Prez for stronger corporate governance norms

As the Satyam fraud gets bigger with each passing day, President Pratibha Patil today said stronger corporate governance norms need to be put in place.

Addressing the nation on the eve of the 60th Republic Day, the President also favoured strengthening oversight mechanisms for financial institutions.

“Some companies that over-extended or functioned in an unethical manner have caused losses to shareholders. Such incidents profile the need for stronger corporate governance. There must be clear principles of accountability when such losses take place. The richness of a few cannot be at the cost of depriving others of their due,” she said today.

Earlier this month, Satyam Computer Services founder and chairman B Ramalinga Raju stunned the world when he disclosed that there was a gap of over Rs 5,000 crore in the company’s books. Since then, questions have been raised on the role played by independent board directors and auditors.

The government has moved fast and appointed a new board to run the company, even as investigations by various agencies into the fraud have gathered steam. Still, the call for stringent corporate governance norms has got louder.

Patil called for co-ordinated action to deal with the global economic meltdown. “As governments take necessary domestic measures to ensure that financial institutions and companies adhere strictly to high standards and conduct, it should be accompanied with greater international co-operation so that there is co-ordinated action in this regard,” she said.

“India will bring to the global discussions considerable weight and meaningful contribution for a more credible and viable financial structure.”

In a clear indication of the priorities of the central government, the President emphasised that the agriculture sector could act as a catalyst for stronger and sustainable growth. “The nation must, at all times, be focused on its agriculture sector. By strengthening our agriculture economy, we can bring about an upgrade in this sector, and also create internal economic demand, through enhanced incomes of the farmers,” she said.

For curbing terrorism, Patil emphasised the need for a “co-ordinated and concerted approach by all agencies” as the challenge highlighted “the need to reinforce monitoring and response mechanisms”. Patil has also asked for more responsible behaviour from the media in addressing these challenges. “Technology should be used to counter terrorist threats to the nation. We should be far ahead of the terrorists who are increasingly using sophisticated technology to carry out their violent agenda,” she added.

In a veiled attack on Pakistan, she also brushed aside the theory of non-state actors in terrorism. “We are located in a region which harbours the epicentre of terrorism. Arguments that terrorism is being perpetuated by independent actors are self-defeating and cannot be accepted. Countries must own up their responsibilities as must the international community in defeating terrorism,” Patil said.