Talking to UNI on the sidelines of an international conference on corporate governance, which was held in the city recently, Philip Anthony Armstrong, who is the Heaad of Global Corporate Governance Forum, said, ''As India has emerged as a significant global economy, it becomes important for the Indian companies - listed or non-listed - to become CG compliant.'' He made it clear that India stood just average on the front of implementation of corporate governance.
Mr Armstrong said that the CG lies at the core of economic development and is an essential condition for the effective accountability of companies and their boards and management. Also, he feels that a commitment to sound CG practices and standards through full and proper disclosure, a solid control environment and an empowered active board of directors is attractive to domestic and international investors.
Welcoming the urge made by the SEBI (Securities and Exchange Board of India), M Damodaran, to strike a balance between the strict and self regulation in this connection, he said, ''Once it becomes a reality, Indian companies aspiring to spread their wings abroad will have no difficulty to achieve their goals.'' Comparing a company's boardroom with the football game, he said while regulators act as umpires here, the role of captain is played by the chairman of a particular company. Even if the players of the two opposite teams in the game that were treating each other as economies, would definitely like to enjoy their evenings together forgetting what happened at the playground. Hence he said that regulator's role was of great importance in the market growth of a company.
Talking about the prevailing scenarios in other countries on the issue, he said even as the King's Report in South Africa emphasised on self regulation, the law was different in countries like the USA which believes in strong penalty. Similarly, the directors of a company can be imprisoned for 25 years for violation of CG norms under the Sarbanes Oxley Act of the UK.
Pointing out the challenges being faced by the CG implementation, he said that creating milieu for good governance and ensuring strict regulations were the two issues that are haunting the process.
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