Vice President M. Venkaiah Naidu on Friday lauded the Corporate Social Responsibility (CSR) norm that India proudly shares with only a few other countries, underpining the responsibility of corporations towards the larger society.
“India is on the rise. For the new India to become a reality at the earliest, the corporate sector has an important role to play as a catalyst,” the vice president said, adding, “This requires dynamic, innovative, credible, transparent, accountable, value based and enlightened corporate governance practices.”
While addressing the gathering at the Mint’s Corporate Strategy Awards in Mumbai, the vice president said the Indian corporates need to reform, perform and transform so that they can open up new vistas of global opportunities for the benefit of the country.
“We don’t have many corporations with global presence. Given the size and the potential of our national economy, there is no justification for not having a much larger number of Indian companies with global presence,” he said, adding, “Indian corporates need to reform, perform and transform so that they can open up new vistas of global opportunities which would in turn benefit the country and its people.”
The Vice President said the corporate governance is one key element in improving economic efficiency and growth as well as enhancing investor’s confidence.
“From the Kautilya of the ancient Mauryan Kingdom to the modern corporate empires, the issues of governance have always engaged the attention of the rulers and other stakeholders,” he added.
The Vice President said that in recent times, corporate governance in India has been in the news more for negative than positive reasons.
“All the stakeholders of corporate governance need to draw right lessons for transforming our corporate governance norms at par with the best in the world. This is the need of the hour when we as a nation are keen to draw out the best of our economic might given its acknowledged potential,” he said.
The Vice President said that adherence to good corporate governance practices will help companies improve the confidence of domestic investors and will enable good functioning of financial markets.
“If the countries are to reap the full benefits of global capital market and if they are to attract long-term capital, corporate governance arrangements must be credible, well understood across borders and adhere to internationally accepted principles,” he said, adding, “Even if corporations do not rely primarily on foreign source of capital, adherence to good corporate governance practices will help improve the confidence of domestic investors, reduce the cost of capital, enable good functioning of financial markets and ultimately induce more stable sources of finance.”
He further ephasised the importance of shareholders, Board of Directors, and management as the key constituents of corporate governance.
“The three major aspects of corporate governance are accountability, transparency and equal treatment of all shareholders,” he added.
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