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Part - II

It's critical for any company that the people they recruit believe in the company's values and imbibe those values. This is an area where major stress should be laid. For example: the Indian business group -TATA lays lot of emphasis on its values-Integrity, Sincerity and transparency, while recruiting people in its group companies. The interview process should be used to judge if the candidates value systems match with those of the company. The candidates past record will also give some indication about him and can be used to judge the fit of the candidate. The personal value system should be of such strength that the candidate is immune to opportunistic actions.

Companies these days reward employees for meeting sales targets, achieving profits, presiding over takeovers. Somewhere down the line we have overlooked ethical conduct and transparency. Rewards for people with excellent conduct and ethical behavior should be there. Those who achieve excellent result but by using dubious mend should face negative consequences not rewards. This mayn't sound "Profitable" but the long term rewards of good corporate governance will be much higher There is also need for proper succession planning, especially for positions like that of the CEO. Candidate requirements should be clearly spelt out by the governing board and an assessment of internal candidates should be made. If none is found suitable, an external candidate should be looked into. In cases, where company may want new style of thinking and radical change, it could go in only for external candidates. The candidate selected should score high on EQ, Technical skills, Administrative and interpersonal skills. Also, a company must have at all times a contingency succession plan in case of unforeseen circumstances eg: death of CEO.

Good Business Sense?

Good corporate governance makes for good business sense. It increases the confidence of shareholders in your company. This leads to better stock prices. Research has shown that good corporate governance brings down the cost of capital for the company. Good disclosure practices lead to a more liquid market for the company. This lowers cost of debt for the company. Thus for CEOs of today, there is a clear business case for complying with principles of good corporate governance.

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* Contributed by: -
Harshdeep Jolly,
PGP - 2,
IIM Bangalore.