'PSEs deserve more recognition, visibility'
Standing Conference of Public Enterprises (SCOPE) as an apex professional organisation representing central public sector enterprises (CPSEs) is promoting excellence in them. SCOPE focuses on corporate governance in CPSEs as a logical extension of its concerns for the development of CPSEs and their governance. Its director general UD Choubey spoke to the Hindustan Times on a range of issues. Excerpts:
Corporate governance is now recognised as a paradigm for improving competitiveness and enhancing efficiency in corporates. Tell us about SCOPE's efforts in improving corporate governance in CPSEs.
PSEs in India have many checks and balances and regulatory norms to conduct business within the Articles of Association and Memorandum of Understanding with the government. They are directly or indirectly responsible to the people of India as a custodian of public money for which they are accountable.
SCOPE sees a vital link between the corporate governance and empowerment of boards of directors of CPSEs. It has, therefore, been organising many programmes for improving corporate governance in CPSEs as well as taking up governance issues with the government and other statutory bodies. It has been organising conclaves and certification programmes, where world-renowned resource persons share experiences about best practices. SCOPE has also circulated a board-approved policy on corporate governance to all CPSEs so that they become a role model for corporate governance in India.
Do you think that only regulations are essential for best practices in corporate governance?
Regulations are essential but best practices in corporate governance require something more than codes and regulations, as they become frustrating and undermine the dynamic process and also inhibit the programmes. Flexibility combined with ethical consideration is probably the best way to have the desired results. In this regard, you may recall that even best regulations have witnessed worst frauds in the past. Therefore, ethics is equally important for imparting best corporate governance.
Government has issued guidelines on CSR for CPSEs while there are no mandatory guidelines for private corporates. What are your views?
PSEs in India have given utmost importance to CSR. They have made considerable contribution towards achieving the goal of inclusive growth. PSEs are of the strong view that business of doing business is not only business but something beyond business, which is upliftment of the civil society at large. In line with the recent government guidelines on CSR, they have earmarked 0.5% to 5% of the net profit for carrying out CSR programmes.
However, given the socio-economic conditions of India where large number of people still live below poverty line, it should be the prime concern for all corporates, whether public or private, to discharge their CSR as part of nation building. As a corporate citizen, entire industry fraternity has a responsibility towards citizens of the country. There should be level playing field for all corporates. Hence, contribution towards CSR should be made mandatory for all corporates - public and private.
SCOPE has been proactive towards image building of the public sector. What are your expectations from the government?
Public Sector Enterprises in India are contributing over Rs 1,66,000 crore by way of taxes and duties to government exchequer and contribute a net profit of almost Rs 1 lakh crore annually. On an investment of Rs 5.29 lakh crore, PSEs have contributed over Rs 7.02 lakh crore in the past five years. There is no denying the fact that the government has always recognised the services rendered by PSEs. But I would like to say that PSEs deserve better recognition and visibility during various programmes organised by the government.