Author – R Shanthi M.Phil
Everyday is a new day to feel the pleasure of life in every second. You know life is such an amusement park filled with lots of rides for every category people. In my view, businessmen’s life is like a roller-coaster ride. You know why…? Because it needs the courage to ride, seeks the capacity to enjoy the thrill and of course ready to undertake the risk of withstanding, besides the oscillation of up and down. Competition is the never ending process in the business world. Based upon the effectiveness of the firm, the business position of staying up or going down would be decided. Every business is subjected to the stages like introduction, growth, maturity and decline which is revealed through the rotation of the ride. But above all, for the safety of the ride, the call for the seat belt is a must. Such seat belt in corporate is called the corporate governance.
Corporate governance is used for the first time by Mr.Robertson which is nothing but the methods and ways through which the companies are directed and regulated to safeguard the welfare of the owners, stakeholders, say, financiers, share holders, society and the government from frauds and scams. As all we know, the company could not be run as a one man army. So, there must be a reasonable profit for all those people who involved in the business based on their efforts. But the problem arises when one or some among that chain desires to get more from the share of others. It is zoomed when this tendency has spread to most of the companies. Cases like sathyam are some of the example.
Corporate governance ensures the accountability, transparency, by making the management responsible. So the government has compelled the listed companies to enclose the corporate governance report with the annual report and subjected the companies for fine and punishment for violation. It is interesting to note a statistic that almost 80 % of the companies have implemented the law and present the corporate governance report. It contains the details like details of the committees in a company, management members, various meetings conducted, and the audited financial details. Since the details are brought to the presence of public the frauds and scams could be reduced and make the companies morally ethically good and socially responsible.
The conflict is that India occupied third place in organising effective governance but scored second place in corruption. Law alone is not effective in making a company free from fraud. There is a story in the corporate world. The government calls for a tender from various nations for construction work. American has quoted that he needs 500$ to complete the work; Chinese asks 300$ to complete the work and Indian seeks 1500 $. The management was surprised to see the Indian’s demand and asked him why…? He secretly explained the officer that if he is granted the work, he will offer 500$ to the officer and take 700$ for him and appointed the Chinese as his employee and complete the work.
Government made rules. But the companies instead of following find ways to make it up and adopts shortcut. This is what the position of corporate governance in many companies. They are showing that they had adopted the principles; but in reality they just has framed like they had adopted the rules. So for the real success, rules alone are not enough; but needs self realisation. While travelling in the business road we may find speed-breakers by our government to regulate the business and to avoid firm’s crashes. But the pitfalls that occurred by the firm’s carelessness and fraud not only affect the speed of firm’s travelling but the entire nation for a long way. We had man power, Brain power and even financial resources. All we lack is the social responsibility. Lets join our hands to create a fraud free business and help our nation to create as the best corporate nation. For that there is nothing to do as special except doing the duty as self satisfied.