Corporate affairs minister Veerappa Moily on Wednesday said that he is confident of passing the Companies Bill 2011 in the monsoon session.
“The bill is a product of company body and corporate ethics and it is nothing short of corporate governance,” Moily said on the sidelines of a conclave organised by the industry body Assocham.
He also ensured the economy will come out of the recession very soon with the help of the government policies.
The conclave focused on governance, risk management and compliance – enhancing brand value. Moily said the government can no long afford to ignore governance aspect of business.
“Governance has become an important element on all aspects of economy and the role of government is not confined to only making policies. Apart from government, there is a bigger area of governance adopted and followed by corporate in the economy,” he said.
He said it is important to ensure that governance risk management and compliance are appropriately dealt with and are seen from a holistic approach.
Ashok Chawla, chairperson of the Competition Commission of India said corporates have over the years put together institutions which put them in forefront for better governance, risk management and compliance. He said these issues are critical but it tends to get less importance and are occasionally discussed in the board meeting, whereas they need to be built into the management structure.
“Experts have for decades tried to analyse what makes some countries more successful than others in terms of quality of life. They have found that most important reason is the manmade political and economic institution,” he said.
Bhasker Chatterjee, DG and CEO of the Indian Institute of Corporate Governance discussed why risk management has become timely. He said, “The last few years have shown us what can happen to the so-called best governed companies. They have collapsed because they were blinded by compliance.”
He said, “We did not fall prey to all the examples around us as we have much better economy because of careful economic policies. We are not blind to the obvious threats.”
He added that many countries are building risk standards for different sectors of the economy to ensure that sector understands they have something as a benchmark and thus can take a calculated risk. He concluded saying, “We need to develop such standards for our country too.”
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