As the lack of corporate governance standards becomes apparent even for leading Indian business houses, the industry and government are keen to evolve definite norms to ensure transparency, discipline and compliance by Indian firms. But loopholes remain, as a consensus fails to evolve.This was evident at the Institute of Company Secretaries of India (ICSI) corporate governance awards function on Wednesday. ICSI gave away the awards for the best governed private companies to Hero Honda and Wipro. A 25-member jury judged Tamil Nadu Newsprint and Papers Ltd the best governed public firm and gave a lifetime achievement award to Mahindra and Mahindra. ISCI secretary N.K. Jain said, ‘‘The awards for corporate governance are our way of institutionalising better norms for running companies.’’Industry suspects a revised Companies Act will be out of sync with Indian business conditions. But several industry associations and experts think the Companies Act, 1956 needs large-scale amendments before it meets international standards and adequately safeguards minority shareholders’ interests.‘‘Indian companies need to be seen as transparent, more efficient and ethical. But we should also make our laws realistic rather than restrictive which they often become,’’ Hero Honda Motors CMD Pawan Kant Munjal said.Prof Manubhai Shah, trustee of the Consumer Education and Research Centre, however, said corporate governance was incorrectly assumed to be Corporate Social Responsibility. ‘‘Corporate governance is a focussed subject, dealing with the protection of minority shareholders,’’ he said. Shah made the case for amending Section 265 of the Companies Act, to enforce proportional representation of shareholders. Ex-Cabinet Secretary Naresh Chandra said, “In the cooperative sector, independent directors without any conflict of interests have not resulted in terrific management of cooperative banks.’’ He added, ‘‘Norms are tightened for all existing companies, simply because the regulator is unable to take action against a known culprit against whom substantial proof is available.”
