Corporate Governance

Had thought about it long time back... little serious... ;)

Corporate Governance is a fancy term for the way in which Directors and Auditors handle their responsibilities towards Shareholders and other company Stakeholders. One can think of it as the system by which corporations are directed and controlled. Typical Corporate Governance measures include appointing Non-Executive Directors, placing constraints on management power and ownership concentration, as well as ensuring proper disclosure of financial information and executive compensation.

The concepts of Corporate Governance have been used successfully across corporations worldwide. One could think of a new form of Democracy wherein the aforementioned principles are put to practice. The investors can be thought of as the Citizens of the country in this context. The whole concept can be viewed as a ‘Democracy based on Business Models'. The representatives of the people will be MBA Graduates or Post Graduates in Management or Political Science. There would not be any ‘Political Party' concept; it would just a team working together. The Government in this case would be a panel similar to the Board of Members in any company. The Opposition again would constitute the people who have lost and would keep a strict vigilance on the rulers or rather more appropriately Managers. Five years is a very long time for rapid economic growth of any country. Similar to the Stock Exchanges there would be Populist Exchanges, wherein the popularity of one particular individual could be measured and when the index falls below a certain limit, the Manager would be replaced by someone from the opposition. This would enable the Managers to get active feedback from the citizens on their pol icies and governance. So there is no groupism involved. Neither fixed Ruling Managers nor fixed Opposition.

In this form of governance there is no chance of corruption as the performance levels of a particular individual determine whether he or she stays in power or not. In this performance-driven form of governance, we also have the best people in the business ruling a particular country. It would be an example of how educated people can make a difference in the development of a particular nation.

In a country like ours', where corruption and mismanagement are an integral part, this form of governance will surely help, although its practical implementation might be impossible. There are some key areas like Finance, Defense, and External Affairs, where this principle can be put to effective practice.

Comments, Brickbats, Enhancements, etc. on the above school of thought are welcome at

arun_nair@satyam.com
arunnairp@gmail.com