Impact on profession and preparation for tomorrow

transcript

Impact on Profession and Preparation for Tomorrow

A Rethinking Exercise onRole of the Professionals in

Global Environment

Pavan Kumar Vijay, Past President ICSI

Time has come for fundamental Rethinking

Why Rethinking?

Global Future

Common Business Law and Procedures

Standards Corporate Governance Practices and Disclosure Standards

International Secretarial Standards

Harmonisation of Services rendered by Company Secretaries

Easy Compliance and Impossible Non-compliance

International Networking and development of Multinational Company Secretarial Firms

Emerging Need of Company Secretaries

Need for Good Corporate Governance

Adherence to Law and National Policies

Advisory to Board on their statutory role, duties and accountability

Advisory to top management on Legal and Strategic Matters

Conscience Keeper of Corporates

Global CS - Common Issues

Ignored Identity in UN CPC (Central Product Classification)/ WTO Classification

Negligible Cooperation between Company Secretaries Institutes Worldover

Different Legal Status of Company Secretaries Across Countries

Different Qualification Standards

Diverse Corporate Governance Practices

Need for Rethinking

• Professions are also exposed to variety of RISK FACTORS– Internal Risk– Technological Risk– Legislative Risk– Competitive Risk

• Professionals need to change with Changing Paradigm

• Increasing expectations of Society from Professionals

• Professionals need to grow on a Sustainable Basis

RISK FACTORS

Internal Risk Factors

• Focus on Legal Recognition - Consistent focus on legal recognition even when professionals have wider knowledge to perform variety of roles

• Limited Focus on Professional Development – After becoming professionals members do not attends programmes to update their skills and knowledge

• Research and Development – Professionals are so busy with routine activities that they forget importance of proactive research and development

• Reactive Strategy – Traditional Professionals act very late, whereas MBAs and MCAs change with time and technology

Internal Risk Factors

• Poor Communication Strategy – Capabilities of professionals are not highlighted properly at various forums

• Poor Employability – Lack of effective training and awareness in the industry

• Lack of Entrepreneurial Skills – Members still prefer less paying secured jobs than starting practice

• Lack of Self Confidence – “our members lack confidence”, “we can’t do it better than advanced countries”, “big 4 are threat”, “we cannot match anybody”, etc

Technological Risk Factors

• Technology does not come with a warning (A decade old NSE accounts for 86% Turnover)

• ERP and Financial Accounting Software have already taken most of the accounting jobs

• E-Commerce is wiping off Middle Management from the organisational hierarchy

• Financial decisions and legal compliances are becoming automatic

• Financial and Secretarial Software and Websites make it so easy that one professional can handle any number of companies

Legislative Risk Factors

• DCA Vision Statement – Towards simplified corporate laws facilitating growth of corporate sector

• Dilution of much awaited Companies Bill 2003

• All expert reports suggest further liberalisation and simplification of law

• Naresh Chandra II Committee recommends concessions to small companies and says that the company law was made in days of License Raj and now it must change for enhancing competitiveness of India

• We still find English Case Laws for Non-Compliance of Law

Competitive Risk Factors

• Global competitor need no explanation

• Reducing distinction between services provided by professionals – CS, CA, CWA, LLB all are now recognised for issuing

various certificates and representing in all Tribunals

• SEBI, BSE, NSE, and other organisations have started their own Learning Institutes

• Private Institutions are getting recognition from Government, Regulators and Industry

• Private Institutions are becoming Deemed Universities, thus adding to competition

Similarity of Services by Professionals

Difference: Exclusive Qualification Required by Law

AdvocatesChartered

Accountants

Cost and Works Accountants

Company Secretaries

Appearance in Courts

Financial Audit

Cost Audit Secretarial Compliance Audit

• Legal Advisory

• Management Consulting

• Due Diligence

• IT and BPO

• HR Consulting

• Representation & Negotiations

90% of Services are SIMILAR

All this is something happened over the years

Something more is happening

Changing Paradigm

WEALTHSHARING

Voluntary Adherence to Good CORPOARATE GOVERNANCE

WEALTHMANAGEMENT

WEALTHCREATION

GLOBALISATION OF TRADE AND COMMERCE

TECHNOLOGICAL

ADVANCEMENTS

PUBLIC PRIVATE PARTNERSHIP

These are bringing opportunities

… and also big challenges

… that may question the existence of professionals

providing traditional services

”Corporate Governance is the

application of best management practices,

compliance of law in true 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”

Corporate Governance for ICSI

Need of regulatory controls and policing may not arise in the era of Self-Governance and

Corporate Social Responsibility

Globalisation

• Vasudev Kutumbakam becoming a reality

• Free and Fair Trade and Vanishing Economic Boundaries

• UN, WTO, WB, IMF, OECD, ADB and ICC are standardising rules for International Trade

• UN EDIFACT Standard for E-commerce is standardising information relating to Financial, Administration, Commercial and Transportation information

• Internet and Global ERP Vendors (SAP, Oracle, Baan, PeopleSoft, etc) are spreading Global Best Practices in Business

• All these moving towards Single Law for Trade and Commerce

Globalisation is a big THREAT for Pessimist

Professionals

Threat Threat

Today or tomorrow we will have to face Global

Competition

Technological Advancements

• Information, Communication and Transportation Technologies are redefining how business is done

• E-Governance (DCA21, EDIFAR, etc.) – Compliance on Click of Mouse

• Capital Market and Banking Integration – Straight Through Processing

• Artificial Intelligence (Expert Systems) – Automatic Decisions

• Enterprise Resource Planning (ERP) and E-Commerce – From Entry to Balance Sheet everything is automatic

• Computer Aided Design/ Manufacturing (CAD/ CAM) – quick new product decisions

In years to come computers will do most of our traditional work

Public-Private Partnership

• Partnership in National Development Projects

- National Highway Projects

- E-Governance & DCA21

- Township Development

- Development of SEZ, EPZ, STP, etc

• Mutual Trust between Government and Industry

• Example: Liberalization and Privatization Policy

• Enhancing Role of Voluntary Sector

Further relaxations in regulatory controls mean

reduction in work for traditional professionals

Some people may even Question

Will there be need of secretarial compliance audit, financial audit or cost audit in

the era of self-governance, free economies, e-governance and

so many relaxations?

Time has come to rethink what traditional professionals will do

in future

Rethinking Need for Various Professions

• There will always be need for giving people an opportunity of being heard

AdvocatesChartered

Accountants

Cost and Works Accountants

Company Secretaries

Three Professional BodiesNeed Fundamental Rethinking

Opportunities are there but need to be explored

Opportunities for Professionals

• Focus on Areas where Computers cannot enter

• Venturing into Unexplored Areas

• Diversification into New Segments

• Fulfilling Expectations of the Society

– Professionalism in National Development Projects

• Entrepreneurship

– Professionals know how to do business better than anyone

Areas where Technology Cannot Enter• Entrepreneurship

• Innovation/ Idea Generation

• Complex Decision Making

• Contingency Planning

• Crisis Management

• Human Resource Understanding and Development

• Relationship Building

Exploring Opportunities in Various Management

Functions

We Already Deal with All Departments

MARKETING

R&D AND PRODUCTION

CORPORATE COMMUNICATION

STRATEGY

INFORMATION TECHNOLOGY

FINANCIAL

SECRETARIALAND LEGAL

There is need to learn little bit about these Management Functions

Professionals must diversify into New Segments

IPR & GENERAL BUSINESS LAWS

STRATEGIC MANAGEMENT

CORPORATE AND SECURITIES LAWS

FINANCE, ACCOUNTs AND TAXATION

IT AND CYBER LAWS

HRD AND INDUSTRIAL LAWS

ENVIRONMENTLAWS

INTERNATIONAL TRADE LAW

Different Knowledge Areas

ADVISORY DOCUMENTATION REPRESENTATION

DUE DILIGENCE CERTIFICATION

COMPLIANCESCORPORATE

GOVERNANCESECURITITIESMANAGEMENT

Different Services

PUBLIC SECTORUNDERTAKINGS

PRIVATE LIMITEDCOMPANIES

TRUSTS AND NGOS

COOP SOCIETIES AND PRODUCER COMPANIES

MUNICIPAL BOARDS

Different Corporate Structures

SEMI-GOVERNMENTORGANISATION

UNLISTED PUBLICCOMPANIES

LISTED PUBLICCOMPANIES

SocietyExpects

Professionalism Here

Different Industry Segment

MEDIA AND ENTERTAINMENT

INFRASTRUCTURE, POWER AND TELECOM

IT SOLUTIONS

IT ENABLED SERVICES AND BPO

TEXTILES

TOURISM AND HOTELCAPITAL MARKET AND ITS INTERMEDIARIES

HOUSING AND CONSTRUCTION

AGRICULTURE ANDFOOD PROCESSING

CAPITAL GOODS

DRUGS, PHARMA AND HEALTHCARE

BANKING AND NBFCS

FINANCIAL SERVICES

These are also open to professional entrepreneurs who wish to do business on

ethical principles

SMALLSCALE

MEDIUM

Different Scales

INDIANOPERATIONS

INDIANSUBSIDIARIES ABROAD

Different Geographies of Operations

Is it possible?

All you need is:

• Understand Industry Needs

• Gain ‘Substantial Knowledge of Management’ – Learning little more than what is included in the CS or CA Courses

• Provide PQRS – Productivity, Quality, Reliability and Service

• Use 3Cs - Creativity, Confidence and Communication

• Conduct Periodical SWOT Analysis of Self

• Use Technology to Beat Technology

Providing PQRS

• Productivity – Management want you to use resources in most profitable manner

• Quality – There is no compromise on quality

• Reliability – Companies require trust in abilities and loyalty to company all the time

• Service – Value Added Services with courtesy and smile is absolute necessity

Using 3Cs

• Creativity – Innovation is the critical success factor

• Confidence – Believe in Yourself (Yes, You Can Do It)

• Communication – It is how you make people know about your creativity and confidence. It is Communication that creates opportunities.

Periodical SWOT Analysis

• Strengths: What are my strengths?

• Weaknesses: What are my weaknesses?

• Opportunities: What are new opportunities?

• Threats: What are new threats?

So that you can CHANGE with the TIME

Use Technology to Beat Technology

• Internet and E-commerce

• Enterprise Resource Planning (ERP)

• ERP for Professional Firms

• Customer Relationship Management Tools for Practising Firms

• Data Warehousing and Data Mining

• Computer Based Complex Business Analysis Models

There are many more...

COOPERATE INSTEAD OF COMPETE

Global Success Call for Synergy of

Brand Knowled

Infrastructure

Capital

Let Collaboration be Buzz Word for Us

Quality of

Service

CorporateLaws

EconomicLaws

TaxationLaws

WTO & IPR

InternationalTrade Law

IT & BPOManagementConsulting

Finance and Accounting

Commerce

BrandSynergy

InfrastructureSynergy

CapitalSynergy

Collaborative Commerce

SingleWindowInterface

KnowledgeSynergy

GlobalPresence

Growing Revenues

Growing Customers

Growing Nations

OPTIMISM COMES FROM COOPERATION

For Optimists Globalisation means Opportunities in 145 Member

Countries of WTO

OpportunitiesOpportunities

portunities

Global Threats To Global Opportunities

It’s a matter of Perception and Positive Thinking