Corporate governance issues must be brought to fore: Damodaran

Issues related to corporate governance must be brought to the fore without it being seen as a 'fault-finding exercise', markets regulator Sebi's former chief M Damodaran said today.
Damodaran, who today brought together top regulators, policymakers and industry leaders on a single platform to discuss various aspects of corporate governance, said there is an urgent need to hold such brain-storming sessions so that all issues that require attention get addressed by the management and boards of the companies.
Sebi's current chairman Ajay Tyagi, as also industry leaders such as Azim Premji and former SBI Chairman Arundhati Bhattacharya were present today here at the first day of the Fourth Annual two-day Corporate Governance Summit, Gatekeepers of Governance, organised by Excellence Enablers, a niche Corporate Governance advisory firm, founded by Damodaran.

The Summit is being attended by regulators, corporate chieftains, eminent lawyers, chartered accountants, other finance professionals, board members and the like.
Damodaran said the speakers today talked about the need to bring all corporate governance issues to the fore, without that becoming a fault-finding exercise, so that necessary safeguard and remedial measures can be taken.
The industry leaders and regulatory official also observed that people often point fingers at promoters, but there could be others as well who share the blame, he said.

Another key issue discussed today was whether there were excessive regulations in India and was there a case for moving from rule-based regulations to principle-based regime.

Damodaran said the industry leaders, including some former PSU chiefs, noted why public sector should not follow greater regulatory scrutiny just because the government was their largest shareholder.
Other areas discussed included engagements between shareholders and the management and issues concerning independent directors.
"How to get more value from independent directors. Should they have better understanding of the industry and the business and yet function in a manner that is not disruptive? What should be the evaluation system for the boards? All these issues need an answer and were discussed in detail," Damodaran said.
A former IAS officer, Damodaran served as Sebi Chairman from February 18, 2005 to February 18, 2008 and is credited for initiating several key reforms in securities markets and on corporate governance.

Damodaran said there is an urgent need today, more than ever before, to ensure that companies are run in a manner consistent with the interest of all stakeholders.
The two-day summit he has organised is discussing various issues including regulatory impact assessment, public sector governance, promoters and corporate governance, Stakeholders - Engaged Actively or Married Unhappily?, IDs Independent, Interdependent or I'm dependent?, KMPs (Key Management Personnel) Supporting Actors or Scriptwriters?.
Besides the annual summit, Damodaran's Excellence Enablers has also organised over 50 round-tables with different categories of stakeholders in order to understand their perspectives.