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Adherence to ethics in business is a key governance issue

india Updated: Aug 29, 2011 00:10 IST

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Standing Conference of Public Enterprises (SCOPE), the apex organisation of public sector enterprises (PSEs) has taken many initiatives to enable public enterprises to be globally competitive. SCOPE chairman, Arup Roy Choudhury, who is also the chairman and managing director of NTPC Limited, spoke to Hindustan Times on a range of issues. Excerpts:

SCOPE has launched 'Ethics Forum'. What is the need for such a forum when PSEs are already adopting high standards of corporate governance in their functioning?

PSEs operate under a very elaborate system of accountability and answerability. The PSEs are variously accountable to the ministries, the Parliament, the Comptroller and Auditor General (CAG), the Central Vigilance Commission (CVC), the mechanism under the RTI and such other authorities and processes. Further, the listed PSEs are also governed by the Securities Exchange Board of India (SEBI) regulations concerning disclosure and governance. However, there is a need to further align the commercial priorities with imperatives of corporate governance. Realising that ensuring adherence to norms of ethics in running the business is one of the key governance issues. SCOPE has created an'Ethics Forum' to further strengthen the values, systems and practices in the working of PSEs.

What is the main objective of the forum and how is it going to benefit PSEs?

The main objective of the forum is to further strengthen the PSEs in adopting ethical practices in decision making. It will inculcate ethical advisory inputs to the public sector management from eminent persons with impeccable managerial experience who have been exemplary in their conduct in terms of management ethics. The forum will help in removing any doubt from the minds of public sector management as to where to draw a line between business interests and ethics.

Tell us about the functioning of the forum.

The PSEs will refer issues to SCOPE, which will forwarded them to the forum. There will then be a presentation by the CEO or the chief vigilance officer (CVO) of the concerned PSE. The forum will provide guidance and a road map to the PSE for taking the decision. The concerned PSE will also submit a copy of the recommendation to CVC under intimation to SCOPE. The final decision will be of the PSE. The forum will be an advisory body, which will deliberate only corporate matters and broad policy issues and not personal issues. It will provide advice within a definite time frame. A negative list of issues and subjects on which references cannot be made would be prepared. SCOPE will screen the cases before forwarding them to the forum. The chairman of SCOPE shall be the final authority in this regard.

Who are the members of the forum?

We have been fortunate to get some great professionals. Pratyush Sinha, former Central Vigilance Commissioner and E Sreedharan, managing director, Delhi Metro Rail Corporation are co-chairmen of the forum. Other members are Sudhir Kumar, former vigilance commissioner, Sujit Banerjee, former secretary, CVC, R Bandyopadhyay, former secretary, ministry of corporate affairs, KS Ramasubban, former secretary, CVC and RS Sharma, former CMD, ONGC.