Corporate India’s affair with Governance was on show on February 14th, at CII’s Mumbai conference on Corporate Governance. The CII’s “Guidelines on Integrity and Transparency in Governance and Responsible Code of Conduct” (GCC) were softly released. On the dais were 5 thought leaders – Mr Shyamak Tata, Chairman, Deloitte India; Mr Keki Mistry, VC & CEO, HDFC Bank; Mr Ashishkumar Chauhan, MD & CEO, BSE; Mr Uday Kotak,MD & CEO, Kotak Mahindra Bank; and Mr U K Sinha, former Chairman, SEBI. All of them could only, however, request business leaders – working directors or owners of large industrial groups – to adopt ‘good governance’. Since no other business leaders were present, there was no direct appeal. Also, the GCC is a ‘Guideline’.Is it time CII involved business leaders who DO good governance? Mr Kotak, CII’s President designate – with his appreciation of the need for good governance –could take this up, before he takes charge?!
Mr Kotak spoke in the Inaugural Session, looking at the situation from the point of view of the Saver/Investor. He said Savers now appear concerned about Return OF Capital, more than Return ON Capital. Savers /Investors are no longer keen on putting their money into Risk Capital. Even Mutual Funds Investment managers, tend to invest in the top 50 listed companies’ scrips rather than in SMEs. For real growth, he said, Indian business needs risk capital, and today it is coming largely from overseas investors. Why? Local investors find it far more difficult to trust the numbers that Indian businesses put out. Recent events, when apparently healthy companies suddenly became insolvent, is causing this lack of trust. Only way, he feels, for trust to be regained and for GDP growth to become 6-10%, is urgent adoption of good governance practices by most companies. He called for a lot of “heart work and mind work” to rebuild the trust of the saver in business’ statements. Businessmen must remember ‘home truths’ in the office.
This is a wake-up call to Indian business. The coming months will show us whether Mr Kotak is a lone voice in a wilderness, or whether Indian business leaders will rise to the occasion, and become leaders of society as a whole.