dainik bhaskar milagrow[2]
TRANSCRIPT
Corporate Governance: Roadmap to Corporate Excellence26 March 2011
Validictory address by
Yatish K RajawatGroup Managing Editor, Dainik Bhaskar newspaper Group
“Success in business does not require special gifts, special aptitude, or special training. Effectiveness as an executive demands doing certain—and fairly simple—things. It consists of a small number of things.”
Excellence?
Peter Drucker
Corporate Governance: Roadmap to Corporate Excellence26 March 2011
Yatish RajawatGME, DB Group
Why do you need How can you lay the foundationsSpeed is not importance, sustainability is.
Governance?
Corporate Governance: Roadmap to Corporate Excellence26 March 2011
Yatish RajawatGME, DB Group
Corporate Governance: Roadmap to Corporate Excellence26 March 2011
Yatish RajawatGME, DB Group
Corporate Governance: Roadmap to Corporate Excellence26 March 2011
Yatish RajawatGME, DB Group
Governance Excellence Reputation
Customers demand Reliability
Investors and Suppliers demand Credibility
Employees demand Trustworthiness
Communities demand Responsibility
Corporate Governance: Roadmap to Corporate Excellence26 March 2011
Yatish RajawatGME, DB Group
Corporate Governance: Roadmap to Corporate Excellence26 March 2011
Yatish RajawatGME, DB Group
Why Governance: the tangible outcome
Employees
Customers
Capital market
Community
News media
Better talent for lower salaries
Repeat purchases, builds market share
Higher valuation, lower cost of capital
Empathy during crises
credible publicity vs “paid” advertising
governance
excellencereputation
Corporate Governance: Roadmap to Corporate Excellence26 March 2011
Yatish RajawatGME, DB Group
Corporate Governance: Roadmap to Corporate Excellence26 March 2011
Yatish RajawatGME, DB Group
Think systems: a governance model for excellence
How can a group of peers or friends, act as proxy public shareholders, see to it that the business achieves what it should (normally in terms of shareholder value) and avoids unacceptable situations and actions?
Objective should be to build organization value beyond revenue and profits
How can systems and policies be put in place so that the model is future proof.
Build taxable profits, reinvestment model for the business, HR practices and financial practices.
Corporate Governance: Roadmap to Corporate Excellence26 March 2011
Yatish RajawatGME, DB Group
Corporate Governance: Roadmap to Corporate Excellence26 March 2011
Yatish RajawatGME, DB Group
Board for your company
The board is your alter ego it can be your mentor, your parent or friends
A CEO or owner needs to define it as it can truly give direction not just help in getting business.
The definition or choice of the people you put on board are as important as the business itself
Your company will outlive you and will sustain your identity the board is the first foundation that you lay to ensure this.
If you choose well you will grow well.
Corporate Governance: Roadmap to Corporate Excellence26 March 2011
Yatish RajawatGME, DB Group
Corporate Governance: Roadmap to Corporate Excellence26 March 2011
Yatish RajawatGME, DB Group
Governance must enable excellence A governance model so that your board can:
focus on the larger issues
delegate with clarity
control management's job without meddling
rigorously evaluate the accomplishment of the
organization
truly lead the organization.
Corporate Governance: Roadmap to Corporate Excellence26 March 2011
Yatish RajawatGME, DB Group
Corporate Governance: Roadmap to Corporate Excellence26 March 2011
Yatish RajawatGME, DB Group
Towards a workable model: Assumptions for future
The company belongs to the future shareholders, not to the CEO or his family
The board's prerogatives cannot be assumed or even defined by any subcomponent of the board, including the chairman.
The board's job is fulfilled only if it properly defines expectations and demands achievement.
Corporate Governance: Roadmap to Corporate Excellence26 March 2011
Yatish RajawatGME, DB Group
Corporate Governance: Roadmap to Corporate Excellence26 March 2011
Yatish RajawatGME, DB Group
Worried about today
To begin with, the way you do business now will define the future trajectory of your growth
Scrutiny and disclosures will only increase over time, not decrease
Practices you encourage, people you attract now will determine where they will take you
You cannot wash or rub away the past by deciding in the future that you want to build a different kind of an organization
Future happens now
Corporate Governance: Roadmap to Corporate Excellence26 March 2011
Yatish RajawatGME, DB Group
Corporate Governance: Roadmap to Corporate Excellence26 March 2011
Yatish RajawatGME, DB Group
ENDS. MEANS. LIMITS advantages
The board as a body tells the CEO what to achieve (ends) and what to avoid (unacceptable means)
Evaluation, with such carefully stated expectations, is nothing more than seeking an answer to the question, "Have our expectations been met?“
No confusion about who is responsible to the board or for what board expectations they are responsible.
Short of imprudent and unethical practices, what an organization does (the choice of the CEO—the Means) is allowed to be whatever will best serve what it is for (the choice of the board—the Ends).
Corporate Governance: Roadmap to Corporate Excellence26 March 2011
Yatish RajawatGME, DB Group
Corporate Governance: Roadmap to Corporate Excellence26 March 2011
Yatish RajawatGME, DB Group
Key takewaysGovernance should be seen as the enabler to sustainable excellence and reputation.
Reputation has a tangible impact on the bottomline
Governance must be owner-down not management-up.
The ENDS. MEANS. LIMITS model ensures accountability, transparency, and objectivity, and lays out in clear terms the board-management equation.
Preparing a governance roadmap is more a question of attitude not size or situation.