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mr bhandarpadhyaya
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welcome to the wharton school it's a
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great pleasure to have you here
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and thank you very much for coming to
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join us
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thank you professor singh it is also
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very important for us to come to the
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wharton school and discuss with a
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personality like you
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what are the things that the government
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of india and particularly my ministry
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that the ministry of corporate affairs
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is trying to do yeah you know perhaps we
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should start over there
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to my to my knowledge the ministry of
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corporate affairs is a new ministry
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and uh perhaps you can say a little bit
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more about
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what is the context in which it was
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established
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what is the mandate of the ministry and
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in particular if you could talk a bit
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about
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what are some of the key initiatives
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that you're taking i'd be
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very interested to hear some more about
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that thank you very much
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i think it's a very interesting question
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that you have put in
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in fact the ministry of corporate
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affairs
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is not a very new ministry in that so is
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that right
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that's amazing it always existed but it
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was
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like a department maybe it came more
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into the limelight recently yes
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it was department of company fs
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dca is must be well known to you i think
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in fact i didn't realize it one more
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into the other that's very interesting
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it's it must uh sound a familiar ring in
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your hand i know the department of
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company
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company so it was department of company
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affairs
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it was um part of the larger ministry
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like the ministry of law and justice
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and sometimes it was part of the
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ministry of finance
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and the department of company office has
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been changed to the ministry of company
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affairs
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about five years back and then
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realizing the importance of the
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corporate world as such
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and not only the company structure the
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name of the ministry has been changed to
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the ministry of corporate affairs about
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three years back
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so now we are having this ministry which
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is known as ministry of corporate
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affairs
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the mandate of the ministry is really
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very large
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we of course administered the basic act
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which is known as the company act
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and we also have we administered number
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of other
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professional bodies like the institute
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of chartered accountants
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institute of cost accountants and
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institute of company secretaries
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recently we have also the government of
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india has also
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enacted what is known as limited
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liability partnership act
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llp act so number of other
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legal issues which are being sorted out
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in this ministry
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we have our wings which is well known as
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the company law board
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we have also competition commission in
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india
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earlier we had the mrtp commission which
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is the monopolies and restrictive
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grade practices i know it quite well
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because i studied it in management
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school
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that's right so now that act
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that body rather that is no longer in
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existence
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the work of that has been taken over by
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the competition commission
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and also competition affiliate tribunal
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so these are the various activities that
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the ministry has been doing
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but we have taken a very important motto
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the motto of the ministry is that
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corporate growth with enlightened
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regulations
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whatever regulations you are making or
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changing or revisiting
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those have to be enlightened regulations
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regulations for regulation's sake
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whether it is law
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or rule or any code that is not what we
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are looking for
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could you if i may just uh have have you
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hold the thought
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could you say a little bit more about
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the word enlightened would you unpack
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that a little more
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enlightened from what point of view oh
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yeah
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you see the world is changing very fast
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the particularly the in the economic
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sense
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we all know what has happened in 2008
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2009
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the company's structure plays a very
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vital role in that
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in that directions now let me give you
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a slight background
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of the structures that we have in india
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we have something like
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eight lakhs laks means eight hundred
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thousand
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eight hundred thousand yes eight hundred
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thousand companies
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who are active companies registered
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by our register of companies you are
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actually our local officers officers who
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are working in the field
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yes out of that
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we have about 83 000 which are known as
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public companies
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now public companies in the context of
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the
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indian company act means these are the
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companies which are slightly bigger
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which can raise money from the public
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which have the potentiality to be listed
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in future those are the public companies
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and then we have something like six
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thousand around six thousand
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listed companies who are listed in the
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uh
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either in bombay stock exchange or in
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the national stock exchange
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and we have also as you are well
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you must be knowing very well some of
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the government companies
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where the government has a stake more
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than 50 persons
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either state government or the central
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country so this is the basic structure
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of the companies which have been found
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in india
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now the company law is guiding how the
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company will transact
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its business in the sense that the board
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functioning of it
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what we have been trying by enlightened
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regulation is
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that the entire company law is being
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reviewed now
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we'll have a new company law i am sure
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by the end of this year
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at present the bill as you know india is
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a very vibrant democracy
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the bill for the company act
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that has already been placed in the
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house of the parliament
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after long debate and discussions
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and the parliament has also formed a
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standing committee
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with a large number of parliamentarians
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in it
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they have been scrutinizing the bill
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they are looking into clause by clause
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section by section
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what is there in the veil they
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themselves
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have also invited the opinions of others
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the stakeholders
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they may be industries themselves
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they may be ngos they may be
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professional bodies
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so they are giving their views their
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opinions and it has been
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on our website so anybody can see it can
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download it and give their views
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yeah um i'd like to
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have a conversation go in a particular
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direction
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if if that's okay with you and
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let me just give a bit of a preamble to
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what direction i would like us to go
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i have been studying india and indian
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business
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with great interest for almost 20 years
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now
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in fact i'm very very proud of the fact
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that at wharton we have
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a elective course that is completely
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devoted to indian business
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it's called inside indian business and
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i'm teaching it right now
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uh my view mr bhandupadhyay
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of corporations within a society
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within an economy is that it's important
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to think of them as engines of value
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creation
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put another way it is not possible in
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today's
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global economy to think about a country
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that can have a vibrant
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democ a vibrant economy and a strong
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vibrant thriving society without having
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corporations that are in fact on balance
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creating more value in the economy than
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they are taking in
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after all corporations take in many
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inputs
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and then they put out outputs and
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they are the engine of value creation
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value creation can happen in many
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different ways
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of course one important and this is the
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direction i would like to
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get your thoughts on one of the very
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important ways in which value creation
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is
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governed within a corporation governed
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in the interests of the broader society
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and the stakeholders
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certainly the shareholders as well in a
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publicly listed company
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the governance function becomes very
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very crucial
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i know that your ministry actually has
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come up with some new initiatives
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in this domain of corporate governance
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so even before i would have you
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talk about what are some of the
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initiatives you have taken
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perhaps if you have thoughts about what
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is the state of corporate governance in
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india today
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if you might address that a little bit
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and then we can turn next to
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what are some of the initiatives your
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ministry is taking
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thank you very much i think this is the
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most important thing
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that our ministry is trying to do has
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taken initiative
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and we totally agree with you the
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corporations
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are basically there for the creations of
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values
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now the ministry has a responsibility
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towards the corporate growth unhindered
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growth let me
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put it in that way and as you know the
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india
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that we our gdp is growing very fast
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and we all hope and expect that by next
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year it may touch the double digit
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growth
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so unendurance growth of the corporate
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sector is an essential thing
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in the indian context but at the same
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time
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the ministry and the government has a
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responsibility towards investors
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who are investing their money and the
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company's growth
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and towards the general people towards
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the general public
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so what we did in december 2009
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for one week we had the first time
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first ever india corporate week and
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throughout
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india with the help of all the national
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level trade and
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commerce bodies like cii you might be
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well aware of the development
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we told them that the ministry of
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corporate affairs cannot be associated
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with one particular group
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the entire representative of the
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corporate sector australia should come
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forward
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and they did come and along with them
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the professional bodies like the
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institute of chartered accountants
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instead of cost accountants and
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institute of company secretaries they
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also came forward
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so all the entire corporate world of
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india
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they got together and we had
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is unbelievable 124
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different types of programs in one week
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that is starting from 14th december to
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21st december
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throughout india in all taiwan cities
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start to cities
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oh this was happening in multiple cities
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multiplication
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and the main focus was the corporate
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governance
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and the corporate social responsibility
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and as you as you have been teaching
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about the
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indian corporate situations here you are
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well aware that for the last 20 years a
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large number of committees have been
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formed
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sometimes by the government sometimes by
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the affects bodies industry of expertise
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like norrish and the committee
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so what we did from the ministry we took
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off
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and different committees report and the
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latest report noticed in the committee
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and we put it on our website
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we kept it for one month requested
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everybody all the stakeholders to give
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their comments and views
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and we have analyzed collected collated
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these things
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and finally during the the closing
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session of this corporate india
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corporate week
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we brought out what is known as the
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voluntary guideline on corporate
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governance
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in presence of the president of india
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who herself was the chief customer
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in part based on the feedback that you
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heard on the different customers exactly
00:13:40
the committee report and also from our
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own experience knowledge whatever input
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we have got from various stakeholders
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and if i'm a present this is the
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this is the book before you so this is
00:13:54
the book
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it's a voluntary guidelines for the
00:13:57
corporate governance
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thank you very much i look forward to
00:14:01
going through them more carefully
00:14:03
and in great detail perhaps it would be
00:14:05
appropriate
00:14:06
if you would just talk about some of the
00:14:08
highlights of these
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voluntary guidelines you see we first of
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all let us
00:14:14
put it in this way we have kept it a
00:14:16
voluntary guidelines
00:14:18
because the ministry for mca the
00:14:20
ministry for corporate affairs
00:14:23
we don't want to make something which is
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absolutely codified becomes a part of
00:14:28
law say that you follow it if you don't
00:14:30
follow it
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then you are punished we don't want to
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do that in the beginning
00:14:35
what we have in mind is the as i was
00:14:38
explaining to you the corporate sector
00:14:40
in
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india is a very wide spectrum we have
00:14:43
very large
00:14:44
companies who are also becoming now
00:14:47
global companies indeed but we have very
00:14:49
small companies also
00:14:51
so we have given the best of guidelines
00:14:54
as uh which has been evolved over a time
00:14:58
requesting telling the companies that
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you adopt as many guidelines as many
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clauses as possible which are suitable
00:15:07
for your own
00:15:08
company if you cannot for very genuine
00:15:12
reasons
00:15:13
you may not be able to implement fully
00:15:16
all these guidelines that the ministry
00:15:19
has brought it out
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you comply as much as possible where you
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cannot comply
00:15:27
you give an explanation an explanation
00:15:30
not to the ministry
00:15:32
not to our officials not to government
00:15:34
officers but to your shareholders to
00:15:35
shareholders to your board
00:15:37
you discuss now this is very interesting
00:15:40
and i suppose there is a role for these
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voluntary guidelines
00:15:44
on the other hand of course there is
00:15:46
also
00:15:48
clause 49 and
00:15:51
could you talk a little bit about the
00:15:53
relationship between
00:15:55
in a sense the regulatory side of
00:15:57
governance in india
00:15:59
and you know sebby has a role to play
00:16:01
and there's class 49
00:16:02
and there are listing agreements etc etc
00:16:06
and this voluntary guidelines that the
00:16:08
ministry of corporate affairs is
00:16:10
uh putting up how do you see the two
00:16:13
going together
00:16:15
actually this voluntary guidelines is
00:16:17
for everyone
00:16:19
right any corporate body they are
00:16:21
supposed to adopt
00:16:22
this voluntary guideline cv class 49 as
00:16:26
you have referred these are only for the
00:16:28
listed companies these are agreement
00:16:30
basically yeah there's agreement because
00:16:32
there's a listing agreement that you can
00:16:35
be listed only if you follow this
00:16:37
guidelines
00:16:39
and the cv gets also its power under the
00:16:42
company's act
00:16:43
plus there is a special act for saving
00:16:46
but the basic act
00:16:47
which determines the
00:16:51
conduct of the companies in india
00:16:54
that is the company act now as i was
00:16:57
telling you
00:16:58
that the company act itself is being
00:17:01
modified being modified yes it will be
00:17:03
new company act
00:17:04
and many of the guidelines that we have
00:17:07
given in this thing
00:17:08
we will also get more experience from
00:17:11
the corporate sector
00:17:12
right and this will become a part of the
00:17:14
new act
00:17:15
this is this is very helpful in sort of
00:17:18
scoping out
00:17:20
exactly how clause 49 applies to listed
00:17:23
companies
00:17:24
and in fact the voluntary guidelines
00:17:26
you're talking about are much broader
00:17:30
not that i have any desire to be
00:17:32
critical of what you're doing these are
00:17:34
all
00:17:35
good sensible things but i could imagine
00:17:37
a critic might say
00:17:39
uh unless unless you know there is some
00:17:44
there are some teeth to back up any kind
00:17:47
of guidelines
00:17:49
uh you know the the joke that is told is
00:17:52
this is a bit like being a catholic
00:17:56
preacher without
00:17:57
sort of hellfire and hell and damnation
00:18:00
you know
00:18:01
uh what is your thought about that that
00:18:03
how can we
00:18:04
how can companies follow if it is truly
00:18:06
voluntary
00:18:07
and are there limitations is there
00:18:10
thinking that that might change over
00:18:12
time what are your views there
00:18:13
you know i'm i'm very happy that you
00:18:15
raised this point in fact this point was
00:18:17
raised back home in india also
00:18:19
i'm not surprised many many persons but
00:18:22
the
00:18:22
the fact remains that this is the first
00:18:25
step in the beginning
00:18:26
if you kindly grow to go through the
00:18:28
preface that has
00:18:30
that i have written and the forward that
00:18:33
has been given by
00:18:34
our minister honorable minister in
00:18:36
charge of the corporate affairs
00:18:38
it has been made amply clear that
00:18:42
we have given this voluntary guideline
00:18:45
after considering all the pros and cons
00:18:48
of the entire matter
00:18:50
now we want the corporates to be more
00:18:53
responsible
00:18:55
more responsible to themselves to their
00:18:57
shareholders
00:18:58
to the country as a whole and to the
00:19:00
society and to the society
00:19:02
we don't want to press something down on
00:19:04
them on the
00:19:05
and at the first instance we have
00:19:07
written there
00:19:08
that one year we'll see the response of
00:19:10
the corporate india
00:19:12
we'll also take the opinions uh
00:19:15
professors like you i mean who
00:19:16
are sort of opinion makers in the in the
00:19:19
whole world well thank you
00:19:20
and and many of you will be very
00:19:23
surprised to
00:19:24
know it has generated so much of
00:19:26
interest and
00:19:27
enthusiasm that during the last three
00:19:30
months
00:19:32
from the in the ministry itself we have
00:19:34
received as many as 20 delegations from
00:19:37
outside
00:19:38
india and they they are discussing this
00:19:41
matter
00:19:42
there are a number of conferences which
00:19:43
are being held
00:19:45
after this voluntary guidelines have
00:19:46
been issued so we
00:19:48
will gain by those experiences and the
00:19:52
government of india will revisit the
00:19:54
entire thing
00:19:55
after a year or so yes there
00:19:58
it may be decided whether it will remain
00:20:00
voluntary
00:20:01
or as you put it whether some teeth
00:20:03
should be given in it
00:20:05
or some code should be made out of this
00:20:07
voluntary guideline
00:20:09
that decisions will be taken after one
00:20:11
year we are keeping our
00:20:12
options open i understand uh and to your
00:20:16
point about
00:20:17
people like me and my colleagues being
00:20:20
involved in some way we are always happy
00:20:22
to consider that
00:20:24
i should tell you just in passing that
00:20:25
there are several of us
00:20:27
who in fact are very deeply interested
00:20:30
in india
00:20:31
uh four years back uh i think it was
00:20:34
2007
00:20:37
maybe even 2006 i was instrumental in
00:20:41
launching our
00:20:42
corporate governance program which has
00:20:45
been happening every year
00:20:47
and will be held again probably late
00:20:49
this year in december
00:20:50
so there are multiple ways in which we
00:20:52
might be able to
00:20:53
uh provide input to the good things that
00:20:56
your ministry is doing
00:20:58
i want to turn just a little bit mr
00:21:00
bandhabadia to the subject of corporate
00:21:02
governance itself it's very good that
00:21:05
we are talking about the guidelines that
00:21:08
your ministry has put forward
00:21:10
would you like to say a little bit about
00:21:15
and if you are not if you don't want to
00:21:17
go there it's okay we can
00:21:19
change subjects would you like to say a
00:21:21
little bit about
00:21:23
where do you think is room for
00:21:26
improvement in the world of corporate
00:21:27
governance
00:21:29
i don't raise the example
00:21:33
of satyam lightly
00:21:36
you know these things can happen in the
00:21:38
best best governed countries
00:21:41
frankly we in america have our own share
00:21:43
of corporate scandals
00:21:45
so it's not a matter of picking on india
00:21:48
or an indian company in particular
00:21:50
but one of the stunning things to me
00:21:54
as a student of indian business and
00:21:56
someone who actually knew
00:21:58
ramalinga raju and had met him several
00:22:01
times
00:22:02
someone whom we had interviewed for our
00:22:04
book which is just
00:22:05
out called the india of a how india's
00:22:08
top business leaders are revolutionizing
00:22:10
management
00:22:12
we were shocked when we saw this how
00:22:15
could there be a failure
00:22:17
really not only at the level of
00:22:20
corporate governance certainly at the
00:22:21
level of the audit committee
00:22:24
how could there be a failure really in
00:22:26
the auditing process
00:22:28
how could there be a failure of the
00:22:30
internal auditing function
00:22:31
within the company this was rather
00:22:33
astonishing
00:22:34
i fully understand i fully understand
00:22:37
that
00:22:38
this is an aberration this is not a
00:22:39
statement about
00:22:41
indian companies more generally i have
00:22:43
served on the boards of companies like
00:22:45
infosys
00:22:46
and some private companies you know
00:22:48
there are very finely governed companies
00:22:50
but i raised the example just as an
00:22:53
opportunity
00:22:54
to talk about where are the areas in the
00:22:56
domain of corporate governance
00:22:58
where in your opinion improvements could
00:23:00
be called for
00:23:01
and what might be some of those
00:23:03
improvements
00:23:04
i'm very happy that you raised this
00:23:06
issue in fact
00:23:08
this is one of the point that has been
00:23:11
bothering the ministry of corporate fs
00:23:14
while making the laws or making the
00:23:17
guidelines
00:23:18
or sending any other directions to the
00:23:21
companies now you see one thing
00:23:25
i hope that you will appreciate that the
00:23:27
entire shuttle episode
00:23:29
the government of india has played his
00:23:32
part so well
00:23:33
i must say i was quite impressed the
00:23:35
government did play a very positive role
00:23:37
particularly the transition
00:23:39
true and not only that you see more
00:23:41
important in a country like india
00:23:44
not a single person has lost his job
00:23:47
sritham as you said yourself was a great
00:23:49
company
00:23:51
it has very very extremely
00:23:54
competent professionals they have
00:23:57
their work order i mean they are
00:23:59
completely order book full
00:24:02
and they had a great reputation
00:24:05
so what we did is 50 000 persons who
00:24:08
were working with the sattham
00:24:10
the first priority that mca had to see
00:24:13
that the company does not collapse
00:24:15
and the to that extent the ministry was
00:24:18
very very successful
00:24:20
the clv the company law aboard it has
00:24:23
passed an order where the entire
00:24:25
directors i mean the board of directors
00:24:26
were changed
00:24:28
the government nominated directors were
00:24:30
appointed
00:24:31
and they did wonderfully well they did
00:24:33
extremely good work
00:24:34
and that i must say pardon me for
00:24:36
interrupting i must say that
00:24:38
viewing this from the outside that
00:24:40
process was handled quite well actually
00:24:43
it was seamless the getting the new
00:24:46
chairman of the board in
00:24:47
getting the old directors out nominating
00:24:50
new directors
00:24:51
and then giving the core team time to
00:24:54
choose new directors then looking for
00:24:56
somebody to purchase the company
00:24:58
all of this was handled quite fast that
00:25:01
is the strength of the ministry that is
00:25:02
the strength of our legal system that is
00:25:05
the strength of our regulation
00:25:07
so that is what we have been able to do
00:25:10
now day-to-day corporate governance if
00:25:13
you see that
00:25:14
you know they are independent directors
00:25:18
which is sort of a hallmark for the
00:25:20
corporate governance
00:25:22
they have the best of independent
00:25:24
directors i don't want to
00:25:26
name them but you know that they are the
00:25:28
best available
00:25:29
persons in the country now they have
00:25:31
been there for a pretty long time
00:25:33
and somehow you are still referring to
00:25:35
satyam ayah yeah still referenced
00:25:38
but the fact remains the corporate
00:25:41
governance
00:25:42
had to my mind has three basic things
00:25:46
one is that independent directors have
00:25:48
to do their job properly
00:25:50
they must know the paraphrase that
00:25:52
independent directors
00:25:53
have to continue to act like independent
00:25:56
directors
00:25:57
and not become de facto employees of the
00:26:00
company
00:26:01
beholden to the management that in my
00:26:03
experience is sometimes where the crack
00:26:05
occurs you are a professor you said it
00:26:07
very correctly i mean that
00:26:09
that is what that is what it should be
00:26:11
then the auditors have to do their job
00:26:13
also
00:26:14
auditors should not be satisfied what
00:26:16
the management is telling but they
00:26:17
should also do something more than that
00:26:19
like checking how much cash is in the
00:26:21
bank account for instance
00:26:23
so these are some of the things now if
00:26:25
you see our new guidelines
00:26:27
yes we have taken care of this type of
00:26:31
things
00:26:32
yes but ultimately in the ultimate
00:26:34
analysis
00:26:35
it is the question it has become an
00:26:39
ethical question indeed
00:26:40
you know throughout the world we don't
00:26:43
have to
00:26:43
name the companies or name the person's
00:26:45
auditor groups and other things
00:26:47
you know how things have collapsed in
00:26:49
usa things have
00:26:51
not gone so very well in europe also for
00:26:53
some of the companies
00:26:55
now everywhere wherever i am going and
00:26:58
i'm meeting my counterparts in various
00:27:00
countries
00:27:01
this is a very big question the you can
00:27:04
you can frame laws you can frame
00:27:06
regulations
00:27:07
but the persons who will be ultimately
00:27:10
in charge
00:27:11
their ethical standard and also their
00:27:13
technical
00:27:14
qualifications the technical standard
00:27:17
the technical know-how
00:27:19
that should be improved that should be
00:27:21
increased
00:27:22
that is a very important thing and there
00:27:24
i see a very
00:27:26
very positive and distinct role of the
00:27:30
professors like you and the wharton
00:27:32
business school and
00:27:34
other important renowned management
00:27:36
schools throughout the world
00:27:38
because the ethical standard of your
00:27:41
students
00:27:42
who ultimately will be the managing
00:27:45
directors or chairman of many companies
00:27:47
indeed
00:27:48
that has to be improved often yeah if if
00:27:51
we can't do that
00:27:52
if we can't impress upon that that they
00:27:55
are the custodians of the public money
00:27:57
they're the custodians they're the
00:27:59
trustees i mean if we go to the mahmud
00:28:00
mahatma gandhi's concept
00:28:02
of the trustees yeah they are the they
00:28:05
are actually the trustee
00:28:06
of the nation this this you raise i
00:28:09
think a
00:28:10
very very important point uh mr
00:28:12
bhandapathiya
00:28:13
this notion of being a trustee
00:28:17
and leadership as trusteeship right
00:28:22
is something that needs to be
00:28:24
strengthened
00:28:26
not only in india but even in america
00:28:28
and many countries across the world
00:28:32
the notion that you are in a role and
00:28:34
you are entrusted
00:28:36
to look out for the interests of
00:28:39
multiple stakeholders
00:28:41
and that your own interests cannot be
00:28:43
paramount
00:28:45
this is where some of the mischief has
00:28:47
occurred in my opinion
00:28:48
do you have any thoughts on that no i'm
00:28:51
i am totally in agreement with you
00:28:53
and i feel that there whether it is
00:28:56
government bodies or whether
00:28:58
professional institutions
00:29:00
or it is universities academic
00:29:02
institutions like yours
00:29:04
all of us have a role and a
00:29:05
responsibility
00:29:07
that we we should collectively we should
00:29:10
join together
00:29:11
to improve this ethical standard of
00:29:13
these things in whichever way
00:29:15
we feel that the trust is safe the
00:29:16
concept is a good concept
00:29:18
we also feel in in many countries
00:29:21
it is being experimented with how the
00:29:24
people can really
00:29:26
behave in the way they should behave so
00:29:28
that's that's a very very important
00:29:30
chapter
00:29:30
you know and and going back to this
00:29:32
notion and i like
00:29:34
very much your allusion to mahatma
00:29:35
gandhi because he indeed was
00:29:37
writing about the notion of
00:29:40
trusteeship and leadership as playing
00:29:43
the role of a trustee
00:29:45
i think part of what my colleagues and i
00:29:49
have been writing about and have noticed
00:29:51
in our research on indian companies
00:29:53
indian management practices there are
00:29:56
some really unique
00:29:57
ideas different ideas that are coming
00:30:00
out of india
00:30:02
notion of leadership as a trustee for
00:30:04
instance is a
00:30:06
very much part of the indian social
00:30:08
ethos
00:30:09
i'd like to turn before we end here this
00:30:12
very interesting discussion you and i
00:30:14
have been having
00:30:15
i'd like to turn your attention to the
00:30:17
domain of corporate social
00:30:18
responsibility
00:30:20
i have in fact earlier just a few weeks
00:30:23
ago
00:30:24
been teaching a case on tata sons and mr
00:30:27
gopala krishnan who is
00:30:28
executive director of tata sons joined
00:30:31
us by video conference and gave an
00:30:33
absolutely fabulous lecture
00:30:34
to my students and one of the things
00:30:37
that is stunning
00:30:38
about tata sons is that two-thirds of
00:30:42
all the profits made by the tata group
00:30:44
companies
00:30:46
go into two charitable trusts two-thirds
00:30:49
of all the prophets
00:30:50
and they are all plowed back into
00:30:53
society
00:30:54
primarily indian but i think
00:30:56
increasingly global society
00:30:58
i can think of very few companies in the
00:31:00
world
00:31:02
that are doing this and they were doing
00:31:03
it a hundred years ago
00:31:05
so i think there is something unique
00:31:07
about indian
00:31:09
business ideas management practices
00:31:12
corporate leadership particularly in the
00:31:14
domain of corporate social
00:31:15
responsibility
00:31:17
so i'd like to invite you to share your
00:31:19
thoughts
00:31:20
about the domain of corporate social
00:31:22
responsibility
00:31:23
and indeed where india might have ideas
00:31:27
to share
00:31:28
which would change the practice in other
00:31:30
parts of the world as well
00:31:32
and thank you very much in fact you
00:31:34
mentioned about the
00:31:36
tata sans and the tata group they have
00:31:39
been doing this work
00:31:40
for a fairly long time over a century
00:31:44
and we are very proud of that and many
00:31:46
other companies who may not be so well
00:31:48
known
00:31:49
they are also doing a lot of so-called
00:31:52
quote-unquote the corporate social
00:31:55
responsibility activities there
00:31:57
some of our government companies soes
00:32:01
the state uh enterprises
00:32:04
they have been doing also extremely well
00:32:06
in many areas
00:32:08
in fact you were aware that's where the
00:32:09
companies were set up
00:32:11
there was practically nothing no
00:32:12
infrastructure so it was through some of
00:32:15
the asues that
00:32:16
infrastructure in the entire district
00:32:17
maybe have been developed
00:32:19
in that way they have done an enormously
00:32:22
great service
00:32:23
but the ministry of corporate affairs
00:32:26
it uh it has given its due attention to
00:32:30
this aspect also
00:32:32
along with the corporate governance we
00:32:34
have been aware that corporate social
00:32:36
responsibility
00:32:38
is a very important thing for
00:32:41
our indian corporate sector to attain
00:32:43
the maturity
00:32:45
you know there are tata suns there are
00:32:47
other companies also they have been
00:32:48
doing
00:32:49
but many other companies also don't know
00:32:52
how to go about it
00:32:53
or what is the importance about it so
00:32:56
along with the voluntary guidelines of
00:32:58
the corporate governance
00:32:59
we also published voluntary guidelines
00:33:02
from corporate social responsibility
00:33:04
and on the same day it was also released
00:33:07
so we have not given any less importance
00:33:09
to it yes
00:33:10
on the 21st of december these guidelines
00:33:13
have been also released
00:33:14
i would like to present to you also the
00:33:16
voluntary guidelines on cultural social
00:33:18
responsibilities i'd be
00:33:19
very eager to read that as well thank
00:33:22
you thank you and this
00:33:23
here you know many of the concepts that
00:33:25
we have been discussing
00:33:27
many of the concepts had found a mention
00:33:30
here
00:33:30
the corporate social responsibility
00:33:33
nowadays as we look at
00:33:35
it is not a charity i mean sometimes
00:33:37
people think
00:33:38
i mean they sort of mistake it for a
00:33:40
charity
00:33:41
it's not it's much more than that
00:33:44
it's a win-win situation unless you are
00:33:47
involved
00:33:48
in this you have to your brand value
00:33:50
will not improve
00:33:52
the tartars you know throughout the
00:33:54
world everybody
00:33:56
sort of respect the tartars for many
00:33:58
reasons
00:33:59
and certainly this is one of the most
00:34:01
important reason as you have mentioned
00:34:03
yourself
00:34:04
so similarly the brand values of the
00:34:06
companies will improve
00:34:08
in some cases let us take a mining
00:34:10
company a mining company
00:34:12
if it is not greatly involved in the
00:34:14
corporate social responsibility
00:34:16
in its area of operation in the in the
00:34:20
in the modern age
00:34:21
it will be very difficult for them to
00:34:23
carry on even their day-to-day
00:34:24
activities indeed
00:34:26
so it's very important it is not a
00:34:28
one-way flow
00:34:29
it's very important that the company
00:34:31
should realize that
00:34:33
and realize they have a responsibility
00:34:35
towards the largest society
00:34:37
and this will improve their own image
00:34:39
their own brand value
00:34:40
and if i may say so their own businesses
00:34:43
yeah
00:34:44
you know the the very conceptually mr
00:34:46
bandupadia that i have thought
00:34:48
about this domain
00:34:51
corporate social responsibility
00:34:55
you know reflecting
00:34:58
the values the changing cultural
00:35:02
norms of the society in the practices
00:35:05
policies structures uh
00:35:09
philosophies of your company
00:35:12
this reflecting of what's happening in
00:35:15
the rest
00:35:16
of society connecting back to the
00:35:18
foundations of the
00:35:19
society you are part of is what gives a
00:35:22
company
00:35:23
not the legal literally the
00:35:26
the social legitimacy that is required
00:35:29
this is what gives you the right to
00:35:30
exist
00:35:31
people frequently get confused and say
00:35:34
oh the only business of business is to
00:35:36
make money for the shareholders
00:35:38
but first you have to have the right to
00:35:40
exist only then can you make money for
00:35:42
your shareholders so i just wanted to
00:35:44
share that thought
00:35:45
i have one last question before we stop
00:35:48
remember let me let me let me see one
00:35:50
comment one thing about it that i could
00:35:53
not have agreed more with you
00:35:55
on this particular subject we we
00:35:57
particularly feel
00:35:59
that the the social legitimacy as you
00:36:02
put it
00:36:03
very correctly as well as the moral
00:36:05
authority of the company
00:36:07
that improves and increases as
00:36:10
long as they are behaving in a very very
00:36:13
responsible manner absolutely
00:36:15
both in terms of the corporate
00:36:16
governance in terms of transparency
00:36:18
as well as in the corporate society so i
00:36:21
have one last question
00:36:23
and let me set it up by saying
00:36:27
i was very pleased to read a few weeks
00:36:30
back
00:36:31
prime minister dr manmohan singh who
00:36:33
happens to be someone i've met a few
00:36:35
times and i'm
00:36:36
a very big admirer of his he's doing
00:36:38
great things
00:36:40
and very great for india and he will be
00:36:42
remembered
00:36:45
perhaps for hundreds of years because
00:36:47
it's a turning point in indian history
00:36:49
starting in 1991.
00:36:52
he said on a visit to saudi arabia and
00:36:54
this was kind of shockingly positive
00:36:57
that he believes over the next 25 years
00:37:00
the indian economy
00:37:01
is going to grow at 9 to 10 percent a
00:37:04
year
00:37:05
i say this it was shockingly positive
00:37:07
because he's a very conservative man
00:37:09
i know him and yet for him to make this
00:37:12
bold statement he must be very confident
00:37:15
that this can be done
00:37:17
i want to focus in particular on one
00:37:19
thing which in my opinion
00:37:21
is going to be one of the stumbling
00:37:23
blocks and i'd like your comments on
00:37:24
that
00:37:26
my sense is mr bhandupadiyai that i
00:37:29
cannot give you precise predictions in
00:37:31
terms of
00:37:31
how long it will take but one of the
00:37:34
gating factors for india's continued
00:37:36
growth
00:37:38
into becoming the kind of vibrant
00:37:40
economy it has the potential to become
00:37:42
one important gating factor is the
00:37:45
education sector
00:37:48
if you look at global rankings of the
00:37:51
top 500 universities
00:37:52
in the world the shanghai jiaotong
00:37:54
university in shanghai china does this
00:37:57
ranking
00:37:58
there are only two indian institutions
00:38:00
in the top 500.
00:38:03
believe it or not the highest ranked one
00:38:06
is indian institute of science in
00:38:08
bangalore
00:38:09
which is between 200 and 300 in the
00:38:11
world
00:38:12
the only other one is iit kharagpur
00:38:15
which is between 400 and 500 in the
00:38:17
world
00:38:18
by comparison the united states has
00:38:21
about 70 or 80
00:38:23
universities or institutions that are in
00:38:25
there
00:38:26
china has about 30 or 40 and china is
00:38:30
sort of
00:38:30
much more comparable to india
00:38:34
in that context i am very intrigued by
00:38:36
this
00:38:37
news two days ago that the parliament
00:38:39
has passed on monday i think on the 15th
00:38:43
not parliament the cabinet has in
00:38:45
principle agreed
00:38:47
that this new foreign university
00:38:48
education bill
00:38:50
is going to be tabled before parliament
00:38:52
i see this as a very positive step
00:38:55
overall would you comment on the role of
00:38:57
the education sector
00:38:59
because the corporate sector really
00:39:01
takes as input what the education sector
00:39:03
produces
00:39:04
and the corporate sector by itself will
00:39:06
be stymied unless the education sector
00:39:08
is coming along
00:39:09
i'm sure you have views on this would
00:39:11
you share them with us
00:39:13
thank you very much but the point is
00:39:15
that we are all working
00:39:17
to fulfill the dreams of our very very
00:39:20
respected prime minister
00:39:22
and we are working uh in close
00:39:24
coordination with the different
00:39:25
ministries
00:39:27
the ministry of corporate affairs under
00:39:29
the charge of a very dynamic minister
00:39:31
mr salman kursid we have been taking
00:39:35
this you know the corporate governance
00:39:38
corporate social responsibilities
00:39:40
bringing out various acts making certain
00:39:43
platforms available to them
00:39:45
making a cafeteria approach to any
00:39:47
individual they may go for a company
00:39:49
structure
00:39:50
they may go for a one-man company
00:39:51
structure they
00:39:53
may go for a partnership fund they may
00:39:55
go for a limited liability partnership
00:39:57
form
00:39:58
this is what we have been really engaged
00:40:00
in
00:40:01
what you are saying is a very very
00:40:03
important point about
00:40:05
getting our institutes academic
00:40:06
institutes
00:40:08
making them all standard the
00:40:11
under the dynamic leadership of the
00:40:13
higher education minister the
00:40:15
education minister mr sibel mr civil
00:40:18
lots of things are happening lots of
00:40:20
things are changing
00:40:21
i am sure that you will find some result
00:40:24
very quickly from that sector
00:40:26
we have been in close code nations close
00:40:28
touch with them
00:40:30
and india will not be lagging behind
00:40:32
this much i hope
00:40:33
and i can assure you on that i certainly
00:40:36
hope so as well because we at wharton
00:40:38
would
00:40:38
really want to be part of that india of
00:40:41
the next 40 years
00:40:42
as it becomes the third largest economy
00:40:44
in the world
00:40:46
thank you so much
00:41:03
you
