SRI VIJAYARAM HIRE PURCHASE AND LEASING FINANCE LIMITED
CORPORATE GOVERNANCE POLICY FORMULATION
- INTEGRATION AS A SYSTEM FOR PRACTICE IN THE ORGANIZATION.
The concept of Corporate Governance though relatively a new subject to Indian Corporate, it is gaining importance and momentum, in view of globalization and integration of Indian Market with the World countries.
Corporate Governance in simple terms refers to the process that determines the rights and responsibilities of various people running the Company, be it public or private, Transparency in the activities and improving the shareholders value. This could be achieved only when Companies identify, assess and establish the core values, core capabilities and the core performance to achieve the corporate excellence. Thus the fundamental objective of corporate governance is the enhancement of shareholder value, keeping in view the interests of other stakeholders.
Corporate Governance has wide ramifications and extends beyond good performance and financial propriety.
Several short comings of Corporate Policies / Practices, such as inadequate transparency in dealings, unethical practices in price variations, unconcerned attitude towards socio-economic systems, indifferent attitude towards social causes have let down the investors’ confidence and shareholders faith in the Companies’ Management leading to chaos among investing public and rational behavior of the Stock Market. To alleviate all these elements it is essential to have better & transparent Corporate Governance principles. Taking up of new business avenues necessitates transparency in the activities for gaining investors’ confidence leading to better economic and commercial growth.
There are three important constituents of corporate governance, namely, shareholders, management and the Board of Directors of the Company.
In view of the global market concept gaining importance in every walk of commercial business, and the competition it has brought in, it is essential that the companies are more competitive, to produce the best goods and to have superior and transparent policies to sustain their business. Measurable corporate governance helps the companies to understand and implement better policies to attract better business abroad. There is no second place for quality in business. Better corporate governance helps the companies to achieve it.
RECENT SPEECH OF RBI GOVERNOR:
During Mid October, RBI Governor, Dr. BIMAL JALAN, in his speech emphasized the need for greater corporate governance on the part of deposit taking non-banking finance companies.
In pursuant to the views expressed by the esteemed Governor, it has been thought fit by our organization to firstly formulate suitable CORPORATE GOVERNANCE policy and incorporate the same as a working philosophy and have it integrated as system of functioning over a period of time.
Accordingly the following points are presented for the kind consideration of the members of the board for adopting with or without modification as deemed fit.
· The three points that stem from the RBI Governor’s speech, as the focus of Corporate Governance for NBFC corporate are as under:
1. Clear Division of responsibility.
2. Checks and Balances.
3. Disclosure and transparency.
HOW INTEGRATED & PRACTICED IN OUR ORGANIZATION?
1. The organizational role responsibilities have been well demarcated and divided between various levels ranging right from the top CMD, JMD & Director (Administration) to the lowest level of the filed worker. They are sought to be clearly administered by reporting, monitoring, reviewing and control through periodical meetings as stipulated, which are followed through work calendar. The manual of instruction stipulates the manner of doing work; should the worker need be clarified, it can be referred to or consulted with higher ups.
2. Checks and balances are two-fold: Internally supervision, authorization, and daily, weekly, monthly reviews by the in-charges, directors and the CMD. Externally there are concurrent auditors, who are not attached to the employee role but are professionally independent. Also for the past 2 and half years, an ex-banker and ex-advisor to a foreign central bank, has been enlisted for professional advises for system up keep, procedural up gradation and also training the staff including the highly qualified directors. Moreover, in the recent past a Committee consisting of CMD, Director –Administration, and JMD has been set up under the name and style of Result Oriented Committee (ROE), which meets approximately every thirty days to review, gear up, and monitor the efforts of the organization towards RESULTS, thus enhancing the checks and balances.
3. Transparency and disclosure norms are adhered to as stipulated statutorily and in addition, the organization has been very open towards public communication. Information sought is speedily and clearly produced, when a member entitled to know the information seeks for the same.
All these measures are clarified and re-clarified in meetings with the staff members too, which take place 8 to 9 times in a year.
Finer aspects and greater measures and refinements are introduced (and incorporated in the organizational system), as and when time advances and newer aspects like these emerge from the policy-making authorities.