| Murthy: Man of the moment
Mumbai, Nov. 12: Infosys Technologies’ chairman and chief mentor N. R. Narayana Murthy will head the Securities and Exchange Board of India’s (Sebi) panel on corporate governance that will review the present code and suggest improvements.
The appointment is significant as the country’s apex market regulator is in the process of setting up a new code for corporate governance for Indian firms.
The move comes at a time when companies the world over are reeling from allegations of indulging in corrupt practices, especially misrepresenting account books, which has brought many a big name to its knees.
Sebi chairman G. N. Bajpai had earlier indicated that the market regulator would instil corporate governance practices that would be one step ahead of the rest of the world. The idea is to encourage companies to be rated by rating agencies. The ratings will serve as a guide for investors. While the ratings will not be made compulsory, Bajpai felt that corporates would be compelled by market demands to rate themselves, the same way any corporate rates its debt paper.
Narayana Murthy has spearheaded the movement for following good business practices, even seeking harsh penalties for errant CEOs to enforce corporate governance.
Incidentally, Infosys has hired global rating agency Standard & Poor’s to present its assessment on corporate governance practices. The report will be presented in the next 30 days.
The existing code drafted by the Kumar Mangalam Birla committee had suggested far-reaching changes in the Indian corporate world. Birla himself, however, earned brickbats for the way the Grasim-Reliance deal on Larsen & Toubro was closed—a deal now facing Sebi scrutiny.
Bajpai had earlier said in a seminar that in a family-run business, corporate governance should be preserved at the highest level.