India’s target of achieving growth rate of 7-8 per cent will heavily depend upon the corporate governance standards followed by India Inc and gaining investors’ trust to attract risk capital, said Uday Kotak, managing director and chief executive officer of Kotak Mahindra Bank, and president-designate of CII.
“If we aspire for 7-8 per cent or 8-9 per cent growth, changing the mindset on risk capital and building that trust bridge is core to our future,” he said at the 13th National CII Corporate Governance Summit on Friday.
Kotak said India lacks risk capital, and access to such capital will not come easily unless lenders, savers and investors trust firms. He also stressed upon the need for company fiduciaries and stakeholders taking higher responsibility.
During the panel discussion, Keki Mistry, vice-chairman and CEO of HDFC, said while whistle-blower policy is critical, there should also be enough checks and balances to deter complaints with mala fide intentions. He underlined the need for a framework where such complainants are penalised.
Mistry also batted for immunity to independent directors unless there is a wilful fraud. “They cannot be held accountable for the performance or functions which are typically the responsibility of executive management,” he said.
UK Sinha, former chairman of Sebi, said corporate India must gauge horizontal trends of global developments and keep up with them. CII released a report, that made 15 recommendations on corporate governance issues ranging from global practices to regulatory policy suggestions.
In latter half of the summit, Pradeep Ramakrishnan, general manager, Sebi, said independent directors need to do more towards engaging with the firms to protect minority shareholders’ interest.
“If India is to move to a leadership position in the global corporate space, business strategies can only be effective if complemented with responsible governance and ethical actions,” said Chandrajit Banerjee, director general, CII.
(Disclosure: Entities controlled by the Kotak family have a significant holding in Business Standard Pvt Ltd)