The Confederation of Indian Industry (CII) made a strong appeal to industry members to sign the Model Code of Conduct for Ethical Business Practices.
“The Code contains the basic principles of doing business ethically. CII strongly believes ethical business practices is a journey in which voluntary adoption of this simplified code is an initial step,” said Mr Moloy Banerjee, Chairman, CII ER Governance Task Force, at the Seminar on Corporate Governance, Business Ethics & Competition Law: Emerging Trends, in Kolkata on 26 August.
“It’s a matter of choice – either we regulate ourselves, or we get regulated, Mr Banerjee said. “Intent, strong leadership and self-motivation are critical to building an ethical and profitable corporation,” added the CII ER Governance Task Force Chairman.
Mr Banerjee, who is also the Managing Director of Linde India Ltd, cited a CII analysis to explain the business rationale, saying the companies which have demonstrated compliance as a core principle have seen their revenues go up by 17%, profits 14%, customer satisfaction 18%, higher customer retention 17%. And crucially, there is 50% less spend on compliance, he said. “The Competition Act 2002 (as amended) follows the philosophy of modern competition laws and aims to foster competition and protect Indian markets against anti-competitive practices,” Mr Banerjee said.
Ms Jyoti Jindgar, Adviser, Competition Commission of India, Union Ministry of Corporate Affairs, explained why and how non-compliance of completion law may pose serious risks to businesses, boards of directors and those held guilty. Heavy penalties, high costs of litigation, damages payable to aggrieved parties are some of the prices an enterprise will end up paying by not complying, she said.
Sharing the Government perspectives, Ms Jindgar said a robust compliant environment will not only make enterprises a lot more efficient and competitive, but also will safeguard from the risk of contraventions. “Consumers also stand to benefit in the process,” Ms Jindgar said.
Mr Bibekananda Mohanty, Registrar of Companies (Kolkata), Union Ministry of Corporate Affairs, stressed the need for self-regulation saying the Government brings in law after law, but India in its pursuit to become a global leader needs “heroes and examples” in the management of corporate bodies. In this era of globalization, corporates must follow best international practices to earn trust from stakeholders, which will in turn go a long way in boosting image and business, he said.
Mr Sandip Kumar Kejriwal, Chairman, EIRC, Institute of Company Secretaries of India (ICSI), said corporate governance is a tool to control the affairs of a company. “The better the transparency of a company, the greater the faith it enjoys from its stakeholders,” he said.
According to Mr Rajesh Poddar, Co-Chairman, CII ER Governance Task Force & Deputy Company Secretary, ITC Ltd, corporate governance is all about ensuring that a firm runs on sound lines through adoption of fair and ethical practices, besides assuring investors of good returns.