IIMA-Leading from the Top , livre ebook

Random House Publishers India Pvt. Ltd. - N Balasubramanian

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138 pages

English

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Although corporations have been around for well over half a millennium, Corporate Governance as a distinctive field of study and specialization is of relatively recent origin. With corporate footprints escalating across industry and service sectors over different geographies around the world, governing the corporation has become an increasingly complex exercise. Professor Balasubramanian explains the three pillars of governance-the shareholders, the board and the executive management including the dynamics of managing board effectiveness-through real life case studies and interactive examples. The author aims to encourage dialogue about leading corporations in an ethical and sustainable manner. In the wake of corporations like Satyam, Sahara, Sardha, SKS Microfinance, and National Spot Exchange making headlines for all the wrong reasons-Leading from the Top becomes essential reading for aspiring directors, budding professions, and the conscientious citizens.

Sujets

Employabilité, métiers et formations

Entrepreneurship

Corporate governance

Economics

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Publié par	Random House Publishers India Pvt. Ltd.
Date de parution	01 mars 2016
Nombre de lectures	0
EAN13	9788184005127
Langue	English

Informations légales : prix de location à la page 0,0480€. Cette information est donnée uniquement à titre indicatif conformément à la législation en vigueur.

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Published by Random House India in 2013
Copyright N. Balasubramanian 2013
Random House Publishers India Private Limited Windsor IT Park, 7th Floor, Tower-B A-1, Sector-125, Noida-201301, UP
Random House Group Limited 20 Vauxhall Bridge Road London SW1V 2SA United Kingdom
This eBook is copyright material and must not be copied, reproduced, transferred, distributed, leased, licensed or publicly performed or used in any way except as specifically permitted in writing by the publishers, as allowed under the terms and conditions under which it was purchased or as strictly permitted by applicable copyright law. Any unauthorised distribution or use of this text may be a direct infringement of the author s and publisher s rights and those responsible may be liable in law accordingly.
EPUB ISBN 9788184005127
To
the Generation Next
Madhu, Rashmi, and Anannya
CONTENTS
Preface
Foreword
Acknowledgements
Introduction
1. Governing the Corporation
An Overview
2. Shareholders
The Risk-bearing Investors
3. Boards and Directors
Stewards and Monitors
4. Board Committees
In-depth Oversight
5. Board Effectiveness
Managing the Dynamics
6. Executive Management
The Doers
7. Corporate Reputation
Ethics, Values, and Citizenship
Epilogue
Making the Difference
Notes
References and Select Bibliography
A Note on the Author
Case Summaries
2.1 Pfizer in India
2.2 Hero Honda
2.3 Sterlite India
2.4 Jindal Steel and Power (JSP)
2.5 BHP Billiton
2.6 Royal Dutch Petroleum in Nigeria
5.1 DCM, Escorts and Swraj Paul
5.2 iGate Global Solutions
5.3 RJR Nabisco and Ross Johnson
5.4 Rajat Gupta, Raj Rajaratnam and Goldman Sachs
6.1 Holcim, Ambuja Cements and ACC
6.2 Tata Motors and Jaguar Land Rover
6.3 Yes Bank
6.4 Lehman Bros
7.1 Johnson Johnson
7.2 Two Faces of US Corporate Philanthrophy
PREFACE
There was a time when we used to read about the corporate failures in the UK, the US, and elsewhere in the developed world and feel relieved that Indian corporate sector had kept itself by and large free from such developments. Of course, there were occasional capital market upheavals such as the Harshad Mehta securities scam and the Unit Trust debacle in the nineteen nineties but these were taken in the stride as serious but relatively rare exceptions. Maybe many corporate misdemeanours were not detected and exposed. But the new millennium started with an unprecedented corporate fraud (Satyam Computers: although surfacing only in 2009, its origins went back to 2002); and as the years passed by, not a day has gone by without some report or the other about corporate dealings that didn t seem right. Maybe our awareness of what is right and wrong in a corporate format had improved with the worldwide increase in corporate crime, maybe our reporting and investigative journalism had come of age, maybe the corporate sector was taking its cue from the scandals in government and political governance; whatever the cause, the striking fact is that much needs to be done to cleanse the corporate system to get it back on track of making business profitable through legitimate means, and ensuring the interests of all stakeholders including all, and especially absentee, shareholders.
There is need for greater appreciation of the basic ground rules in governing corporations. While the board is responsible for overseeing and ensuring good governance, it is equally also necessary for executive management and the ranks down the line to gain such appreciation so that they can perceive their role in the overall framework more precisely and discharge their assigned functions accordingly. This will not of course eliminate devious elements engaging in inappropriate activities for personal gain by design and intent; on the other hand, it would help those who wish to perform the right way but fail because of lack of proper understanding of the corporate format. I would like to believe this latter category represents a vast majority of the population, irrespective of their station in the corporate hierarchy, whether at the top at the board and executive levels or lower down in operational jobs. This short volume is addressed to those who while looking after their interests to the best of their ability, would also like to do so in the right way. After all, means are as important as the ends themselves.
Today s managers and professionals are tomorrow s directors and chief executives. A broader understanding of good governance and its consequences for themselves and the stakeholders they serve would help the boards of the future to better discharge their obligations in full measure. That will be a huge positive for the Indian corporate sector and concomitantly for the wellbeing of the country and its people.
If this volume helps and promotes better understanding and practice of good corporate governance among even a modest proportion of corporate directors, executives and managers, the students and others preparing for such positions, and the practitioners who advise, counsel and guide corporate officers, the book would have served its purpose.
FOREWORD
This book has been written by a person who deserves to be recognized as the father of corporate governance in India. He is undoubtedly one of the foremost thinkers in the field of corporate governance in the world. He has contributed enormously to improving corporate governance in India through his extensive research, numerous publications, teaching in academic and executive programs and participation in actual governance of corporations. This book, Leading from the Top: Directors who make the Difference , takes you through nuances of the entire gamut of issues involved in governing business organizations. The enormously rich experience of the author comes through in the lucidity of the language and the style of presentation. The highlight of the book is the extensive use of appropriate vignettes that capture the essence of ideas and concepts discussed. These provide the readers with anchors to navigate through the landscape of governance. Emphasizing the need for corporations to be ethical and observe the highest standards of probity, the author provides invaluable advice on how boards and individuals must conduct themselves to deliver on the expectations of stakeholders. The book is a must read for all executives. While the relatively junior executives will get to unravel the fuzzy world of top management, the senior executives will learn about how they ought to conduct themselves in the near future when they are given the reigns of governance. Incumbent directors will also find the book useful as a guide to enhance their board contribution.
Samir K. Barua
Professor and Former Director
IIM Ahmedabad
October 2013
ACKNOWLEDGEMENTS
I am humbled by a deep sense of overwhelming gratitude to a number of institutions and people as I begin to record my sincere acknowledgements to those who have contributed to my learning which I have tried to reflect and share with readers in this short book.
The idea of writing this volume was initiated by Professor Samir Barua, then the Director of the Indian Institute of Management Ahmedabad. He has been a source of constant encouragement and support throughout, and has freely given his time going through earlier drafts of this book and suggesting invaluable improvements, besides also writing the foreword; to him I owe a great debt of gratitude.
I have used material from some of the cases authored jointly and I acknowledge with gratitude my co-authors contribution and support; in particular: Samir Barua, Subramanian Raghunath, and Sundararajan Selvaganapathy. I would also like to acknowledge the initial work and research support provided by several of my students and associates in the preparation of the full teaching cases from where many of these summaries have been made.
I acknowledge the support provided by Random House in getting this book to its publication. Milee Ashwarya and especially my editor, Radhika Marwah, have been wonderfully creative and supportive in structuring the book and rendering it reader friendly.
Finally, I acknowledge with gratitude the unfailing encouragement and support I have received from my wife Jamuna (despite her own serious health problems), my son and daughter-in-law, Madhu and Rashmi, and the mature understanding I have been favoured with by Anannya, my six-year-old granddaughter, even when her birth right demands on her grandfather s time were not fully met!
Any remaining deficiencies in the book are of course my sole responsibility which I fully accept.
INTRODUCTION
Everyone remembers God when they are in trouble No one remembers Him in good times If you remembered Him in good times Why will there be any bad times?
-P OET S AINT K ABIR

Satyam, Sahara, Sardha, SKS Microfinance, National Spot Exchange-just to mention a few corporations that made media headlines for all the wrong reasons: poor corporate governance, investor-inimical activities, regulatory circumvention, or even outright fraud on the companies and their shareholders. That India is not any exception and has been in august company elsewhere in the developed world is hardly a consolation for a country that is identified, with reason, as among the potential economic powerhouses of the future. And certainly not for its corporate sector which has shown entrepreneurial aggression not only within the country but also beyond its shores through a significant expansion of its footprint.
Why do companies, their promoters and executives with reputations and track records indulge in such misdemeanours despite the knowledge that long arms of truth and fair play are bound to catch up with them sooner or later? Is there something in the corporate DNA which, like Duryodhana s predicament in the Mahabharata, drives them towards the unethical even while knowing it to be wrong? And should this be happening despit