The corporate world cannot ignore social and political happenings in the larger society because the considerations that govern the rest of society will also govern corporates, Securities and Exchange Board of India (SEBI) chairman U.K. Sinha said Friday.
"The world has changed dramatically in the last five years. There is a strong upsurge towards democracy, accountability and transparency. The corporate world cannot ignore these social and political happenings in the larger society because the considerations that govern the rest of society, the same guiding principles will also govern corporates," he said at the Confederation of Indian Industry (CII)'s 9th International Corporate Governance Summit here.
He referred to the international corporate governance practices and underlined the importance to be in sync with the rest of the world and for corporates to go beyond how business is done in India and adopt international best practices in a globalised world.
"Adding to this is the US financial crisis where it was found that many corporations acted recklessly, took too much risk, went for short term gains, had lax monitoring and had policies not in the best interest of shareholders. These have led to shareholder impatience and the strengthening of regulatory actions against corporates," Sinha said.
He also talked about an emerging global trend where investors, especially institutional investors, are forming alliance with activists, which is taking up issues on a major scale.
Sinha urged companies to be extra conscious about compliance to the Companies Act. He informed that the new set of corporate governance guidelines for listed companies are being finalized and are expected to be announced shortly.
A joint CII-Deloitte publication titled 'Global Trends in Corporate Governance - since the financial crisisâ€™ was released by Sinha at the summit.