The writer is the chairman of Brookings India and senior fellow, Brookings Institution.
Business case for governance
A balance can be found — between demands of shareholders and interests of society.
Good governance is a chant heard in every boardroom and management discussion. The phrase has not been precisely defined. It is varyingly interpreted but common to all interpretations is the understanding that it means transparent, fair and ethical corporate behaviour, the full and accurate disclosure of financial and operational information and the adherence to the letter and spirit of the law. People start arguing when the somewhat nebulous concept of “social responsibility” is added to the chant. It then falls upon corporate management to define this phrase and to find a pathway that balances the demands of the shareholders for maximum dividends and capital appreciation with the pressures to contribute to societal welfare. The search for this pathway is what has prompted this article.
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