Corporate governance is about applying best management practices, complying with laws, adhering to ethical standards, and effectively managing and distributing wealth for sustainable development of all stakeholders. It specifies the rules and procedures for decision making regarding corporate affairs and directs and controls corporations through the distribution of rights and responsibilities of boards, managers, shareholders, and other stakeholders. Strong corporate governance leads to benefits like growing revenues and profits, a widening customer base, goodwill, and enhanced trust and confidence from all stakeholders. It helps achieve sustainable development of businesses and society through principles like fairness, mutual trust, transparency, and sharing of knowledge and experiences.

1. Corporate Excellence
through
Corporate Governance

2. Corporate Governance rests with the Vision and
Perception of the Leadership

3. and
A Leader need to adopt a
Vision for Corporate Governance

4. Corporate Governance
”Corporate Governance is application of
the best
management practices, compliance of law in
letter
and spirit and adherence to ethical standards
for effective management and distribution of wealth
and discharge of social responsibilityfor sustainable
development of all stakeholders”
The Institute of Company Secretaries
of India

5. "Corporate governance is the
system by which business corporations are directed and
controlled.
The corporate governance structure specifies
the distribution of rights and responsibilities among different
participants in the corporation, such as, the board, managers,
shareholders and other stakeholders,
and spells out the rules and procedures for making decisions
on corporate affairs.”

6. Corporate Governance Framework
Wealth Creation Wealth Management Wealth Sharing
?
Distribu-
tion Happiness and
Output – Input Prosperity of all
= Wealth Created Stakeholders
SUPPLIERS
Adequate Returns
Reinvestment
Enhanced
Capabilities HUMAN ASSETS
Adequate
Remuneration
Sustainability
CUSTOMERS
Research and Affordable Prices
Development
HR Development PUBLIC
Infrastructure Payment of Taxes and
Partnership in National
Risk Management Development Projects
Best Management Practices are Vital Here Law and Ethics are
Vital Here

7. Stakeholders in Value Chain
ROLE OF STAKEHOLDERS
Supply Funds, Value Addition and Give Opportunity to
Materials and Management of Co. to Satisfy their
Services Resources Needs
SUPPLIERS HUMAN
CUSTOMERS
RESOURCE
Adequate Returns for Adequate Salary and Best Quality Products
Funds, Material and Security for leading a and Customer Care at
Services Supplied Happy Life Minimum Prices
EXPECTATIONS OF STAKEHOLDERS
Potential Suppliers, Human Biological, Economic and
Resources and Customers PUBLIC Cultural Environment
PUBLIC EXPECTS PARTNERHIP FOR SUSTAINABLE DEVELOPMENT

8. Principles of Corporate Excellence
Fairness to all stakeholders
Mutual Trust, Transparency and Togetherness
Unrestricted Communication and Continuous Feedback
Sharing Knowledge, Success Stories and Experience
Sharing Happiness and Concerns
Helping Each Other – Round the Clock

9. Infact, these principles are the foundation of
Best Governed Organisations
irrespective of their form and size

10. 7 Deadly Sins
Avoid
Wealth without Work
Pleasure without Conscience
Knowledge without Character
Science without Humanity
Religion without Sacrifice
Politics without Principle
 COMMERCE (BUSINESS) WITHOUT MORALITY
(ETHICS)

11. THE GLOBAL AGENDA 2010
The Issues
 Rethink 20th century Institutions – redesign them to meet 21st century
demands
 Need to adapt new models of cooperation – to reconsider ‘one-size-
fits-all’ model
 New matrix needed to integrate social goals and values.
 Need to protect rights of people – to minimize global systematic
risks
11

12. Advantages of applying
Best Corporate Governance Practices

13. Growing Growing
Revenues Profits
Growth
Growing
Market Value

14. Widening Ready Market for
Customer Base New Products
Widespread Goodwill and Brand Reputation
Access to Global Better Access to
Markets Human Capital

15. CUSTOMERS
INVESTORS CUSTOMERS
INVESTORS
EMPLOYEES
EMPLOYEES
Enhanced Trust and
Confidence of all
Stakeholders
GOVERNMENT AND
GOVERNMENT AND
REGULATORS
REGULATORS
SOCIETY
SUPPLIERS SOCIETY
SUPPLIERS

16. Leading to…

17. Environment
SUSTAINABLE
DEVELOPMENT
Business Society
Civil Society

18. Commitment to well-being and progress of all
stakeholders is our age old mantra

19. Satyam Vada Dharmam Chara
- Taittariya Upanishad

20. “Forever speak the truth and follow the
dharma”

21. Truth : Disclosure of Actual State of Affairs
(Transparency in operations and transactions)

22. Dharma : “Dharma is for the stability of
society, the maintenance of social order and
the general well-being and progress of
humankind.”
- Karna Parva of the Mahabharata. Verse-58 in Chapter 69

23. Corporates should act like honeybee
which suck the nectar of the flowers
without effecting its fragrance and
produce honey for the well –being of
society .

24. Corporate Social Responsibility is not
philanthropy. It is not charity. It is an
investment in our collective future
- Dr. Manmohan Singh

25. Governance Concept in ‘Ramayana’
To provide “the maximum happiness for the
maximum number of people for the maximum
period, based on the principles of Dharma –
righteousness and moral values.”
- Ayodhya Kand

26. “The Customer is King”
- Mahatma Gandhi

27. This is the soul behind modern
Marketing Management

28. Worshipping 33 Crore Godheads
signifying various species, plants,
cosmic elements, …

29. Care for Panchtatvas - Prithvi, Jal, Vaayu,
Akaash and Agni that make a human being

30. This is our approach to
Environment Protection

31. The four essential principles of Mahatma Gandhi's
philosophy
Truth, Ahimsa, Trusteeship and Constructive
Action

32. Corporates are also expected to use their
Capacity, Knowledge and Resources
TOWARDS
Dharma
Maximisation of stakeholders’ value and well-
being and progress of humankind
THROUGH
Truth
Transparency, accountability and truthful
disclosure of state of affairs

33. This is our own age old mantra of
Good Governance

34. History is Witness
Outstanding Performance, D
S Higher Profits, I
U Expanded Market Reach and the like S
C FAILS A
E to protect a company S
S which has put good governance & ethics T
S at the back burner…. E
R

35. Common Factors behind such events
35

36. Emerging Issues
36

37. Secret behind building foundations
..…Only the culture of
strict adherence to good compliance
can keep a company
ahead on sustainable basis , bring in larger profits…

38. Corporate Governance and Valuation Effect… Few
Examples…
A Comparison within companies in FMCG Industry with their P/E multiple
37.3 36.7
41.39 0
6
28.79
31.93

39. Corporate Governance and Valuation Effect… Few
Examples…
A Comparison within companies in Pharma Industry with their P/E multiple
14.8 14.7
19.37 1
5.35

40. Corporate Governance and Valuation Effect… Few
Examples…
A Comparison within companies in Banking Industry with their P/E multiple
6.13 6.2 5.97
4.81

41. Corporate Governance and Valuation Effect… Few
Examples…
A Comparison within companies in IT Industry with their P/E multiple
19.5 15.8
19.79 8 5
9.78 7.43
Companies with better governance is presumed to have a better face and
thus greater P/E Multiple and Enhanced Valuations...
Source: Economic Times, dated 1st July, 2010

42. Companies that have followed these
principles of
Corporate Governance
have

43. Consistently earned high returns,
increased their net worth and
enhanced their shareholders wealth

44. Invested significantly in proactive research and
development

45. Developed people into ‘achievers’ than just
‘performers’

46. Dealt ethically with customers, government and
business partners

47. Maintained and updated their professional
management culture, system and processes

48. ..and accomplished

49. WINNING GROWING
WINNING GROWING
EMPLOYEES INVESTORS
EMPLOYEES INVESTORS
HAPPY
DELIGHTED HAPPY
DELIGHTED SOCIETY
CUSTOMERS SOCIETY
CUSTOMERS
SATISFIED
TRUSTED SATISFIED
TRUSTED GOVERNMENT AND
SUPPLIERS GOVERNMENT AND
SUPPLIERS REGULATORS
REGULATORS

50. Excellence in National
Corporate Governance Excellence
leads to National
Excellence Social
Excellence
Corporate
Excellence
Excellence in
Corporate
Governance

51. Thus, Although a lot has been done, but a lot needs to
be done.

52. Pavan Kumar Vijay
Managing Director
Corporate Professionals India Pvt. Ltd.
D – 28, South Ext- I,
New Delhi 1100049
Tel: +91.11.40622200,
Fax: +91.11.40622201
Email: info@indiacp.com
Visit us at:
www.corporateprofessionals.com