areas concerned and avoiding soft conflicts.

Enron and other scandals happened at the best of times and at the worst of times. The aftermath ensured till then increasingly becoming adventurous management’s retreat, activism in boards, dispelled smugness of investors and an acknowledgment of fast becoming oblivious society’s rights and responsibilities. Business initiatives with social spin-offs and not the other way around initiatives are welcome as the need is of responsible corporates and not of over-hyped corporate social responsibility.

A culture, undoubtedly percolating from the top echelons fostering openness and adherence to laws is required.

It has to be appreciated by everyone involved but its adoption has to be voluntary and customizable. The organizations should disseminate the information like practices, policies and risk appetite needed to take a fair call and not accord the right to itself of other stakeholders primarily markets to judge the firm. A culture of transparency starts where regulation ends in achieving accountable autonomy. Every stakeholder must understand that she has a role to play and has certain rights and responsibilities. Separations of powers are difficult to achieve but are crucial for the organization to do the right business and for others to ensure that the former does it the right way as the eternal bottom-line is- the business has and will always be managed by executives, investors have and will always be the ultimate decision making authority on investing and society has and will always be affected by the businesses.

Introduction

The world operates like a simple pendulum. Its microcosm, the business world is no exception. One extreme is autonomy and the other is accountability. It is hard to strike a balance between the two. Both are benign in their own space but too much of a good thing is also detrimental. Business environment has and will keep on testing both extremes. When one extreme is about to be reached, then its dire consequences are realized and businesses move back from the brink. The force which pulls them back from the disaster is so potent that it adds tremendous momentum till the other extreme is tested. This process is eternal and gives businesses a grey shade, blurring the line between right and wrong. After the corporate scandals that rocked the world in 2001-02, the pendulum has swung in the favor of accountability. This shift has happened at a time when the businesses around the world are about to peak. Hitherto unexplored markets are being forayed by organizations worldwide. Issues of business ethics, right and wrong, and corporate governance are hot debating points across the business landscape. All parties- management, board, employees, shareholders, regulators and community are asserting their presence. All of them have to collectively make a decisive move as both regulation and latitude are looking equally enticing and as doing the right things is mulling on the imperative of doing things the right way. The world is waiting!

Business Ethics- Individual’s or Organization’s

Dis-connect between an employee and the ground realities widen as she moves up the ladder. Today, businesses are very target driven. At each level, targets are set and are interlinked. The performance of one’s superior is determined by one’s own performance and this process goes on till the very top echelons. Till such time one meets or surpasses the targets no questions are asked on the way of achieving those and disconnect mentioned earlier plays a huge role. It is only when the shortfall occurs, explanations are demanded and then also words like ethics are given a short shrift. In nutshell, only the end and not the means is what matters. In such an environment, where targets are means to not only success but more importantly survival, ethics boil down to a personal call. These calls have to be taken everyday by millions of people in real time with targets and survival at top of the mind.

The line between right and wrong gets blurred. Can one put a number on the price, less than which a gift is considered a culture token and above which it is considered a bribe? Doubt whether any corporate dossier conceptualized at the very top on ethics can address this issue on the ground.

Approaches to Corporate Governance

Over the years, two very distinct approaches to corporate governance have emerged. One is the mix of organization-control perspective and stakeholder-control perspective and other is based on capital market control.

The former approach sacrifices short-term focus at the altar of long-term sustainability. It is based on 1 person 1 vote dictum. The agreed upon goal for the management is to achieve stability and perpetuity of business. Board has representation of employees and society. Major chunk of equity comes from financial and non financial companies, which are ready to wait for longer periods for their investments to fructify. Firms are not too keen on going public thereby not lending themselves to the whims and fancies of markets. Employee welfare, obligation to local community, size and market share make up the essence of this approach. Myopic Market model by Marris is the fundamental pillar of this approach. According to this model, heeding the markets too much has a detrimental effect on the organization.

Excesses in this approach are created by managerial capitalism as executives are given a free hand in managing the show. At times, a host of objectives other than wealth creation are followed.

As the firm expands, it requires additional capital. If this capital is not forthcoming from stable sources like banks then the company has no other choice but to go public. This gives rise to capital market-control system. It is based on 1 share 1 vote dictum. The more the equity held by an investor, the more the firm is at her mercy. Investors are interested in the ends- dividends and capital gains. Hence, companies have to jostle for the mind space of these players. This brings in the short-termism of this approach. This perspective is based on Principal Agent model. Line is crossed in this approach when investor capitalism sets in. All other obligations of the firm are relegated to keeping the share price up and there is intense pressure on executives to perform consistently in the short-run leading at times to violation of norms.

Both the approaches are similar to the extent that they both give minority shareholders a short shrift. They have been taken for granted and most of their rights have remained on paper.

Lost Ground

Recently the stakeholder inclusive approach has lost considerable ground to shareholder savvy approach. The reason is capital becoming mobile. The global investors like private equity funds and pension funds are deluged with choices. But they lack one crucial element which the local investors have which is the closeness to the business which in turn lends stability to the equity provided. This means the firms have to attract these global investors by way of the globally acceptable parameters, toplines and bottomlines or their manifestation- the share price.

Catching up in the offing

What goes round comes back. Human capital is already the most valuable resource of organizations especially the ones operating in the technology sectors. With the focus shifting from attracting capital to retaining talent, the stakeholder inclusive approach with a sharp focus on employees might make up the ground lost in the last two decades or so to the capital-market control approach.

India Inc.’s Governance Evolution

Corporate entities in India stand out in terms of complexities in the ownership structure. The direct ownership of promoters is quite substantial and if that is not enough, the promoters indirectly have tremendous equity in and control of the firm through the rogue holding companies. It was believed that with the capital market reforms initiated in 1991, the dominance of promoters in the firms will pare. But unfortunately the last decade of the 20th century was marred by scams. The corporate entities went in for private placements making use of the relaxed regulations. These developments made the public spooky. In the last few years SEBI has put its foot down to crack down on the perpetrators and raised the disclosure standards leading to a renewed interest in the markets. The corporates are going global, a sign of their enhanced credibility.

Giants like TCS and Infosys have set global benchmarks in reporting standards and have implemented CSR in the fabric of their organizations.

With capital markets becoming dominant as the time passes and as organizations increasingly care to heed the market and keep the investors happy, it is safe to assume that the Indian corporate entities are veering away from organization-control to market-control approach toward corporate governance.

Right Directors mean Right Business

Board of directors is the highest internal governance mechanism in the organization. The board is the interface between external environment and management. The composition of the board reflects this. It has to straddle between providing necessary freedom to the management for wealth creation and protecting the interests of those who help create and of those who share this wealth. Just like an organization has a culture, it is critical for the board given the role it plays to have its own way of getting a handle on issues. No regulation can substitute for this. The non-executive members should meet separately to thrash out issues among themselves to promote ‘constructive dissatisfaction’. As far as the skills of the board members are concerned, they do not need to have finance or risk expertise to play an effective governance role. The task for the board is rather to understand and approve both the risk appetite of the company at any particular stage in its evolution and the processes for monitoring risk.

If the management proposes changing these radically-for example, by switching the portfolio of assets from low to high risk, or by engaging in off-balance-sheet financial transactions that inherently alter the volatility of the business and its exposure to uncertainties-the board should be quite willing to exercise a veto. Also, the management should be sensitive to the tricky context the board operates in and must grasp that directors’ independence can be compromised by ‘soft conflicts’ such as significant charitable contributions to a favorite institution or the employment of board members’ children.

Enron coterie Debacle – The positive fallout

There is a silver lining even in the darkest cloud that burst over the corporate world post-millennium. In the run up to the uncovering of some of the biggest frauds almost all in America, ironically a country which has always consecrated regulations, the markets were increasingly being viewed as infallible. Whatever information emanated from the organizations to the markets was taken as the last word. There was a reason behind this. The rules were set by the market and organizations were just playing by them leading to smugness all around. The disasters were eye openers for the gullible investors. Markets were vulnerable after all. Stricter rules followed. The corporate boards world over became more agile. The managements retreated. To a certain extent a long-term inclusive focus was restored in the firms having benign effects for every stakeholder.

The Undesirable side effect

Innovation is the mantra for success. But for corporates it has become a survival factor. The frauds have happened at the worst time. The organizations need to be more creative. Risk appetite should be high to capture the unexplored high potential markets. This calls for ingenuity on the executives’ part. But the atmosphere has become very restrictive. Regulations like SOX go overboard.

Boards would much rather have a conservative rather than an adventurous management. This does not bode well for the society as a whole as cagey entrepreneurs will not be able to fulfill their outstanding objective-wealth creation.

Business Initiatives with social spin-offs and not vice versa

Prima facie, ITC’s e-choupal venture seems an effort in the direction of social responsibility. But intrinsically the effort makes eminent economic sense.

It is not a subsidy but an effort which is mutually beneficial. Corporate social responsibility enthusiasts might label such efforts as social initiatives. But the bottom-line is that such efforts generate returns, which guarantees shareholder support. Till such time the business gains precede societal benefits and the society appreciates this reality, the long-run sustenance of these initiatives is guaranteed. Responsible corporates and not corporate social responsibility is the order of the day.

Crucial Culture

Culture is the way people behave when they are not being watched. It is very organization specific and very unlike regulation which is procrustean. The magnitude of damage that can be caused by an individual to the stakeholders of the firm increases as he/she moves up the corporate ladder. The power to influence attitudes also increases on the way up. Hence self evidently the top brass of the firm has a big hand in shaping the culture of the firm. If the honcho crosses the line, it sends out an implicit signal to the people lower down to knowingly or unknowingly to act in a similar manner as the stakes are not that high as they are for the men at the top. The trickling down of an open culture might take time but one can be rest assured that the only way in which it is going to impact the firm is positively. But where organizations go wrong is where they expect the same things from culture as the regulators do from regulation. It is never going to be a one size fits all story. This is where the earlier talked about concept of ethics being very individual specific and not organization one comes into picture. Do not impose culture. Let people understand and appreciate it and find their own way of incorporating it into their work life.

The information imperative

A fair judgment is based on fair information. Often, the best appraisal is done by those who are at a certain distance from the subject matter and at the same time affected by it. Organizations err when they try to preemptively guess others’ reactions. This leads to distortion of information. Doing business is the primary task of business; it is not in the best position to evaluate it from different angles. Hence, organizations should pass on information about its policies, practices and risk appetite. Let the other stakeholders primarily the markets assign an appropriate risk premium and cost of capital. Part of this information dissemination has been achieved by regulation manifested in balance sheet et al. The other part has become more crucial as the businesses have grown complex and can only be achieved with the will of the management and the board. A culture of transparency goes a long way in achieving the latter. Of course transparency has its limits.

But voluntary initiatives like Triple Bottom Line reporting which not only cover the financial but also the social and environmental impacts of the company signal a start. All kinds of companies from the ones with most to hide like chemical to the fairly innocuous ones with the least to hide have adopted this practice. Why? It does make social and environmental sense, but more importantly, thanks to competition in and integration of the world economy, it makes eminent business sense.

Conclusion

Wealth has to be created before it can be distributed. The responsibility to create wealth is of business. And responsibilities and rights must go together. Hence, the society cannot disarm business of its rights which are essential for creating value. The spookiness comes in when business accords certain rights to itself by itself. The importance of wealth creation and difficulty in achieving it blurs the fine line.

As we have seen there is no silver bullet for settling issues like business ethics and corporate governance. Separations of powers just like between executive, judiciary and legislature is imperative. No one stakeholder is an apex authority. Everyone has a role to play.

Regulation defines these roles to a certain extent. But it can only do so much. A culture epitomized by the top management and communication of the right information do much more than regulation. At the end of the day we are all human. We think differently and have different takes on different issues. Till such time this fact is appreciated and co-opted by every stakeholder and a healthy debate continues on the rightness of business, we are certain that businesses will keep on doing what they are good at and others will keep making sure that businesses do it the good way.

World’s Biggest Hacker – A Challenge to the Financial, Technology and Corporate Sector Security

Ahmedabad, Gujarat (PRWeb) March 18, 2007 — Born in small village of most famous Indian city known as Pink City of India. Mr. Sharma is in the field of security research from last 8 years. He has now full control over the global web security system. His life was full of struggle and overloaded stress. He mentions his strength and pride by specifying himself as a Full-stop on E-system. His aim was to perform unique tasks across globe, something which no one other then him can perform. He proved this through a LIVE ON AIR telecast on one of the most reputed news channel INDIA TV (http://www.indiatvnews.com). This telecast was aired in the Breaking News on INDIA TV and was the world’s first longest hacking and security related news telecast. This telecast was shown from 9:00 PM to 12:30 AM and is one of the best serialized news programme of India. Minister of Information Technology, Technical Experts, Stock Exchange Experts, Cyber Crime Experts, Indian Star Editors Team and Corporate Profiles were all present during this telecast. Mr. Sharma had hacked several Internet Banking, Internet Trading and Internet Shopping websites all in a single attempt. Recently, Mr. Sharma had also announced about his new security firm Shubhlabh Technologies. He mentions hacking as an expert level work which is technical art of finding vulnerabilities in existing weak security of any online activity through Internet. Kalpesh Sharma, shows the LIVE demonstration on net banking and its loopholes. He proved that no bank is safe for your money. He challenged to all banks that he can hack any bank site because of their loopholes. However, his intention behind proving was to help out peoples become safe and aware of technical security.

First he reserved an airticket on indiatimes.com shopping website for free. The payment was done by hacking the site of IDBI Bank payment gateway. Secondly, he purchased a raincoat from rediff shopping website and payment was done through hacking of Federal Bank. From both websites he received the receipt with order number and confirmed payment that the payment is done and we will deliver it within 3 days…

Alongwith, Mr. Sharma also went for discussion through a debate in the same LIVE telecast with Mr. Dhrender Kumar (Stock Exchange Expert) and Pawan Duggal (Cyber Law Expert) and they felt shocked when they saw all these right in front of their eyes. Mr. Dhrender said that, ” I am shocked to see this situation. Now our money is not safe and we could not take physical risk to keep huge amount of funds with us, because technical era is on it’s way towards progress. In order to avoid this we are using Net Banking, but as seen there are several vulnerabilities in banking system also… “

Mr Pawan Duggal described about some clauses and sections of Information Security Act, and asked peoples who lost their money, can claim up to 10 Million INR. But you have to prove it in the court of law, which is almost very difficult to perform. You can’t get help from consumer court as well, in this situation. No one knows what can be done? Mr. Sharma also hacked the so called safe website of shares and securities trading i.e Indiabulls.com and transferred 100 INR into his Union Bank Savings Account. Indiabulls database site reflected the balance fluctuations, immediately. For discussion on this, Mr Gagan Banga (President of Indiabulls) was called in this LIVE telecast. But instead of accepting his company’s technical mistakes, he challenged against Mr. Sharma’s claims. He fully denied though everything was seen by millions of peoples across nation. He said that, ” It’s not possible to hack our trading website”. Then, Mr. Sharma challenged him to prove it right in that running LIVE telecast, and asked him for oral permissions. Mr. Sharma also added that let public viewers of this telecast give their decisions after he demonstrates it right now. Once Mr. Gagan felt nervous ! because by this they can loose the confidence of people. But at last he accepted that challenge and told to Mr. Sharma that he can come in his office and hack Mr. Gagan’s account. I will give you permission to hack my account, but I can’t give permissions for other hacking other’s accounts. This shows Mr. Gagan have doubt about his website and was afraid of Mr. Sharma’s Challenge.

For further discussion Mr. Shakeel Ahmed (IT Minister of India) came and he told that he is not a technical person, but he will definitely do well for people’s of his country with his technical team… In short, none of our money is safe until and unless, online security vulnerabilities are not removed completely. In order to know more about Mr. Sharma’s research activities and services please go through [http://kalpeshsharma.page.tl]

Planning Corporate Events Using the 5 W’s

Many organizations plan events yearly or for special occasions, such as anniversaries or for holidays. These events may be highly successful or they could turn out as a flop when it comes to meeting the goal for holding the event. Event success can often be determined by appropriate planning and decision making. To aid in the success of future events, below are five questions to consider when planning an event.

Why should an event be held? This question helps to determine goals, possible outcomes, and establish an overall theme for the event. Once the purpose of the event is established, a budget must be determined to pay for the event and travel costs must be considered as well. Knowing the event budget and goals before continuing with planning will help to keep the event within the desired scope. Never lose sight of the event goal even if the budget does not allow for everything, there may be acceptable alternatives, so brainstorm along the way to meet all the event requirements.
What needs to happen at the event? Asking this and brainstorming answers is the first step in creating an agenda for the day(s) of activity. The next step would be developing a project plan for event assignments that include pre and post tasks as well as at the event actions. Will there be speakers, announcements, videos, presentations, exhibits, meals, breaks, recognition or award ceremonies, team-building, fun interactive activities, break out training, or discussion sessions? Determine is any particular equipment pr room set-ups may be necessary to facilitate portions of the event. Decide what type of print materials may need to be available for the event then begin putting that together and arranging appropriate copies and communications.
Who should be invited to the event? Is it for a particular department, a set of executives, one or more work teams, individuals who achieved something, or the entire company? Would this event be something to consider inviting key or potential customers and vendors to? Consider whether a keynote speaker or other special speakers should be part of the event. Also whether people with special skills such as event planners, coordinators, moderators, or facilitators are needed for the success of the event or if this can be done in-house. If someone with speaker or special skills is needed determine how arrangements for them get made and how this might this impact the budget. Also decide what communications need to be sent to those attending and working at the event plus what follow-up is required and when deadlines should be.
When would be the best date(s) and times for holding the event? Determine the length of tine required to accomplish the events goals, and then select three preferred date options to allow for finding a location. The event may be a half day, full day, or over several days. Advance planning makes it more likely to get the perfect location for the event during the preferred time period. As soon as the date is set, start sending communications to potential attendees so they can put it on their calendar. Then continue sending monthly reminders with new tidbits about the event to maintain their interest in attending. Be sure to send a final date/time/location reminder two to five business days before the event.
Where is the event to be held? After determining the happenings and attendance, a location that meets all the needs plus catering options can be selected. Consider whether the event should be held in the local area if it is a short time period and where most attendees are located. Be sure to consider travel requirements and communicate any special instructions for getting to location for locals and others outside the area. If the event is multiple days and the selected location is away from the work area, after-hours activities or entertainment may also need to be considered. Before selecting a location, also determine if some activities are to be done outside or if everything will be done indoors.

To make an organizational event successful, whether it is for a special occasion or a yearly event, start with the five questions above when planning. These questions and associated planning should increase the chances of an event successfully meeting the organization’s goal instead of being a flop where people after the event did not know why they spent their valuable time there.

Qualities of an Effective Corporate Planning Process

Corporate strategic planning is intended to provide both the direction (strategy) and the actions (execution) needed to achieve strategic goals. The combination of smart strategy and successful execution is the hallmark of a great planning process.

So what does this process look like?

It creates a hard link between planning and execution.
It reduces risk by eliminating variability and ambiguity in language, outcomes, and process.
It provides a customer-centered perspective.
It facilitates bidirectional communication.
It enforces accountability.
It empowers executives and staff with “business truth.”
It provides clarity and steps to achieve outcomes.
It can be applied in any context (internally, externally / business, technical).
It provides repeatable, predictable, measurable results.
It enables the organization to develop plans more efficiently with precision delivery.
It provides cost savings through a repeatable set of processes.
It creates minimal intrusion to the organization.

Yet, in recent years we have seen executives grow increasingly skeptical of traditional strategic planning exercises. Why is this? What’s gone wrong with the strategic planning process?

Consider that many planning exercises are carried out in one of two ways: At a fevered pace to set objectives very quickly; or over a very long period of time that has constant interruptions, short meetings, and is primarily focused on current or ad hoc issues that the organization is facing. Either way, we find that management staff is usually focused on short term goals and issues with the most financially significant concerns taking the most attention.

Additionally, in traditional planning, the people who will be most affected by the organization’s plans are often unaware of what the end goals are and have been given varying levels of information to carry out their goals. There is usually a team or set of teams that have been given the “go ahead” to carry out the plans but they often fall prey to office politics, cliques, and business friendships that all impact the ultimate success of the plan and more importantly, the realization of the outcomes that the business is trying to achieve.

All of this adds up to an ineffective strategic planning process that leaves organizations and executives bewildered and wondering why their plans don’t deliver the intended results. Meanwhile, organizations that have managed to create an effective strategic planning process are able to remain focused on delivering value to customers and gaining market share, while also moving toward defined corporate objectives. It is this ability to balance strategy and execution that gives advantage to today’s most successful organizations.

39 Reasons Why I Left The Corporate World & Became A Personal Brand

1. I realized early on that I didn’t fit into the corporate world.

2. I didn’t like the corporate world and all its ‘fakeness’ or its desire to be ‘politically correct’ and ‘polite’. I wanted to call a spade – a spade.

3. It wasn’t me living a life – I was living a routine.

4. I realized I would be a slave forever to this system.

5. Whatever I did or contributed – all that effort wasn’t me.

6. Wanted to Break away from the 9 to 5 lifestyle.

7. Wanted to be an authority & expert.

8. I didn’t want to take someone else’s business card with my name typed on it with a dummy designation and introduce myself as a slave to that company.

9. I saw others earning per hour and enjoying a luxurious life and going for holidays whenever they wanted.

10. I realised there were many people living with Flexibility in Operation & Lifestyle. I wanted part of that.

11. I wanted to create a lifestyle where whatever work and contributions I made – I could take with me wherever I wanted. The problem with working for a company was that – the day I would leave the company – all the contributions I made to the company would be with the company. And if I joined a new company – I would have to start from zero and prove myself from zero all over again.

12. I wanted to earn as much as I like.

13. I wanted to wear – whatever I wanted to wear.

14. I wanted respect for being “ME” and not an “employee” of a respected company.

15. I hated Office Politics.

16. Working for someone was forever unpredictable

17. Success in the corporate world depended on the authority of someone above me. And if he didn’t like me – that was the end of my success phase.

18. I hated pleasing others – Clients, Customers, Boss, Colleagues, Vendors & Suppliers. I was fed up!

19. I didn’t want to dance to anyone’s tunes just because he had a dummy title. And even worse was respecting someone I didn’t want to respect.

20. I wanted to be in control of my own destiny, time and lifestyle.

21. I wanted to earn as much as I wanted & rest & switch off whenever I wanted to with having to get a sick-leave-certificate.

22. I have always been restless, creative, a rebel and loved to do my own thing.

23. Loved reinventing ways and means of working. Constantly trying and experimenting new things.

24. I didn’t believe in reporting to work on time.

25. I didn’t believe in calling anyone above me “Sir” or “Madam” just because he or she had more experience than me in ONLY that given job or because he or she was my customer or client.

26. I kept failing in whatever I was doing because it was at its best – boring! I wasn’t contributing to my own brand. It felt like a job!

27. I felt a greater sense of passion knowing that what I was working for – was my own baby and would be mine forever! I wanted to create my own brand!

28. Even if I put in 100%, the ROI wouldn’t be 100%. It would be less.

29. I didn’t like when my ideas were rejected and I also hated the fact that I had to convince the world for implementing my ideas.

30. The day I resigned from the company – it would be that person’s brand and not mine which would remain.

31. I wanted to be myself – which I could never do working for the corporate world.

32. Every time I changed a job – I had to start from scratch.

33. My progress was based on the whims and fancies of others.

34. Whatever I created or made – was finally – someone else’s. And to watch someone else take credit or get a bonus for it – I hated it.

35. No matter what position or salary or successful I was – End of the day I was recognized as an employee.

36. There would be a limit to how much I earned.

37. No great visionary or legend or artist or memorable brand was an Employee.

38. If I made a good deal or got a bonus I could take many weeks off without any work!

39. There was always the risk of Management Change or Unpredictable factors which I couldn’t control where my hard work could still go down the drain.

Failed Corporate Leadership – Lessons in Corporate Greed

Corporate greed has recently dominated the headlines in the United States. The list of fallen and disgraced Chief Executive Officers and Chief Financial Officers is long and alarming, and the stories emerging from the rubble of major corporations are quite disturbing.

How did this all come to pass?

What were the causes?

Who failed to lead?

What happen to teaching ethics?

Ethics is now being taught in the classrooms in the Graduate Schools of Business throughout American and now the world. It is too little and a very late. The paradox is at those same Graduate Schools of Business, is that less than two decades ago the MBA classes were hearing and learning all the benefits, executive “perks,” tricks of the boardroom, and the tales of “big bucks”, war stories of corporate raiders, merger and acquisition mega-millionaire and billionaires, and king’s ransom “golden parachutes.”

It should not surprise anyone that having Ivan Bosky bragging about his lucrative deals that they were making a lack of morals virtue and coveting all the toys and “perks.” The world of the immoral world of greedy CEO is full of 100 foot yachts, 10,000 sq. ft homes with tennis courts, media rooms, and ten car garages, immorality and affairs, appropriate goal for a senior executive, expected behavior, and mandatory for all successful CEO’s.

For the Ivan Bosky to be invited to deliver a major lecture to all the MBA students of one of the most prestigious Graduate Schools of Business with the unbelievable message: “GREED IS GOOD!” is beyong belief in an institution of higher learning. Universities are supposed to develop are leaders, not our blunders.

It is as sad but telling comment on the state of our collective lack of moral integrity which the popular movie, WALL STREET, had actor Michael Douglas, as Corporate Raider Gordon Geeko, which he portraited as a rich tycoon of industry. In the movie, Gordon Geeko is presented as a powerful deal maker with no morals. Geeko in the movie uses actual quotes and close paraphrases the soon to be indicted, fined, and jailed Ivan Bosky message “GREED IS GOOD!” It is very sad comment that that same message was delivered to the world and all the hopeful employees who now knew that it was OK to steal, lie, and cheat!

The events of the last ten years reveal a material flaw in the moral fabric of some previously well-respected corporate leaders. The ever-present pressure of the next quarter’s profits, and the push to increase “earnings per share” and drive up the stock price have caused some senior executives of American firms to ignore the fundamental morals of honesty, especially if the news is bad. Unfortunately, some of the corporate executives began to believe their own press kits, lost their moral compasses, and fell victims to the disease of corporate greed. All of the executives whose behavior is described above have failed to demonstrate “moral virtue” or live a life consistent with basic honesty, the simple basic laws of the Old Testament’s, “Ten Commandments.”

Just as we hopefully raise our own children by those three great teachers, “example, example, and example,” we must demand that our leaders and other key role models provide the “right example.” Moral virtue has been sadly lacking in these top executives in major American publicly traded corporations. In order to build trust, Americans must require that our corporate and political leaders demonstrate by every action, thought, and deed that they stand for honesty and integrity. The leaders described above failed to be trustworthy. These fallen executive have demonstrated failed leadership.

Let’s stroll through the recent corporate crime scene and the results of preaching in the Ivy Halls in the MBA classrooms that in fact making money regardless of the cost to other and that “Greed is Good!” to the MBA students and entire the world that has unfolded from teaching the “Seeds of Greed.” The combined losses from corporate fraud, corporate greed, job losses, and Federal Government bailouts are climbing daily into the dozens of Trillions of Dollar.

The totals only continue to grow, and the economic problems they create materially adversely effect the stability of the stock market. The true tragedy is the devastation to millions of individual investors’ finances and the personal havoc to the employees who lose not only their jobs but their retirement all at the same time.

Even the watchdog New York Stock Exchange (NTSE) has had a scandal. Retiring Chairman Dick Grasso’s infamous multi-million dollar retirement package, approved by the NYSE Board of Directors, shocked everyone when the over $139.5 million payout package deal became public knowledge.

The senior executives at Enron have become an icon of corporate greed, massive fraud, dishonesty, unethical behavior, and failed leadership. Andrew and Lea Fastow have fallen from grace, plea bargained, and have been convicted. Andrew, Enron’s former CFO, will begin to start his 10-year sentence for securities and wire fraud as soon as his multi-millionaire heiress wife, Lea, completes her one-year prison term for insider trading of Enron stock in her family charity. Lea Fastow, along with Enron senior executives Kenneth Lay, the (now deceased) founder and former Chairman of Enron, Jeffery Skilling, the former President and CEO of Enron, and Richard Causey, Chief Accounting Officer of Enron, all denied any wrongdoing. The juries have tried them and found them guilty, guilty and guilty.

Enron’s Kenneth Lay, Jeffery Skilling, and Richard Causey all arrogantly refused to plea bargain with federal prosecutors, or admit their guilt. All three of them are now tried and convicted on a variety of criminal charges including securities fraud, bribery, collusion and conspiracy to commit fraud, wire fraud, filing false financial statements, and many more. In addition to the criminal charges pending, there are civil lawsuits from investors and employees who have lost billions in the fall of Enron.

The late Kenneth Lay continued to proclaim his innocence of any criminal acts at Enron, even after his conviction. He additionally claimed that he, the founder and former Chairman of Enron, was unaware of the Enron financial details. Yet before the United States Senate Committee Lay instead of testifying he took “the Fifth” The conclusion must be drawn that Lay knows he is guilty of multiple criminal acts. He was clearly not willing to admit his guilt before the United States Senate Committee.

Enron is, unfortunately, just part of the long list of corporate greed plaguing America in the 21st Century. Bernard Ebbers, former CEO of [MCI] WorldCom Inc., was indicted and convicted on charges of conspiracy, securities fraud, and making false regulatory filings. The Prosecutors allege and it was successfully proven to the jury that Ebber’s was the ring leader in an $11 billion accounting fraud.”

Flamboyant and extravagant former CEO of Tyco International Ltd. L. Dennis Kozlowski and his ex-Chief Financial Officer Mark Swartz are both about to head back to Federal Court for a retrial. Kozlowski has been dubbed the poster boy for corporate excess. He was convicted on a number of criminal charges including stealing $600 million from Tyco Corporation, and it’s shareholders..

Kozlowski’s exploits with women and wild spending are all detailed in the book, Testosterone Inc: Tales of CEOs Gone Wild (Byron, 2004). He portrays Kozlowski, along with Jack Welsh, former Chairman of General Electric, “Chainsaw” Al Dunlap of Sunbeam, and Revlon’s Ron Pearlman, as having feet of clay and the morality of rock stars – drunk on power and driven by sex, greed, extravagance, and glamour.

Richard Scrushy, founder and former Chief Executive Officer of HealthSouth Corp, is another in the list of CEOs who deny any wrongdoing. He was acquitted on the criminal charges of financial improprieties. But, William Owens, former Chief Financial Officer of HealthSouth, and four other HealthSouth former CFOs have all plead guilty.

Scrushy was accused of helping overstate the company’s earnings by nearly $3 billion from 1996 to 2003. Scrushy was indicted by a federal grand jury on 85 counts of fraud, money laundering, and other offenses. He faced 650 years in prison and $36 million in fines on those charges.

At Scrushy’s trial, Leif Murphy, a former HealthSouth Vice President, who worked in the firm’s treasury department and is not charged with a crime, provided damaging testimony about Scrushy. Murphy testified that Scrushy had gotten very angry and Scrushy had yelled at Murphy when Leif Murphy challenged Scrushy on the release of false financial information. Not withstanding the fact that Scrushy’s string of four Chief Financial Officers where convicted or plead guilt, Scrushy was found not guilt of all criminal charges.

The government also was seeking $278 million in forfeitures from Scrushy, who has proclaimed “I am an innocent man” many times, including in his interview on CBS’s “60 Minutes” on October 26, 2003. His lawyers somehow managed to get him off on these criminal charges related to major fraud at HealthSouth, only have Richard Scrushy get convicted on charges multiple counts of bribery and his now in prison.

At Fannie Mae, the career of well-respected CEO Franklin Raines came to an abrupt end when the Office of Federal Housing Enterprise Oversight forced a very resistant Fannie Mae Board of Directors to oust Raines. Raines, Fannie Mae’s Board, and his supporters insisted that he wasn’t culpable for the misuse of obscure accounting standards. But his friend thoughts were rejected and his testimony was not accepted as the full truth by the SEC, the U. S. Congress, or the public.

Raines rose from being a poor kid from Seattle to graduate from Harvard, earn a Rhodes scholarship, and becoming White House Budget Director, before being tapped to be the CEO of Fannie Mae. Now Raines’ lucrative severance package (“early retirement”) has become a new issue of contention. There have been well documented cases of massive fraud, mismanagement, and accounting mistakes at Fannie Mae during Raines’ tenure as CEO.

While Raines has never been convicted of perpetrating or approving the fraudulent accounting, there was a major uproar over his severance package when the news broke that he had apparently been negligent in overseeing accounting functions at Fannie Mae. Yet somehow amazingly, the then fallen and sacked Franklin Raines (after the US Government took over and bailed out Fannie Mae) became a “financial advisor” to then US Presidential Candidate, US Senator Barrack H. Obama,

In this post-Enron, post-WorldCom, and post-Tyco world, the rules are being enforced on the playing fields of corporate America. Even one of the largest and most profitable insurance companies in the world, American International Group Inc. (AIG), has had a serious bout with both the Securities & Exchange Commission and the U. S. Justice Department, starting back several years ago.

The financial problems and fraud at AIG really began in 2001 (or maybe even earlier), but took three years for SEC securities regulators to catch it. In 2004, the SEC informed AIG that it was exploring filing securities fraud charges against it for their non arms length relationship with PNC Financial Services Group Inc. and what the SEC call a pattern of helping PNC hide their underperforming loans, starting clear back in at least 2001.

The full impact of the seeds of greed sown earlier this decade and subsequent misdeeds have resulted in the major disaster at AIG, which has now been unveiled in 2008 and 2009. Now, the failing of AIG has resulted in the Federal Government Bailout is costing American’s Billions and Billions of Taxpayer Dollars.

The list of the indicted and fallen corporate leaders is long and growing. In August of 2003 it was reported that story of the misdeeds of Adlephia’s John Rigas, and two of his sons failed came to light. They were indicted and convicted of defrauding Adlephia Communications Corp. of $2.5 billion.

One of the lessons that these leaders should have learned and lived was basic ethics or morals. The Sarbanes-Oxley Act of 2002 [H. R. 3763], passed by the United States Congress on January 23, 2003 and immediately signed into law by President George W. Bush.

From a basic moral, maybe even a religious perspective, the Sarbanes-Oxley Act would not have been necessary if corporate executives had just lived the “Ten Commandments,” or at least just three of them: “Thou shalt not steal,” “Thou shalt not covet,” and “Thou shalt not bear false witness.”

Corporate Governance

Institute of Company Secretaries of India –

“Corporate Governance is the application of Best Management Practices, Compliance of Laws in true letter and spirit and adherence to ethical standards for effective management and distribution of wealth and discharge of social responsibility for sustainable development of all stakeholders.”

Standard and Poor – “Corporate Governance is the way a company is organized and managed to ensure that all financial stakeholders receive a fair share of the company’s earnings and assets.”

Objectives of Corporate Governance: –

Corporate Governance is aimed at creating an organization which maximizes the wealth of shareholders. It envisages an organization in which emphasis is laid on fulfilling the social responsibilities towards the stakeholders in addition to the earning of profits. The objectives of Corporate Governance is to ensure the following:

1. Properly constituted Board capable of taking independent and objective decisions.

2. Board is independent in terms of Non-Executive and Independent Directors.

3. Board adopts transparent procedures and practices.

4. Board has an effective machinery to serve the concerns of the Stakeholders.

5. Board to monitor the functioning of the Management Team.

6. Properly constituted Board capable of taking independent and objective decisions.

7. Board is independent in terms of Non-Executive and Independent Directors.

8. Board adopts transparent procedures and practices.

9. Board has an effective machinery to serve the concerns of the Stakeholders.

10. Board to monitor the functioning of the Management Team.

11. Board remains in effective control of the affairs of the Company.

Elements of Good Corporate Governance:-

1. Role and Powers of the Board.

2. Legislation

3. Management Environment

4. Board Skills

5. Board Appointments

6. Board Induction and Training

7. Board Independence

8. Board Meetings

9. Board Resources

10. Code of Conduct

11. Strategy setting

12. Financial and Operational Reporting

13. Monitoring the Board Performance

14. Audit Committee

15. Risk Management

Secretarial Standards:-

The Institute of Company Secretaries of India has issued the following Standards in order to maintain the uniformity of procedure with regard to the Board Meetings, General Meetings, Payment of Dividend, Maintenance of Registers and Records, Recording of Minutes and Transfer and Transmission of Shares.

A brief detail of these standards is given as under: –

SS1 – Meetings of Board of Directors: –

The Secretarial Standard -1 deals with the meetings of the Board of Directors. It deals with the various aspects of the conducting the Board Meetings, the frequency of such meetings in a year, Quorum required for the meeting, powers of the Chairman in such meetings, and recording of minutes of such meetings.

SS2 – General Meetings: –

The Secretarial Standard -2 deals with the General Meetings. It explains the procedure of conducting the General Meetings, the frequency of meetings in a year, Quorum required for the conduct of the meeting, powers of the Chairman in such meetings, recording of minutes of such meetings, a procedure of voting, etc.

SS3 – Dividend: –

This Secretarial Standard pertains to Dividend. It illustrates the calculation of amount payable as a dividend, declaration of dividend, Treatment of Unpaid Dividend, and Transfer of Dividend to Investor Education and Protection Fund(IEPF).

SS4 – Registers and Records

This Secretarial Standard enumerates the various Registers required to be maintained as per statutory requirements. It requires the following registers to be maintained:

Register of members and Debenture holders.

Register for Contracts u/s 301.

Register of Directors u/s 303.

Register for Transfer of Shares.

SS5 – Minutes

This Secretarial Standard deals with the recording and signing of Minutes of the Meetings.

Minutes should contain:

(a) The appointment of the Chairman of the meeting.

(b) The presence of Quorum.

(c) The fact that certain registers and documents were available for inspection.

(d) The number of members present in person including representatives.

(e) The number of proxies and the number of shares represented by them.

(f) The presence of the Chairman of the Audit Committee at the Annual General Meeting.

(g) The presence if any, of the Auditors, the Practising Company Secretary who issued the Compliance Certificate, the Court appointed observers or scrutineers.

(h) Reading of the notice of the meeting.

(i) Reading the report of the auditors.

(j) Summary of the opening remarks of the Chairman.

(k) Summary of the clarifications provided.

(l) In respect of each resolution, the type of the resolution, the names of the persons who proposed and seconded and the majority with which such resolution was passed. Resolutions should be written in the present tense.

SS6 – Transfer and Transmission of Shares

This Secretarial Standard deals with the procedure of Transfer and Transmission of shares held singly and jointly. The register and records pertaining to transmission should be preserved permanently and kept in the custody of the secretary of the company or any other person authorized by the Board for the purpose.

Factors Influencing the quality of Corporate Governance:-

1. Integrity of the Management

2. Ability of the Board

3. Adequacy of the Process

4. Quality of Corporate Reporting

5. Participation of Stakeholders

6. Quality of Corporate Reporting

Committee Reports on Corporate Governance:-

Narayana Murthy Report on Corporate Governance: –

Corporate Governance is beyond the realm of Law. It stems from the culture and mindset of management and cannot be regulated by legislation alone. Corporate Governance is all about openness, integrity, and accountability.

It is a key element in improving the economic efficiency of the firm. Credibility offered by Corporate Governance also helps in improving the confidence of the investors – both domestic and foreign. It involves a set of relationships between a company’s management, its Board, shareholders, and Stakeholders.

Kumarmangalam Birla Committee on Corporate Governance: –

All companies are required to submit a quarterly Compliance Report to the Stock Exchanges within 15 days from the end of financial reporting quarter.

The Report has to be submitted by Compliance Officer or by the Chief Executive Officer after obtaining due approvals, on the following clauses:-

Board of Directors

Audit Committee

Shareholders/ Investors Grievance Committee

Remuneration of Directors

Board Procedures

Management

Shareholders

Report on Corporate Governance

CII – Desirable Corporate Governance: –

Corporate Governance helps in maximizing the long-term shareholder value. It is more a way of business life than a mere legal compulsion. Four ideas, which should be the guiding force of company’s philosophy on Corporate Governance are:-

– Transparency

– Accountability

– Disclosure

– Value Creation.

The Code of Business Conduct and Ethics helps to ensure compliance with legal requirements and other standards of Business Conduct. All company Employees and Trainees are expected to read and understand this code of ethics, comply with all applicable policies and procedures, and ensure that all agents and contractors are aware of, understand and adhere to these standards.

The Company expects all employees, agents, and contractors to exercise good judgment to ensure all employees, agents, and contractors and to maintain competitive, efficient, positive harmonious and productive Work Environment and business organization.

Insider Trading:-

Insider trading is the trading of a corporation’s stock or other securities (e.g. bonds or stock options) by corporate insiders such as officers, key employees, directors, or holders of more than ten percent of the firm’s shares. Insider trading may be perfectly legal, but the term is frequently used to refer to a practice, illegal in many jurisdictions, in which an insider or a related party trades based on material non-public information obtained during the performance of the insider’s duties at the corporation, or otherwise misappropriated.

Prohibition on dealing communication or counseling on matters relating to inside trading: –

3. No insider shall –

(i) either on his own behalf or on behalf of any other person, deal in securities of a company listed on any stock exchange when in possession of any unpublished price sensitive information; or

(ii) communicate, counsel or procure, directly or indirectly, any unpublished price sensitive information to any person who while in possession of such unpublished price sensitive information shall not deal in securities.

(iii) Provided that nothing contained above shall be applicable to any communication required in the ordinary course of business or under any law.

3A. No company shall deal with the securities of another company or associate of that other company while in possession of any unpublished price sensitive information.