Corporate Governance: A Futuristic Model

The role of public sector undertakings, after India attained independence, as envisaged by political leaders and industrialists in a “mixed economy†was that of providing infrastructure facilities like power, telecom, roads, basic industries, etc. and thereby contribute towards the economic development of the country. The private sector, on the other hand, was to cater to the demand created by the rapid pace of industrialisation. However, liberalisation has led to the Indian economy integrating itself with the world economies, and corporates have to change their mind set. The compulsion for survival in such a scenario has led the Indian corporates to refocus their attention on Corporate Governance. In the case of public sector the issues of corporate governance relate to empowered internal governance, narrowing down multiple accountabilities and restructuring the system of checks and balances. It is in this context that the role and constitution of the Board assumes significance. Boards must be able to function independently and must comprise professionals who have a pragmatic approach. For effective corporate governance it is necessary to institutionalise ethics in the organisation culture.