Corporate governance cannot be mandated: Irani

Tata Sons Ltd Director Jamshed Irani has said that corporate
governance is a culture that cannot be mandated, but has to be built up
gradually with strong link between the board and the management of the company.

Delivering a lecture on ‘’Corporate governance through the
lens of an Indian corporate’’ here last night, Mr Irani said corporate
governance has become a major cause of concern following the Satyam scam. He
believes that frequency of financial reporting is not so important, but accuracy
and efficiency of the same is more crucial to ensure quality governance.

Asserting that with change in business environment ‘’we
should also change the way we look at the governance and also our mindset,’’ Mr
Irani said corporate governance and financial governance are two main parts of
the governance.

As far as corporate governance is concerned, he said,
provisions like clause 49 can make some difference, but if the Chief Executive
Officer or Chief Financial Officer is determined to do something wrong, no one
can stop him.

‘’But when it comes to punishment, certainty is more crucial
than its severity. Hopefully, the new law will also bring in transparency and
proper disclosure norms, which will ultimately lead to desired accountability in
the entire system,’’ he said.

[UNI, January 9 2010]