C orporate E xcellence through C orporate G overnance

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 “The application of best management practices, compliance of law in letter and spiritand adherence to ethical standards for effective management and distribution of wealth and discharge of social responsibility for 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. Wealth Creation Wealth Management Wealth Sharing ? Distribu- tion Happiness and Prosperity of all Stakeholders Output – Input = Wealth Created • SUPPLIERS Adequate Returns • HUMAN ASSETS Adequate Remuneration • CUSTOMERS Affordable Prices • PUBLIC Payment of Taxes and Partnership in National Development Projects Reinvestment Enhanced Capabilities Sustainability • Research and Development • HR Development • Infrastructure • Risk Management Best Management Practices are Vital Here Law and Ethics are Vital Here Corporate Governance Framework

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

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

12. Advantages of applying Best Corporate Governance Practices

13. Growth Growing Revenues Growing Profits Growing Market Value

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

15. CUSTOMERS INVESTORS Enhanced Trust and Confidence of all Stakeholders EMPLOYEES GOVERNMENT AND REGULATORS 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 thetruth and follow thedharma”

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

24. 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

25. - Mahatma Gandhi “The Customer is King”

26. This is the soul behind modern Marketing Management

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

28. Care for Panchtatvas - Prithvi, Jal, Vaayu, AkaashandAgnithat make a human being

29. This is our approach to Environment Protection

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

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

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

33. Common Factors behind such events

34. Emerging Issues

35. 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…

36. Corporate Governance and Valuation Effect… Few Examples… A Comparison within companies in FMCG Industry with their P/E multiple 36.70 41.39 37.36 31.93 28.79 Industry PE 35.23

37. Corporate Governance and Valuation Effect… Few Examples… A Comparison within companies in Pharma Industry with their P/E multiple 19.37 14.81 14.7 5.35 Industry PE 16

38. Corporate Governance and Valuation Effect… Few Examples… A Comparison within companies in Banking Industry with their P/E multiple 5.97 6.13 6.2 4.81 Industry PE 5.78

39. Corporate Governance and Valuation Effect… Few Examples… A Comparison within companies in IT Industry with their P/E multiple 15.85 19.79 19.58 9.78 7.43 Industry PE 14.49 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

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

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

42. Invested significantly in proactive research and development

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

44. Dealt ethically with customers, government and business partners

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

46. ..and accomplished

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

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

49. 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 .

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