Indigenizing Corporate Governance
Designation : - Doctoral Researcher in Corporate Governance
Organization : - Banasthali Vidyapith (Raj.)
Other Writers : - Prof. Harsh Purohit - Dean Faculty of Management and Faculty of Law, NCCG, SBI School of Commerce and Banking, Banasthali Vidyapith (Raj.)
So, what could be our approach?
Implication for corporate governance
Next comes - How to improve corporate governance?
1. Addressing feminine drain : With the inclusion of women representation in the board, we have tried a good balance of masculine and feminine traits in the boardroom. But, the critical question is - to what extent we have been successful in bringing feminine traits to the board? Do the women, who have entered board posses feminine traits or are they themselves masculine? This also reflects the need to adhere with the CG norms in the spirit and not just tick boxes of compliances. Thus, we posit that instead of focusing on biological gender equality we need psychological gender equality. Prof. Subhash Sharma suggested that the touch of feminity is essential for creativity and good governance.2
3. Indigenous definitions and parameters - The frameworks of corporate governance researched and developed in western context are based on western culture. This affects the companies adversely, as instead of contextualizing the business to needs of that society, the businesses are forced to comply with norms developed in and for western societies.5 For example, a Bharatiya corporate person will be able to resonate more with the concept of Dharm-Arth-Kaam-Moksh towards holistic development rather than integrated reporting, which would be alien to him/her.6 Also, the family owned and controlled businesses are dominant form of organizations all over the world so it is natural that their approach is significantly shaped by the traditional culture. For example, every three out of four family businesses in India go out of way to help and retain employees in adverse conditions and also support community initiatives7 and this was even before CSR became mandatory in india. Shri Sandeep Singh, Founder of SWASTIK, categorically mentioned that there are many such cases like Birla Group, Tata Trusts, and even people from ancient India contributed to the social causes without any rules and regulations.8
If well researched models are developed, it will increase the effectiveness of the businesses and corporate governance, resulting in ultimate objective of social development. The authors do not propose to discard the existing frameworks and models of corporate governance, but highlight the need for better adaptation to needs of each culture.