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NURTURING & DEVELOPING THE EMERGING AREAS OF PRACTICE
Corporate Governance & Corporate Compliance Management
PAVAN KUMAR VIJAY, MANAGING DIRECTOR
“In this fast changing world…
opportunities are unlimited …,
and future belongs to those …
who grasp these opportunities before they become a
necessity.”
Emerging Scenario
Emerging Scenario
Simplified Law
e- Governance
Globalization
Single window Interface
Common Law
Globalization
What is Globalization
IntegrationInteraction
LawsCompaniesBusinessPeople
Thus, it is a process driven by international trade and investment and aided by information technology
Impact of Globalization
In WTO regime, Globalization will lead to
Commonality of Law
And
Common Law will lead to
Global Competition
Globalized Scenario
International Corporate Governance
International Common Regulatory Framework
Global Outsourcing of services
Global work culture
Quality of Competition
Globalization Challenges
Quality of Service
Time Commitment
International Operational Infrastructure
Qualitative competition among professionals
Adherence to International standards
e- Governance
What is e-governance?
For increasing Efficiency
For Simplification
of Laws
Use of Information Technology
Service Delivery
Uniformity & Transparency
Impact of e- Governance
Simplified Laws
IT Drive
n Services
Simplified Laws
IT Driven Services Shift of Focus
Procedural Compliances
Strategical Planning
e-governance & IT Scenario
Seamless Integration of National & International Business
From anywhere – Small village to big cities
At anytime – Early morning to midnight.
In any manner – Internet, Mobile, PDA, etc
24 X 7 Online Services
Real-time Due Diligence, Rating and Compliances
Global Data Banks
IT Driven regulatory procedures
Minimization of procedural steps
Minimization of Non-compliances
IT Driven compliance services
Strategic Role of all professionals
Global services
Impact of e-governance
Single –window Interface
Single window interface
implies
Complete services under one umbrella
In the emerging scenario of ..
Globalization,
Common Law,
e-governance,
Simplification of Laws &
Single Window interface
…
“Opportunities are unlimited …”
“And
Success will come only when preparation meets
opportunity…”
Preparations for success in Emerging Scenario…
Emerging Opportunities
Corporate Governance
Corporate Compliance
Management
“Not only opportunity
but
Corporate Governance
&
Corporate Compliance
Management
are demands of Emerging
Scenario…”
Corporate Governance (CG)
An Emerging opportunity in
Emerging Scenario
Corporate Governance
“CORPORATE GOVERNANCE
is creation of a culture of
consciousness, transparency and openness.
It refers to combination of laws, rules, regulations,
procedures and voluntary practices to enable the companies
to maximize the long-term shareholders value, customer
satisfaction and wealth.”
Corporate Governance Framework
Output – Input = Wealth Created ?
Sustainability
Happiness andProsperity of all
Stakeholders
Reinvestment
Distribu- tion
Research and Development HR Development Infrastructure Risk Management
SUPPLIERS Adequate Returns
HUMAN ASSETS Adequate Remuneration
CUSTOMERS Affordable Prices
PUBLIC Payment of Taxes and Partnership in National Development Projects
Wealth Creation Wealth Management Wealth Sharing
EnhancedCapabilities
Best Management Practices are Vital Here Law and Ethics are Vital Here
Stakeholders in Value Chain
SUPPLIERS CUSTOMERSHUMAN RESOURCE
Supply Funds, Materials and Services
Value Addition and Management of Resources
Give Opportunity to Co. to Satisfy their Needs
Adequate Returns for Funds, Material and Services Supplied
Adequate Salary and Security for leading a Happy Life
Best Quality Products and Customer Care at Minimum Prices
ROLE OF STAKEHOLDERS
EXPECTATIONS OF STAKEHOLDERS
Potential Suppliers, Human Resources and Customers
Biological, Economic and Cultural EnvironmentPUBLIC
PUBLIC EXPECTS PARTNERHIP FOR SUSTAINABLE DEVELOPMENT
Significance of CG
The significance of Corporate Governance lies in the fact
that its absence can undermine economic and financial
stability…
Significance of CG
Transparency in operations
Consciousness to adopt best
practices
Confidence of domestic &
international investors
Easier Access to capital (FII, VCF, Foreign Markets)
Entry of Best Talent
& Skill
International Tie-ups
Widened opportunities of
services
In nutshell…
GLOBAL GROWTH
Creation of Brand Image
Higher Valuation
Who shall take responsibility
A person who possesses the knowledge of
Law + Management
Information Technology
Marketing
Production And operations
Human Resources
Corporate Communication
Finance andAccounts
Legal
CorporatePlanning
Law + Management
Knowledge of …
But who possesses knowledge of
Law + Management
Company Secretar
y
Corporate Laws
Commercial Laws
Taxation Laws
Accounting Laws
Securities Laws
Corporate Restructuring & Insolvency Laws
Economic & Labour Laws
Financial, Treasury & Forex Management
Strategic Management, Alliances & International Trade
Governance, Business Ethics & Sustainability
Due Diligence & Corporate Compliance management
Law + Management
Thus, a Company Secretary is the person who is responsible
to ensure
Corporate Governance.
Role of ICSI
to create
Brand Affiliation of CS
With Corporate Governance
Implementation Strategies
Change mind set of Yourself and Promoters
Show Success story of Good Governance of other companies….
Show the VALUE CREATION
Create transparency in your dealing
Follow good governed Board practices
Compliance of Law in LETTER AND SPIRIT
Role of ICSI
ICSI has taken the responsibility to develop the concept of
Corporate Governance.
“ 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.”
-The Institute of Companies Secretaries of India
ICSI efforts for CG
Vision & Mission
Vision- “To be global leader in development of
professionals specializing in corporate governance"
Mission- "To continuously develop high caliber
professionals ensuring good corporate governance and
effective management and carry out proactive research
and development activities, for protection of interest of
all stakeholders, thus contributing to public good“
ICSI efforts for CG
Award for Corporate Governance
Post – Membership course in Corporate Governance
Revision of course curriculum.
Increasing number of programmes & Seminars
Representations before International Regulatory
Authorities for recognition of CS as a Professional for
ensuring Corporate Governance
Future Endeavors
Secretarial Standards on Corporate Governance
Guidance note on Corporate Governance Practices
Branding of CS ascertained with Corporate Governance
Industry & Corporate Tie-ups
Corporate Governance is not about just doing the compliances.
CG is about Managing the Compliances.
“Managing Compliances is different from Just doing
compliances”
Corporate Compliance Management (CCM)
Another Emerging opportunity in
Emerging Scenario
Corporate Compliance Management
is nothing but the
Opportunity
Lying in
‘Compliance of All applicable laws’
Corporate Compliance Management
Present Status of Compliance Services
• Company LawHigh
• Listing Agreement & Securities LawsMedium
• All other LawsLow
Implementation of Compliance Services withCorporate Compliance Management
Step II : Identification
Step III : Evaluation
Step IV : Assessment
The Five step process …
Step V : Compliance Structure
Step I : Understanding the Company
Step I : Understanding The Company
- Company’s History & Background
- Capital Structure & Evolution
- Promoters & Group Companies
- Management & Administration buildup
- Financial Soundness & Debt Structure
- Risk Management & Protection - Licenses & Approvals
Step II : Identification Process
General application of laws
Sectoral applications
Industry / Segment applications
Geographical applications
Number of Employees
Transaction applications
Corporate Laws
Taxation Laws
Industrial & Labor Laws
Securities Laws
General application of Laws
Sectoral application of Laws
Sector
Public Private
Service
Manufacturing
Trading
Industry/ Segment wise application of Laws
Media And Entertainment
Infrastructure, Power And Telecom
IT Solutions
IT Enabled Services And BPO
Textiles
Tourism And HotelCapital Market And Its Intermediaries
Engineering and Construction
FMCG
Agriculture AndFood Processing
Capital Goods
Drugs, Pharma And Healthcare
Banking And NBFC
Financial Services
Global Operations
Geographical application of Laws
Indian Operations
Step III – Evaluation of Compliance Timings
Compliance Timings
One Time Fixed/Regular Event based
Identify the gap between the
present compliance system and
the results of evaluation process
Step IV - Assessment
Establishing Controls &
Standard
Delegation of Responsibility
Analysis & Assessment
Compliance Reporting
Step V : Creation Of Compliance Structure
Compliance Management Tools
Checklists
Due Diligence
Softwares
Data banks
Research & Updations
Case Study
CCM in Corporates
Explaining the Process
CEMENT INDUSTRY
• Public Limited Company• Listed Company – BSE, NSE• Manufacturing & Trading• Exporting Company• 10,000 No. of Employees (Approx.)• Units Located at Bhubaneswar, Rajnagpur
Understanding The Company
Identification of Applicable Laws
Explaining the Process
On the basis of General Corporate Information – Public Company, Listed at BSE, NSE
• Companies Act, 1956• Income Tax Act, 1961• SEBI (Insider Trading) Regulations, 1992• SEBI (Substantial Acquisition of Shares & Takeovers)
Regulations, 1997• Listing Agreement
Identification of Applicable Laws
Explaining the Process
On the basis of Sector – Manufacturing and Trading
• National Environment Policy
• Environment (Prevention of pollution control) Act, 1986
• Central Excise Act
Identification of Applicable Laws
Explaining the Process
On the basis of Type of Industry – Cement
• Cement (Quality Control) Order, 2003
• Limestone and Dolomite Mines Labour Welfare Fund Act, 1972
• Mines and Minerals (Development and Regulation) Act, 1957
• Mineral Conservation and Development Rules, 1988
• Metalliferous Mine Regulations, 1961.
• Explosives Act, 1884
Identification of Applicable Laws
Explaining the Process
On the basis of No. of Employees
• Employees’ Provident Funds & Miscellaneous Provisions Act, 1952
• Factories Act, 1948
• Payment of Gratuity Act, 1972
• Industrial Dispute Act, 1947
• Employees State Insurance Act, 1948
• Payment of Wages Act, 1936
• Minimum Wages Act, 1948 & Minimum Wages (Central) Rules, 1950
Identification of Applicable Laws
Explaining the Process
On the basis of Activities – Exporters, Deals in foreign Exchange
• FEMA, 1999
• Foreign Trade Policy
• Customs Act
Identification of Applicable Laws
Explaining the Process
On the basis of location
• Shops and Commercial Establishments Act
• Value Added Tax
• Labour Laws
Role of ICSI
To initiate more Programmes and Workshops
To increase the Horizon of Institute
To increase the strength of Members
Focus on other Laws
Get a good brand – CORPORATE COMPLIANCE MANAGEMENT
Thus, Opportunities are Unlimited …
Its just a matter of Creativity, Confidence and
Communication …
…and also Perception and Positive Thinking
So now, we need to prepare ourselves to create niche in the emerging scenario …
Globalization Brings Opportunities
Threat
Th
reat
Th
reat
Threat
Globalization - Pessimist Perception
Threat of Invasion of Service Sector by Foreign Giants
Opportunity
Opportu
nity
Opport
unit
y
Opportunity
Globalization - Optimist Perception
But merely optimism will not do
optimism with Confidence & Right Attitude will …
The emerging scenario requires us to reinvent everything -
to think of ourselves as compared to others …
“Adopt technology to defeat technology”
is the latest survival mantra ….
Go IT …
Go IT …
Reduce time consumption in repetitive tasks.
Devote more time on Strategic analysis, value additions
and planning.
Use on-line regulatory services.
Make use of exhaustive databases, checklists, research
papers available online.
Manage multiple tasks through IT.
Use IT to shorten procedure and shift to STRATEGIES and
PLANNING.
To become
A Strategic Manager
&
A Corporate Planner
Learn
The 80:20 Theory
80%
20%
Filing forms & Applications
Registers & Returns
Checklists
Strategy
Management
Research
Focus on Procedural Complianc
es
Present Focus of Services
Focus of services in emerging Scenario
20%
80%
Focus on Strategical Planning
Filing forms & Applications
Registers & Returns
Checklists
Strategy
Management
Research
See the Horizon Beyond Company Law
Its time to go beyond the pre-defined framework.
Always say ‘YES’, its my area of work
“Jumping at several small opportunities may get us there
more quickly than waiting for one big one to come along.”
Move with a Direction
Services Provided by an Ordinary PCS
No Directi
on
Move with a new Direction
Piecemeal services
Single Window interface call for Synergy of
Brand
Knowledge
Capital
Infrastructure
Collaboration is the buzz word …
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
CS + CA + CWA + MBA
+ LLB
“Problems becomes opportunities,
when right people come together …”
Enhanced Capability to compete with Global giants
Global Reach
Brand leverage
Wider Area of Expertise
Risk Minimization
Active Networking and Public Relations
Attraction of best talent
Advantages Collaborative Commerce
"We do not have to become heroes overnight…
Just a step at a time, meeting each thing that comes up, seeing it
is not as dreadful as it appeared, discovering we have the
strength to stare it down."
Quality Brand Building
Knowledge Quality Image
Opportunities have knocked your door …
But still …
You have to get off from your seat and open the door….”
… and if Opportunity does not knock your door….”
build the door….”
Thank You …
PAVAN KUMAR VIJAY, MANAGING DIRECTOR