Boardroom in the 21st Century: Issues & Challenges

Abstract

Quantum advances in science and technology (telecommunication, information technology, biotechnology) have radically altered the methods of doing things and have opened limitless possibilities. Among the economic-business models, free-market capitalism has decimated all other models. Capitalism is value neutral. However, the way business is to be run does have value-implications, relative to the environment of the business. ‘Corporate wars’ cannot be allowed the ‘all is fair’ philosphy.

The need for ‘regulation’ in general governance and politics has been extended to the corporate world too in order to curb adventurism and to promote transparency and accountability The Cadbury Code, the Greenbury Code, the Hampel Committee have gone into the details of Corporate Governance in the UK. The Nolan Committee (later the Neill Committee) dealt with ‘Standards in Public Life’ and the basic principles laid down by the Committee ought to form the basis of Corporate Governance too.

In India also, CII's Committee, Rahul Bajaj Committee and Vittal Committee have addressed the issue of Corporate Governance.

The unique Indian context for business (both public and private) should be kept in mind while dealing with the issue of Corporate Governance. Corporate Governance requires a change of mindset and culture. These fundamentals are of enduring relevance and will be relevant for the 21st Century Boards.

Twenty-first century will witness dramatic changes in the locational, communicational, decisional, financial aspects of running an enterprise in the changed global-regional-national scenarios. ‘Vision-led’ Corporates and Visionary Boards will be more effective. Culture-balance and culture-sensitivity will be important areas for the Boards operating in global/multicultural context. Corporate ethos and governance will gain increasing ascendancy in an integrated business world. The Boards' performance will be under evaluation by investors and adherence to the principles of governance will be among the evaluation parameters. Entrepreneurial enthusiasm and sustainable systems/values will have to be balanced. Good governance will achieve this blend. The Indian ethos contains the essence of Corporate Governance and this remains our most potent tool.