BUSINESS ETHICS AND

CORPORATE SOCIAL RESPONSIBILITY

ROAR GROUP

• VIKAS P. MISHRA 106• RAKESH S. AMIN 109• OMKAR A. SHINDE 108• AZHAR N. SHAIKH 107• ROGER Y. PETER 110• RAHUL N. TAKALE 105• UMESH S. DASONI 122

CORPORATE GOVERNANCE

• INTRODUCTION• DEFINITION• FEATURES• OBJECTIVES• MECHANISM• ROLE OF SEBI• IMPORTANT CONCEPTS• CASE STUDY• CONCLUSION

INTRODUCTION

• Corporate Governance is a relationship among stakeholders that is used to determine and control the strategic direction and performance of organizations.

• Concerned with identifying ways to ensure that strategic decisions are made effectively.

• Used in corporations to establish order between the firm’s owners and its top-level managers.

DEFINITION“Corporate Governance is about promoting corporate fairness, transparency and accountability.”

-James. D. Wolfensohn

“Corporate Governance is holding the balance between economic and social goals and between individual and community goals.”

-Sir Adrian Cadbury

“Corporate Governance is the system by which businesses are directed and controlled.”

-Cadbury Report (UK)

FEATURES • Interface between company and shareholder• Maximum welfare• Voluntary concepts• Managerial decision• Accountability• Transparency• Essence• Responsibilities and duties• Ethics, values and morals• Set of system

OBJECTIVES

• Economic efficiency• Employees participation• Code of conduct• Balance• Efficient use of resources• Setting standards• Standard of living• Accurate and reliable information• Transparency

MECHANISM

• The Companies Act• SEBI• Capital Market• Statutory Audit• Nominee on Company Boards• Code of Conduct

ROLE OF SEBI

• Issue of guidelines• Public interest advertisement• Dealings with complaints of investors• Investor education• Investor surveys• Disclosures by companies• Code regarding takeovers

IMPORTANT CONCEPTS

• Insider Trading - Insider trading refers to trading on price sensitive information by companies employees or individual closely connected with the firm.

• Whistle Blowing - It is an attempt by a member or ex-member of an organization to disclose wrong doing in or by the organization.

CASE STUDY

Do You Know Him ???

B. RAMALINGA RAJU

FOUNDER AND FORMER CHAIRMAN OF ONE OF THE BIGGEST I.T.

GIANT OF OUR NATION “SATYAM COMPUTERS”

THE PRIME CONVICT IN ONE OF THE BIGGEST SCAM OF COUNTRY

FOURTH LARGEST I.T. OUTSOURCING COMPANY OF INDIA

EMPLOYEES MORE THAN 50,000 PEOPLE IN INDIA

HIGH GLOBAL REPUTATION

OFFERS SERVICES TO MORE THAN 550 MNC’s

What was Scam all about… The company’s balance sheet was inflated to Rs. 5,361 Cr at the end of September 2008 against the actual Rs 5,040 Cr.

There is an artificial cash balance of Rs.588 Cr in September 2008.

Rs.1,230 Cr was arranged to Satyam, which is not reflected in its books, to keep Satyam's operations running.

Raju also admitted that Satyam's profits were inflated over several years.

HOW DID THE SCAM MATTER TO THE NATION ?

Job’s of over 50,000 technocrats were at risk.

Country’s booming economy feared slight collapse as Country's GDP fell by estimated 0.4%.

India’s I.T. sector suffered downturn as it’s image was tarnished globally.

How it was caught ?

Satyam Computers had on December 16, 2008, announced that it will acquire two group firms – Maytas properties and Maytas Infra for $1.6 billion (about Rs 8,000 cr) as part of its diversification strategy , this created a alleged violation of corporate governance laws.

SALVAGING SATYAMTo stabilize the sinking Satyam Computers, the Government nominated Banker Deepak Parekh, I.T. Expert Kiran Karnik and Former SEBI Member C. Achutan to the I.T. Company's Board.

KIRAN KARNIK C. ACHUTAN

ALL’s WELL THAT’s END WELL

Satyam Computers was took over by Mahindra Group I.T. Arm , Tech Mahindra on April 13, 2009.

ASIAN CASE STUDY

The World Bank has conducted a number of studies of

corporate governance practices in various countries all

over the world.

It has conducted Eight Studies of Asian Countries. This

part summarizes some of the components of those

studies.

Noticeably absent are China and Japan.

Chart shows the scores for each of the Eight Asian Countries

India

Mala

ysia

Korea

Pakist

an

Thailan

d

Phillipenes

Indonesia

Veitnam

0

10

20

30

40

50

60

70

80

90

Corporate Governance Scores

Corporate Governance Scores

No perfect score

India’s progress in Corporate Governance

Improvement with time

Clean up

REVIEW/ANALYSIS OF ASIAN CASE STUDY