Corporate Excellence through Corporate Governance

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Corporate Excellence through Corporate
Governance
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• Corporate Governance rests with the Vision and
  Perception of the Leadership

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• and
• A Leader need to adopt a
• Vision for Corporate Governance

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Corporate Governance
The application of best management practices,
compliance of law in letter and spirit and
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
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"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.
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Corporate Governance Framework
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Stakeholders in Value Chain
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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
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Infact, these principles are the foundation of
Best Governed Organisations irrespective of
their form and size
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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)

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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

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• Advantages of applying
• Best Corporate Governance Practices

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Growing Revenues
Growing Profits

• Growth

Growing Market Value
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Ready Market for New Products
Widening Customer Base

• Widespread Goodwill and Brand Reputation

Access to Global Markets
Better Access to Human Capital
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CUSTOMERS
INVESTORS
EMPLOYEES

• Enhanced Trust and Confidence of all Stakeholders

GOVERNMENT AND REGULATORS
SOCIETY
SUPPLIERS
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• Leading to

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• Commitment to well-being and progress of all
  stakeholders is our age old mantra

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Satyam Vada Dharmam Chara
- Taittariya Upanishad
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• Forever speak the truth and follow the dharma

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• Truth Disclosure of Actual State of Affairs
  (Transparency in operations and transactions)

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• 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

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

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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
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• The Customer is King

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• This is the soul behind modern
• Marketing Management

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Worshipping 33 Crore Godheads signifying various
species, plants, cosmic elements,
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• Care for Panchtatvas - Prithvi, Jal, Vaayu,
  Akaash and Agni that make a human being

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• This is our approach to
• Environment Protection

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The four essential principles of Mahatma Gandhi's
philosophy
Truth, Ahimsa, Trusteeship and Constructive Action
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• 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
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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
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Common Factors behind such events
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Emerging Issues
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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
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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
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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
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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
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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
7.43
9.78
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
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• Companies that have followed these
• principles of
• Corporate Governance
• have

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

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• Invested significantly in proactive research and
  development

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• Developed people into achievers than just
  performers

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• Dealt ethically with customers, government and
  business partners

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• Maintained and updated their professional
  management culture, system and processes

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• ..and accomplished

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WINNING EMPLOYEES
GROWING INVESTORS
DELIGHTED CUSTOMERS
HAPPY SOCIETY
XCELLENCE
TRUSTED SUPPLIERS
SATISFIED GOVERNMENT AND REGULATORS
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National Excellence
Excellence in Corporate Governance leads to
National Excellence
Social Excellence
Corporate Excellence
Excellence in Corporate Governance
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• 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 .

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• This is our own age old mantra of
• Good Governance

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Thank You
Pavan Kumar Vijay Managing Director Corporate
Professionals India Pvt. Ltd.D 28, South Ext-
I,New Delhi 1100049Tel [phone], Fax
91.11.40622201Email info_at_indiacp.com Visit us
at www.corporateprofessionals.com