Public Enterprise:

Accountability and UNIT 9 CORPORATE GOVERNANCE AND

Governance
CORPORATE SOCIAL
RESPONSIBILITY
Objectives

After reading the unit you should be able to:

• Understand the meaning & scope of Corporate Governance, Social Responsibility

& Scope of Social Audit of PEs;
• Appreciate the need and importance of Corporate Governance of Social
Responsibility in the changes Scenario; and
• Discuss the Social Responsibility in PEs.

Structure
9.1 Corporate Governance: Concept
9.2 Committee Recommendations on Corporate Governance
9.3 Coporate Governance in Public Enterprises
9.4 Social Responsibility Strategies
9.5 Social Audit- Introduction
9.6 What is Social Audit
9.7 Social Audit in India
9.8 Benefits of Social Audit
9.9 Summary
9.10 Self Assessment Questions
9.11 References
9.12 Further Readings

9.1 CORPORATE GOVERNANCE : CONCEPT

“A code of corporate governance cannot be imported from outside, it has to be

developed based on the country’s experience. There cannot be any compulsion on the
corporate sector to follow a particular code. An equilibrium should be struck so that
corporate governance is not achieved at the cost of the growth of the corporate
sector.” —Sir Adian Cadbury

What is Corporate Governance?

Corporate Governance has succeeded in attracting a good deal of public interest

because of its importance for the economic health of corporation and the welfare of
society, in general. However, the concept of corporate governance is defined in
several ways because it potentially covers the entire gamut of activities having direct
or indirect influence on the financial health of the corporate entities. As a result,
different people have come up with different definition, which basically reflect their
special interests in the field. The best way to define the concept is perhaps to list a
few of the different definitions rather than mentioning just one or two.

36
Definitions Corporate Governance
and Corporate Social
Responsibility
Adolf Berle has defined social responsibility as “the manager’s responsiveness to
public consensus” (www.bharatpetroleum.com).

Koontz and O’Donnell have given the definition of social responsibility thus: “The
personal obligation of the people as they act in their own interests to assure that the
rights and legitimate interests of others are not infringed”
(Hindu business line, 1998).

Corporate Governance can be defined as a systematic process by which companies

are directed and controlled to enhance their wealth generating capacity. Since large
corporations employ vast quantum of societal resources, we believe that the
governance process should ensure that these companies are managed in a manner
that meets stakeholders aspirations and societal expectations.
(Chartered Secretary, Oct, 1997).

9.2 COMMITTEE RECOMMENDATIONS ON

CORPORATE GOVERNANCE

Cadbury Committee (1991)

The Cadbury Committee, under the chairmanship of Sir Adrian Cadbury, was set up
by the London Stock Exchange in May 1991. The committee, consisting of
representatives drawn from the top levels of British industry, was given the task of
drafting a code of practices to assist public enterprise. In defining and applying
internal controls to limit their exposure to financial loss, from whatever cause.
Birla Committee (2001)
The first formal committee was appointed by Securities and Exchange Board of India
(SEBI), under the Chairmanship of Kumara Managalam Birla (known as Birla
Committee). This was set up after the CII code on corporate governance was
framed; to study the corporate governance from listed companies’ perspective and
culminated when its recommendations were included in the listing agreement.

The recommendations were applicable to listed companies; their directors,

management, employees and professionals associated with such companies and other
bodies corporate.

The major recommendations of Birla Committee on corporate governance were:

• The Board of directors of a company should have an optimum combination of

executive and non-executive directors with not less than 50% of the Board
consisting of non-executive directors. In case the company has a non-executive
chairman, at least one-third of the board should consist of independent directors.

• Board meetings should be held at least four times in a year with a maximum time
gap of four months between any two meetings.

• The Board should set up a remuneration committee to determine the company’s

policy on specific remuneration packages for executive directors.

• The Board should set up a qualified and independent audit committee.

37
Public Enterprise: • Companies should required to give consolidated accounts in respect of all their
Accountability and subsidiaries. A company having multiple lines of business should be segmental
Governance
reporting.

• A management discussion and analysis report should form part of the annual
report to the shareholders covering industry structure, opportunities and threats,
segment wise or product wise performance, outlook, and risks.

• Companies should arrange to obtain certificates from their auditors regarding

compliance of corporate governance provisions and the certificates should be
sent to stock exchanges and all the shareholders.

As mentioned, these recommendations were incorporated in the listing agreement

(Clause 49) and were sought to be implemented within a time frame of three years.
Later, these recommendations got statutory recognition when they were introduced a
provisions in the Companies (Amendment) Act, 2000.

Naresh Chandra Committee (2002)

Following the Enron fiasco and subsequent enactment of Sarbanes-Oxley Act in the
US, Government of India [Department of Company Affairs (DCA)] had set up
another committee to study corporate governance. This committee was formed under
the Chairmanship of Naresh Chandra (known as Naresh Chandra Committee/NC
Committee).

This committee examined various governance issues, such as:

a) Statutory Auditor – company relationship including independence of Audit
functions and restriction on non-audit services.
b) Need for rotation of statutory audit firms.
c) Advantages of setting up an independent regulator.
d) Role of independent directors for their composition in Board.
After discussions with trade associations and professional bodies the committee made
the following recommendations.
• Disqualification for audit assignments like prohibition of non-audit services and
any direct financial interest or any other business relationship with the audit client
by the audit firm.
• Prohibition of service during cooling off period i.e., no partner or member of the
audit team can joint the audit client nor any key officers of the client can join the
audit firm during this cooling off period (two years)
• Prohibition of undue dependence on an audit client; audit fee received from any
one audit client and its subsidiaries should not exceed 25% of the total revenues
of the audit firm.
• A special resolution should be passed in case an auditor is to be replaced, who is
otherwise eligible for re-appointment and an explanatory statement should
disclose management’s reasons for such replacement.
• In case of all listed companies and companies whose paid up capital and free
reserves exceeds Rs. 10 crore or a turnover of Rs. 50 crore, there should be
certification by the CEO and the CFO to the effect that they have reviewed the
financial statements and that these statements reflect a true and fair picture of
the company.
• Independent directors should play a vital role in the board and all the committees
should be constituted of independent directors.
38
• The minimum Board size should be at least seven, of which four should be Corporate Governance
independent directors. and Corporate Social
Responsibility
• To specifically exempt independent directors from certain criminal and civil
liabilities.

• DCA should encourage institutions to have regular training programs for

independent directors and make it mandatory for such directors to attend these
training sessions before assuming responsibilities.

Unlike the Birla committee, this committee focused on corporate governance from
the perspective of companies in general, without bifurcating as listed or unlisted.

Narayan Murthy Committee

After this study, SEBI appointed a second committee under the chairmanship of N.R
Narayana Murthy to analyze the compliances of clause 49. Narayana Murthy
committee focused mainly on the role of the audit committee and the board
composition, particularly independent directors. The objective of this committee was
to examine and recommend amendments to the law in order to maintain high
standards of corporate governance and also to ensure that corporate governance is
looked beyond mere procedures and is implemented by companies to is protect the
interests of shareholders.

The recommendations of the committee, in short, are:

• Audit committees should consist of members who are ‘financially literate’ i.e.,
ability to read and understand basic financial statements.
• Audit committees of listed companies should review the financial statements and
certify that they are true and report any material deviations from prescribed
accounting standards if any.
• A statement of all transactions with related parties should be placed before audit
committee for formal approval.
• Procedures should be in place to inform board members about the risk
assessment and minimization procedures.
• To lay down the code of conduct for all the board members and senior
management.
• Nominee directors, if appointed, shall be only by the shareholders and institutional
directors shall be subject to same liabilities as other directors.
• Non-executive director’s compensation should be fixed by the board and should
be approved by the shareholders.
• Companies to frame policies, where by personnel who observe any unethical or
improper practice are able to approach the audit committee directly. Further,
companies should affirm annually that they have provided protection to such
‘whistleblowers’.

A close look at the amendments proposed in the Companies (Amendment) Bill, 2003
reveals that the changes proposed are based upon the recommendations of Naresh
Chandra Committee and Narayana Murthy Committee.

Hopefully, these recommendations when accepted in true spirit, should raise the
standards of corporate governance in Indian firms and make them attractive for
domestic and global capital and should form as base for further evolution of structure
of corporate governance. 39
Public Enterprise:
Accountability and 9.3 CORPORATE GOVERNANCE IN PUBLIC
Governance
ENTERPRISES

Public sector enterprises are ‘generally autonomous bodies’ which are owned and
managed by the government and which provide goods or services for a price. The
ownership of the government extends to 51 percent, or more, in order to make it a
public enterprise/entity. Public enterprises are considered as important instruments for
self-reliant economic growth. They also help speed up economic growth, provide the
required infrastructure, act as tools to achieve various social objectives like better
distribution of income, expansion of employees’ employment opportunities, removal of
regional imbalances, reducing concentration etc. From a paltry Rs. 29 crore in 1951-
52, with 29 PEs the investment in the central public sector went up to well over
Rs. 6,00,000 crores by 2000 with 240 PEs.

Public enterprises have been organized in many ways as distinct autonomous units,
with varying degrees of legal and operational independence. Where an autonomous
legal entity is established by an Act of Parliament or legislature, it is called ‘public
corporation’ or ‘statutory corporation’. These are the principally chosen as
instruments for the management of nationalized industries. The other popular method
followed is forming government companies under the provisions of the Companies
Act, 1956 (Sec. 617), in which not less than 51 percent of the paid-up share capital
he held by the central or the state governments, or jointly by the central and state
governments. A subsidiary of a government company is also a government
company.

The Board of Directors is the top management organ, and is responsible for
implementing the objectives of an enterprise. The board members are nominated by
the shareholders, i.e., government. Under the normal pattern, it includes the
Chairman-cum-Managing Director, one or more full-time functional directors,
officials representing and administrative ministry of finance, and sometimes one or
two other relate ministries, and lastly, one or two non-officials, selected for their
expertise and business experience. Under the trusteeship and entrepreneurial
functions concept, the board looks after its various categories of functions –
establishment of basic policies including corporate strategies, decisions on major
financial matters, selection of key personnel, receiving working reports and, reviewing
and passing judgment upon them.

The functioning of PE boards has been subjected to criticism on various grounds. The
various practices followed, it is complained, do not facilitate the emergence of an
autonomous enterprise management with initiative and operating effectiveness, and
yet be responsible and responsive to the government guidelines and policies. The 40th
Report of the Committee on Public Undertaking (73-74) regretted that the
performance of public undertakings continues to be judged by a variety of vague
objects and considerations. It recommended government presenting a white paper
which can set out the framework of governments general, economic, financial and
social strategy for public sector undertakings, micro-objects – both financial and
economic – of each public undertaking and their review, and also qualification of their
social objectives and obligations and the issue of government directives in appropriate
cases. The nomination of government officials, according to experience, has also to
be termed as superfluous and non-functional. The enterprises are also facing
problems as the government is not strictly adhering to the policy that all heads of
public enterprises will have a five-year tenure. This was accepted to improve the
efficiency of top management.
40
Obligation to the Public Sector Enterprise Corporate Governance
and Corporate Social
Responsibility
a) The role of the executives is to assist the PSE to achieve its objectives as spelt
out in the charter constituting the setting up of the enterprise.

b) It is the obligation of every employee of the public sector administrative ministry

to uphold the Rule of Law and respect for human rights solely in the public
interest while making recommendations or exercising administrative authority. He
or she must maintain the highest standards of probity and integrity.

c) In relation to the general public, the employees in the PSE and administrative
ministries should conduct themselves in such a manner that the public feels that
the decisions taken or the recommendations made by them are objective and
transparent and are not calculated to promote improper gains for the political
party in power or for themselves or for any third party. This would be particularly
significant so far as the customers of the public service are concerned. This will
apply also mutatis mutandis to the employee in the administrative ministry
concerned with the PSE.

d) Employees of the PSEs/administrative ministries should not seek to frustrate or

undermine the policies, decisions and action taken in the public interest by the
management decision. Where following the instruction of the superior authority
would appear to conflict with the exercise of impartial professional judgment or
affect the efficient working of the enterprises, he/she should set out points of
disagreement clearly in writing to the superior authority or seek explicit written
instruction. This will apply also mutatis mutandis to the employee in the
administrative ministry concerned with the PSE.

e) Where an employee of the PSE has reasonable ground to believe that he or she
is being required by the superior authority to act in a manner which is illegal or
against the prescribed rules and regulations or if any legal infringement comes to
his or her notice, he or she should decline to implement the instruction, and would
also have a right to bring the facts to the notice of the Chairman / Managing
Director of the enterprise or the Secretary of the Administrative Ministry / the
Cabinet Secretary to examine the issue carefully to concerned employees in the
administrative ministry.

Accountability and Responsiveness to the Public

a) Consistent with accountability to the superior officers and the ministers in

accordance with provisions governing PSE/administrative ministry, the employees
in the public sector should practice accountability to the people in terms of quality
of service, timeliness, courtesy, people orientation on readiness to encourage
participation of and form partnership with citizen groups, for responsive management.

b) Employees in the PSE/administrative ministry should be consistent, equitable and

honest in their treatment of the members of the public, with particular care for
the weaker section of society and should not even be or appear to be unfair or
discriminatory. Decision in pursuit of discretionary powers should be justifiable on
the basis of non arbitrary and objective criteria.

c) Employees in the PSE/administrative ministry should accept the obligation to

recognize and enforce customers right for speedy redressal of grievance and
commit themselves to provide services of declared quality and standard to customers.

d) Employment in the PSE/administrative ministry should respect the right of public

to information on all activities and transactions of the organizations except where
they are debarred in the public interest from releasing information by provisions
of law or by valid instructions. 41
Public Enterprise: Concern for Value of Public Assets and Funds
Accountability and
Governance
The employees in the PSE/administrative ministry should avoid wastage and
extravagance and ensure effective and efficient use of the public money within their
control.

Non Abuse of Official Position

Employees of PSE/administrative ministry have a responsibility to make decisions on

merits. They are in a position of trust. They must not use their official position to
influence any person to enter into financial or arrangements with them or with any
one else. They must not abuse their official position to obtain a benefit for themselves
or for someone else in financial or some other forms. This will apply also mutatis
mutandis to the employee in the administrative ministry concerned with the PSE.

Continuous Improvement through Professionalism and Teamwork

It shall be the duty of every employees of the PSE/administrative ministry to

continuously upgrade his/her skills and knowledge, strive for creativity and innovation
and nurture the values of team working and harmony. He / she should promote and
exhibit public and private conduct in keeping with the appropriate behaviour and
standards of excellence and integrity. He / she should support the junior in the latter’s
efforts to resist wrong or illegal directives and in abiding by the Code of ethics. At the
same time, they should reward good work and publish any dereliction of duty and
obligations based on objectives and transparent criteria.

Public Accountability

For accountability in the case of central government enterprises, the appropriate

legislature is Parliament, and for state-owned enterprises, the respective state
assemblies. The principle followed here is, as Mr Appleby observes: “Parliament
performs quite admirably when it debates the important questions of Policy. The
wisdom of non individual is substitute for the general wisdom of society, and the
general judgment of society is more closely approximated by a representative
legislature than by any other entity”.

PEs come in for parliamentary consideration through debates, short discussion,

questions, Committee on Pubic Undertakings, and also public inquiry
recommendations made by COPU. The feeling is that MPs are mostly interested in
raising issues of topical nature and those effecting their constituency / state and do
not raise critical issues, such as the government’s failure to fulfil promises made in
various policy statements, eg., Policy Statement of July 1991. The COPU examines
the reports and accounts of PEs, examines the Management Review and
Responsibility

Appropriate Governance Model for PEs

In the literature on corporate governance a distinction is drawn between the “insider

model” and the “outsider model” of corporate governance. The insider model is one
in which a compact group of shareholders business families/houses in India and East
Asia exercise full control over the corporate entity in such a way that the professional
managers hardly enjoy any decision making powers. Overwhelming part of the Indian
corporate economy has adopted the insider model of corporate governance. The
board of directors of such companies are often rubber-stamping authorities with the
boards concurring with almost all the proposals made by the controlling families. The
outsider model of corporate governance is characterized by a separation of control
42
from ownership arising separation of control from ownership arising from a widely Corporate Governance
dispersed equity ownership among large number of institutional and innumerable small and Corporate Social
Responsibility
shareholders. Consequently governance such corporate entities vests with
professional managers and their board of directors. Growing importance of the
economies of scale and scope has necessitated birth of the large firm with its
necessitated birth of the large with its distant shareholders and professional managers
who have to handle complex tasks and responsibilities.

In the case of insider model, the debate on good governance is concentrated on

ensuring that the controlling business family does not appropriate most of the gains.
Several studies on the last East Asian Crises have highlighted that the insider model
of corporate governance prevalent in these countries was largely responsible for
aggravating the seriousness of this crisis. In the case of the outsider model, the main
concerns relate to devising mechanisms to tackle what is known as the agency
problem viz., how to ensure that professional managers function in the interests of
shareholders and the stakeholders.

In the case of PEs ascertaining wishes of the ultimate shareholders (Voters) is

difficult since it is not a practical proposition to put board resolutions for voting at the
AGME/EGM in the same manner as in the case of typical listed company. The
common voters elect their representatives who in turn form a government in turn is
supposed to ensure that voters wishes are translated into concentrate actions.

“In reality far more complex problems arise especially because the layered and
hierarchical principal-agent structure that characterizes the public sector ownership.
The ultimate owners of the public sector entities viz., the voters express their
interests / objectives in a diffuse, indirect and cultured up manner. However, when
the governments/ politicians act on behalf of the owners or the voters to crystallize
owners/voters’ interests in terms of specific objectives, they are prone to could these
objectives to the extent that their self interests influence interpretation of voters
objectives. Since governments / politicians act as principals through civil service,
another layer is added to the principal-agent chain. Civil servants too are liable to act
as agents by allowing their own objectives to dominate their own actions during
administration of public entities.

One may argue that already we have eminent bodies like the Public Enterprise
Selection Board (PESB). The PESB recommends personnel for the posts of
Chairman, Managing Director, Chairman & Managing Director (CMD) and
Functional Directors in PEs as well as posts at any other level. PESB is also
expected to advise the government on such matters as (A) the desired structure of
the boards, (b) performance appraisal system for both PEs and their managerial
personnel, (c) build data bank on the performance of the PEs and their key personnel,
(d) formulation and enforcement of code of conduct for PEs managerial personnel
and (e) suitable training and development programmes for management personnel in
PEs. Despite all these lofty goals placed before the PSEB, the matters have not
improved much in regard to the PEs. Complaints about their performance in all the
matters vested with the PESB continue to be voiced, sometimes loudly even in highly
respectable and responsible quarters. Instances of PEs remaining headless for long
periods of their boards not being constituted with adequate number of functional and
independent directors continue to be frequent and numerous. Quite often the
appointment process gets bogged down because of complaints with regard to integrity
of the candidates being considered for the PEs boards. There are also instances of
spurious complaints lodged by competing candidates, thereby necessitating vigilance
inquiries. In many instances it is a hurdle race especially for competent and clean
candidates, who often prefer to remain out of the race if they attack higher value to
enjoying peace of mind.

43
Public Enterprise:
Accountability and 9.3 SOCIAL RESPONSIBILITY OF BUSINESS
Governance

The growth of large corporations with their professional managers has changed the
nature of society through its effect on competitive forces and the ownership of
private property. With their increases power in society, they are forced to concern
themselves with the nature of social responsibilities. Management must take decisions
involving moral issues and must adapt itself to the social forces that affect it. The
idea of social responsibility of business is based upon the concept that business is
something more than a purely economic institution.

Public Enterprises operates within the precincts of the society. While its immediate
society, where it operates, provides its environment, material, manpower, market etc.
the whole global society provides for its global corporate citizenship and ensures its
facilities in terms of environment, market, perspectives, exposure to technology and
integration with priorities in the business scenario. The social responsibility of Public
Enterprises consists of its responsibility to its consumers and customers, its prospects,
its immediate society (community), its human resources (people), its society at large,
ecological environment, the Government, and its business environment. Social
responsibility of business is not new to our country. In the olden days, whenever there
was a famine, the leading businessmen of the area would literally throw open their
godowns and their treasure chests to provide food and other assistance to the needy.
The history of every region of this country is replete with stories of the magnificent
manner in which businessmen rose to the occasion in times of calamity. Even in
ordinary times, it was the businessmen who looked after the welfare of the destitute,
the goshalas, wells and ponds wherever what was difficult to get, the pathashalas and
so on. So to accept social responsibility is no more than rededicating ourselves to the
cherished values in the field of business. Gandhiji reminded of these values when he
propounded the theory of trusteeship. India is a democratic welfare state. She wants
to achieve welfare through democratic means. Business organization, which fit in
with such a specification, would have a better scope to survive and grow here. In
order to make them suitable for such a business environment, they should foster a
corporate objective of maximizing social benefit. This must be considered as the
social responsibility of business. It pertinently means that every business enterprise
has a responsibility to take care of the society’s interest.

Though the fundamental purpose of Public Enterprises is to produce and distribute

goods and services in such a manner that income exceeds costs, society expects that
business is conducted in a socially responsible manner. Social responsibility embraces
multitude of internal and external relationships of the firm. Business enterprises,
conscious of their social responsibility, would seek to comply with the laws concerned
with employment of women, non-discrimination in employment, ecological effects of
production, consumers, and employee welfare, and in general they would think of the
impact their action on the community.
Social and ethical aspects of business impinge upon the choice of strategy. How
societal values and expectations after business and how a firm perceives its social
and ethical obligations are interactive in character and both of these may become
constraints in strategy formation. That how consumerism, occupational health and
safety, product safety, concern for environmental protection, nutritional issues, beliefs
about ethics and morals and other for environmental protection, nutritional issues,
beliefs about ethics and morals and other similar societal based factors impact upon
the strategies have to accommodate these factors. Some instances can be cited.
Most of the Public and Private Enterprises adopted the villages for development.
Most of the Enterprises launched awareness camps about AIDS. Cigarette
manufacturers have reduced the tar and nicotine content of cigarettes. Food
processors have altered the use of preservatives in food products and have begun to
44 promote nutritional content and “natural” flavours.
The lending institutions have given up their overly concern with safety or security of Corporate Governance
money advanced and are now more concentrating on the competence of the and Corporate Social
Responsibility
entrepreneure and commercial viability of the project. All these instances demonstrate
how business has adapted itself to changing social values and expectations.
Running the enterprise in a “socially responsible” manner implies that the activities of
the organizational are in tune with what is generally perceived as in the public
interest. It also implies that the firm responds positively to emerging societal priorities
and balances the interests of its various stakeholders. Further, it realizes the
importance of being “good citizen” in the community and makes social and ethical
obligations an explicit and high priority consideration in conducting its affairs.
Being “socially responsible” has a positive appeal. The organization improves its
standing in the public, which has the effect of enhancing its own performance
opportunities. If the firms ignore the changing priorities and expectations of society,
the result could be greater public criticism and more onerous regulation by government.
Concern for social responsibility has led to the development of (more or less) formal
procedures to monitor corporate compliance with changing demands. One such
procedure is “social audit”. It is also common knowledge these days that business has
attempted through advertising and public relations activity to explain and accentuate
its consistency with various social objectives. Recognition of the need for social
responsibility has also led several large enterprises to make intentional efforts to increase
their sensitivity towards current and future pressures for changes in social expectations.

9.4 SOCIAL RESPONSIBILITY STRATEGIES

In view of the ongoing controversy regarding whether or not a business has social
responsibility, it is not surprising to find a wide range of industry responses to the
issue. Business responses to social responsibility tend to fall within four categories: (i)
Social opposition, (ii) social obligation, (iii) social response, and (iv) social contribution.
As illustrated in Fig. 9.1, these positions fall along a continuum, ranging from low to
high levels of socially responsible behaviour.

Degree of
Social
Responsibility

Social Social So
Contribution Response Oblig

Figure: 9.1: Approaches to Social Responsibility

Source: Gene Burton and Manab Thakur, Management Today 45
Public Enterprise: Social opposition: This view is taken by the business which feel that they have no
Accountability and obligation to society in which they operate. When they are caught for any offense,
Governance
their immediate responses is to try cover it up while denying it.

Table 9.1: Common Characteristics of Socially Responsible Firms

1. Initially founded by far-sighted people who visibly set the firms moral tone.

2. Stuck to the basics and produced only high quality goods and services for specific
market niches.

3. Developed a public image that emphasized that commitment to quality and often used
non-traditional means to promote it.

4. Firmly practiced the dual principles of self-management and decentralization.

5. Brought in outside people to provide needed talent and additional perspectives.

6. Encouraged all employees to become part of the shared mission through full worker
participation in decisions.

7. Paid fairly and usually offered benefit packages exceeding the competition.

8. Emphasized a democratic people orientation and did without executive perks.

9. Constantly solicited feedback from customers on all subjects from product direction
to corporate donations.

10. Top managers possessed an extensive knowledge of current events and took a
wide-ranging interest in affairs outside their business.

11. Offered donations in cash or services to people in need of help.

12. Took an active role in the operations of their local communities.

13. Deal with like minded businesses and encourage their employers to do the same.

14. Constantly look to the future but always pay attention to the past.

Social Responsibility Towards Different Groups

1. In addition to making a fair and adequate return on capital, business must be just
and humane, as well as efficient and dynamic. The modern business has manifold
responsibilities (a) it self, (b) to its customers; (c) employees; (d) owners,
shareholders and partners, (e) community and (f) the state. The task of
management is to reconcile and harmonise these separate and sometimes
conflicting responsibilities.
2. The S.R. of Business can best be assumed in an atmosphere of freedom with the
least possible restraint on healthy competition. Concentration and monopoly have
to be watched and guarded, and wherever necessary, dispersed.
3. Every business has an overriding responsibility to make the fullest possible use of
its resources, both human and capital. Management has the responsibility to
provide security of employment with fair wages and equal opportunity for
personal growth and advancement within the business, which is a requirement of
justice, and means of securing efficient management.
4. It highlights the respective roles of the enterprises, the shareholders, the workers,
the customers, the management and the community. The responsibility of
management is to fulfill the fair first needs of these claimants besides, providing
consumer satisfaction.

46
5. It laid emphasis on the reciprocal duties between business and the community Corporate Governance
through laying down of practical measures like reliable means of communication, and Corporate Social
Responsibility
better education of he citizens about civil responsibilities, local meetings and social
audit.

On the basis of the above seminar report, we may put down the social responsibilities
of Business, in the Indian context in the flow chart given below

We discuss, in the paragraphs that follow, the S.R. of business towards these
different groups. The following flowchart presents business’s social responsibilities
towards different groups.

Business Firm’s Responsibilities

Towards Owners/ Towards Employees Towards Customers

Shareholders
• Fair Dividend • Meaningful Work • Fair price

• Solvent and Efficient • Job Satisfaction • Superior Quality

Business

• Optimum use of • Fairness Salaries • Superior Service

Resources & Benefits

• Planned Growth • Best Quality of • Superior Product Design

Work life

• Effective • Succession Planning • Quick and Complete

Communication and Development Information

Towards Government Towards Society Towards Inter-Business

• Payment of Taxes, • Employment without • Fair Competition

Custom Duties etc Discrimination

• Abide by the Laws • Employment to • Cooperation for Sharing

Disadvantaged Persons of Scarce Resources and
Facilities

• Observe the Policies • Community Welfare • Collaboration for

Services Maximisation of Business
efficiency

• Maintain Law & • Business Morality

Security • Maintaining Pollution free
Environment

• Maintaining Ecological
Balance

47
Public Enterprise: Social Audit, which is a tool for evaluating, verifying and reporting the performance
Accountability and of the firm in the sphere of social responsibility. It will help a “socially conscious
Governance
organization” to bring about greater strategic articulation and desirable modifications
in its social policies and programs. In this unit the term social audit is defined and the
desirability of undertaking social audit by a business enterprise is discussed. The
various frameworks or methodologies for conducting social audit are explained. The
potential difficulties that could be faced by an organization adopting social audit are
discussed and critically evaluated. The status and the state of art of social audit in
relation to India is examined and analysed. Finally, what looks like the future of social
audit is explored.

48
 Case Study 1 Corporate Governance
and Corporate Social
Responsibility
SOCIAL RESPONSIBILITY OF BUSINESS:
BHARAT PETROLUEM

Introduction
Bharat Petroleum Corporation Limited (BPCL) is a downstream oil refining
and marketing company. The company has its network spread over all the four
regions in India and is represented in almost all markets. It caters to different
petroleum sectors – Liquefied Petroleum Gas (LPG) and Kerosene for
domestic consumption, automotive fuels and lubricants for vehicles, and
feedstock and fuels for industrial applications. The company also manufacture
petrochemicals like Benzene, Toluene, Linear Alkyl Benzene feedstock etc.
With a sales turnover of Rs. 25,650 crore and profits of Rs. 701.30 crore in
1999, BPCL is the 5th largest company by sales in India. Its strength lies in an
efficient refinery and strong distribution network, which has given it a 20%
market share in petroleum products in India. BPCL has a tie up with Shell
Petroleum Co. of Netherlands to manufacture and market Shell lubricants in
India. In a major expansion move, BPCL is increasing its refining capacity
through 3 joint ventures and also adding on to its distribution strength by laying
a similar number of pipelines. BPCL is also planning a foray into
petrochemicals through a 1.8 million tonnes (mt) naphtha craker plant in Tamil
Nadu for around Rs. 7,000 crore and this project is scheduled to go on stream
by 2002.

Ecological Concern
BPCL has been continuously striving towards conservation and improvement
of the environment by adopting new technologies. In March 2003, BPCL
introduced low lead MS (with 0.15 gm of lead per liter) in the country. From
April 1996, HSD with a maximum sulphur content of 0.5% by weight, was
introduced in the metro cities and in the Taj Trapezium. From September 1996,
HSD, with a maximum sulphur content of 0.25% by weight, was introduced in
the Taj Trapezium. To meet the requirement of HSD all over the country with
the revised specification of maximum sulphur content of 0.25% by weight,
from April 1999, facilities for Diesel Hydro De-sulphurisation are being put up
in the refinery. Distribution of other low sulphur fuels (which has maximum
sulphur content of 1.8% by weight) was started in the National capital region
from October 1996, which ended the use on High Sulphur FO and RFO. BPCL
conducted two advertising compaigns of behalf of the industry – the first on the
importance of LPG conservation and the second on the introduction of low
leaded petrol. On the pollution control front, BPCL has set up a special
sophisticated plant to meet the stringent standards set by Minimum National
Standards for Effluents from Oil Refineries (MINAS). BPCL’s emission
standards are far more stringent than the limits laid down by the Pollution
Control Board. BPCL had also invested around Rs. 220 crore, in pollution
abatement and energy conservation systems.

Contd....

49
Public Enterprise: Contd....
Accountability and
Governance
Safety and Social Commitments.

Safety continued to be accorded the highest priority in BPCL both in refining

and marketing operations. In 2002-03, its refinery achieved 3 million man-hours
without Lost Time Accident (LTA) on one occasion and one million man-hours
without LTA on two occasions. The microprocessor based control system as
its refinery monitors the operating conditions for safety hazards and the
refinery is divided into three separate areas as high risk, low risk and medium
risk. Each employee, irrespective of levels, is given fire-fighting training and
mock drills are carried out at quarterly intervals for different range fires.
Employees are given training on simulators so that they learn by committing
mistakes on simulators and not in real conditions. BPCL’s Mumbai refinery has
a Mutual Aid agreement along with the neighboring 9 industries for fighting
major fires.

As a result of higher exposure to various safety awareness programs, there

has been a reduction of injuries in BPCL’s refinery by 34% for its own
employees, and 43% for contractors’ employees, in 1996-97. Moreover the
frequency of LTA has come down from 1.5% to 0.6% for its employees and
from 5.6% to 1.7% for contractors employees. To enhance safety
performance, BPCL introduced ‘safety by walk-around’ concept wherein
experienced officers were appointed as safety surveyors and safety sampling
was done by senior management staff. It also organized a safety symposium at
its refinery in which members from the oil industry, government bodies. Oil
awareness on LPG safety, BPCL also screened one-minute films on the safe
handling of LPG, on popular TV channels.

BPCL sponsors many sporting events like Santosh Trophy, National Football
Tournament, and also coaching camps for youngsters. Lifeline Express was
contributed to social welfare – a fully equipped train, which look the latest
medical technology to remote villages of India. The company has also adopted
11 Scheduled caste/Scheduled tribes villages under the Component and Tribal
sub-plan. The facilities provided by the company include community centers,
tube/borewells, educational support medical facilities, vocational guidance and
training to make villagers self-reliant and improve their standard of living.

Achievements

BPCL was adjudged the winner of the ‘Oil Industry Safety Awards’ for its
safety performance being the best among all the “LPG Marketing Organization
in 1995-96” for the fourth year in succession. BPCL’s annual report for 1994-
95 was selected by ICAI as the best presented amongst the public sector/joint
sector companies for the second year in succession. The South Asian
Federation of Accountants also adjudged the same as the second best
presented in the non-financial sector in the SAARC region. BPCL received
ISO-9002 certification from Bureau Veritas Quality International (BVQI) for
15 out of its 22 bottling plants. BPCL has also received ISO-9002 accrediation
for its refinery, aviation service stations at Mumbai, Delhi, Calcutta and
Bangalore depots at Miraj and Mysore and lubricants blending plant at
Wadilube.

50
 Case Study 2 Corporate Governance
and Corporate Social
Responsibility
SOCIAL RESPONSIBILITY
AFFLUENCE FROM EFFLUENTS

The Rashtriya Chemicals and Fertilizer’s Chembur plant is one of Bombay’s

most well known cases of industrial pollution. The company, in the face of
sustained public pressure, is making attempts to reduce environmental damage.
When the World Bank instituted the Industrial Pollution Control Project
(IPCP). RCF was one of the first to approach IDBI. In January 1993, RCF
entered into an agreement with the financial institution for a DM 12.5 million
(approximately, Rs. 45 crore) loan at 15.5 percent.

RCF’s problem was its two ammonia plants. These plants have been score
spot for the company and have been shut down on more than one occasion. At
the time the plants were setup, it was not mandatory, to include cost of pollution
control equipment in the project cost. But as local residents started complaining
about the pollution levels, RCF started looking for alternatives.

There were modifications going on in both plants. RCF had to wait till these
were complete to be able to estimate the volume of pollutants that would
require treatment. Finally a Ministry of Environment notification in the late
1980’s ordering them to clean up forced RCF into action.

In the process of manufacturing ammonia, certain gases are accumulated

which need to be removed by purging. Using cryogenic technology bought
from a German firm, RCF decided to set up a purge gas recovery plant, which
would in the process of treating ane-rich fuel, both of which can be sold
commercially, thereby making pollution control not just pay for itself but also
generate additional resources. And at the end of the process, the plant
produces no effluents.

RCF’s choice of technology is determined by financial considerations. They

had three options. In the first case, they could simply treat the ammonia, which
is all they are required to do under the regulations. Their internal rate of return
(IRR) for just ammonia recovery was an uneconomical 10.7 percent. Their
second option was to choose ammonia and synthetic gas recovery, for which
the IRR was 27 percent. The final option, the one they chose, includes the
recovery of liquid argon and gives them an IRR of 46.3 per cent. Pay back
period is a brisk 26 months.

Whether RCF will actually earn its projected income is doubtful. Since the time
the plant has come up, argon prices have crashed due to excess capacity and
intense competiters are mainly the steel and automobile industry, which use
argon for welding. RCF officials however, say they are safe, because even
recovery to synthetic gas stage gives them an IRR of 27 percent, leaving RCF
a comfortable profit margin.

Social Opposition: This view is taken by the business which feel that they have no
obligation to society in which they operate. When they are caught for any offense,
their immediate response is to try to cover it up while denying it.

51
Public Enterprise:
Accountability and 9.5 SOCIAL AUDIT : INTRODUCTION
Governance
It is generally believed today that it is the duty of the privately owned enterprise to
ensure that it does not adversely affect the life of the community in which it operates.
Though the duty is not clearly defined, it is usually thought that the corporate business
should not cause pollution, should not discriminate in employment, should not make
money from insavoury or immoral activities and should not withhold information from
consumers about their products. It is also expected that they should make positive
contribution to the life of the community.

The corporate business has become an integral part of the functioning of any society.
It is the recipient of the benefits and privileges of the State and society in which it
operates. The society therefore expects the corporate business to assume
responsibility towards it. Earlier it had been assumed that the vast material resources
like water, land and air could absorb the wastes of production and neutralise any
potential harmful effects. Man assumed that the natural environment would always
renew itself. It is abundantly clear now that this is not so. It is common knowledge
that society is being threatened by pollution of land, sea and air. To an increasing
degree, business has been creating conditions that have resulted in many social ills,
though the same may not be by design or choice. There are various social abuses,
some germane to the profit persuit, some to the negligent and unscrupulous behavior
of business leaders. Most would agree that if these conditions are permitted to
continue it must inevitably lead to social suicide. Steps must be taken to correct the
abuses.

With changing social and economic values and with increasing expectations of society
from corporate business, the companies that adjust to the rational changes and help in
pioneering such changes are likely to survive and flourish and those which oppose,
block or restrict the changes may find it difficult to survive in future. Economic goals
or corporate business can no longer be separated from social goals.

Firms have to recognize their due responsibilities and consider these in the planning
and action stages. They must have a social policy which means that they must
include in their accounting the direct costs to society of their operations to the extent
possible. They should communicate their social policy not only to the members of the
organization but also to outside groups. Social audit is a tool for judging how a
corporate entity has implemented its social policy.

The increasing demand for socially oriented programmes of one kind or another and
for measurement and disclosure of environmental effects of organizational behaviour
has created pressure for adopting some kind of social auditing procedure. This unit
attempts to provide a general definition of social audit, discusses the various
approaches or methodologies for conducting social audit and points out the difficulties
encountered in measuring social performance etc.

9.6 WHAT IS SOCIAL AUDIT?

Social audit has been variously defined. As it happens with any new management
technique, there is not yet any definition which has gained acceptance. Bauer and
Fenn define Social audit as “a commitment to systematic assessment of and reporting
of some meaningful definable domain of a company’s activities that have social
impact”. The author’s emphasis is on the assessment and reporting of corporate
social programmes.

52
Dilley defines the social audit as “investigation of an enterprise’s performance as a Corporate Governance
member of the community in which it has its primary impact: such investigations and Corporate Social
Responsibility
consisting of the preparation of an inventory of the socially relevant activities of the
enterprise, qualification (to the extent possible) of the social costs and benefits
resulting from those activities and compilation of the other quantitative information
providing insight into the social performance of the enterprise” (Hindu Business Line,
1997). Dilley’s definition highlights the making of an inventory of the socially relevant
activities and their quantification in terms of costs and benefits.

Caroll and Bailer, describe social auditing “as a form of measurement”. According to
them “Social audit is a natural evolutionary step in the concern for operationalising
corporate social responsibilities and, in its essence, represents a managerial effort to
develop a calculus for gauging the firm’s socially oriented activities. That, it is an
attempt to measure, monitor and evaluate the organizations performance with respect
to its social programmes and social objectives” (Chartered Secretary, Oct, 1997)
Ahmed Belkaoui has attempted to collate the definitions by Bauer and Fenn, and by
Dilley. He states that “Social Audit – much like the financial audit – is an
identification and examination of the activities of the firm in order to assess,
evaluate, measure and report their impact on the immediate social environment”
(Reddy, 1999). The words in bold are important in this definition which require some
elaboration.

1. Identification assures a tracking down and inventory of all the firms activities
having potential impact on the firms environment identification will result in a
definition of the social dimensions of the firms activities in terms of social costs
or social benefits depending on the nature of their impact on the social
environment.

2. Assessment and Evaluation imply the categorisation of the firms impact on its
environment as either positive social benefits or negative social costs.

3. Measurement implies the assignment of a quantitative or qualitative score to

the social costs and benefits identified in assessment and evaluation.

4. Reporting assumes the disclosure of the firms performance as measured.

Features of Social Audit

The nature of social audit can be made more clear if we bring out its salient features.

The areas for social audit include any activity (see Table 9.1) which has a significant
social impact, such as activities affecting environmental quality, consumerism,
opportunities for women and other disadvantaged people in society and similar others.

The second feature about social audit is that it can determine only what an
organization is doing in social areas, not the amount of social good that results from
these activities. It is a process audit rather than an audit for results.

Thirdly, social performance is difficult to audit because most of the results of social
activities occur beyond the company’s gate and the company has no means of
securing data on the results. Even if data are available it is difficult to establish how
many of them have occurred due.

53
Public Enterprise: Table 9.2 Activities Covered by Social Audit
Accountability and
Governance A. Ecology and Environmental Quality:
• Clear-up of existing pollution
• Design of processes to prevent pollution
• Aesthetic improvements
• Noise control
• Dispersion of industry
• Control of land use
• Required recycling

B. Consumerism:
• Truth in labeling, in advertising, and in all business activities
• Product warranty and service
• Control of harmful products

C. Community Needs:
• Use of business expertise to solve community problems
• Reduction of role of business in community power structure
• Aid with health care facilities
• Aid with urban renewal

D. Governmental Relations:
• Restrictions on lobbying
• Control of business in political action
• Extensive new regulation of business
• Restrictions on international operations

E. Business Giving:
• Financial support for artistic activities
• Donations to education
• Financial support for assorted charities

F. Minorities and Disadvantaged Persons:

• Training of hard-core unemployment
• Equal employment opportunities and quotas for minority employment
• Operation of programmes for alcoholics and drug addicts
• Employment of persons with prison records
• Building of plants and offices in minority areas
• Purchasing from minority businessmen
• Retraining of workers displaced by technology

G. Labour Relations:
• Improvement of occupational health and safety
• Prohibition of “export of jobs” through operations in nations with law
labour costs.
• Provision of day-care centres for children of working mothers
• Expansion of employee rights
• Control of pensions, especially vesting of pension rights
• Impatience with authoritarian structures; demand for participation

54 Contd....
Contd.... Corporate Governance
and Corporate Social
Responsibility
H. Shareholder Relations
• Opening of boards of directors to members of public representing various interest
groups
• Prohibitions of operations in nations with “racist” or “colonial” governments
• Improvement of financial disclosure
• Disclosure of activities affecting the environment and social issues

I. Economic Activities
• Control of conglomerates
• Breakup of giant industry
• Restriction of patent use

Need for Social Audit

Thus, social audit need be adopted by every corporation to apprise its shareholders,
investors customers, government and the community of the social activities and
financial results of its working. Such information should be disclosed, as mentioned by
the National Association of Accountants’ Committee on Accounting for Corporate
Social Performance in Canada, for four major categories as below:

1) Community Involvement: Socially-oriented activities that are primarily of

benefit to the general public. Examples include : general corporate philanthropy,
housing construction, and financing, health, services, volunteer activities among
employees, food programmes and community planning and improvement.

2) Human Resources: Social performance directed to the well-being of

employees. Categories in this area include employment practices, training
programmes, job enrichment, working conditions, promotion policies and
employee benefits.

3) Physical Resources and Environmental Contributions: Activities directed

towards alleviating or preventing environmental deterioration (pollution). This
category includes the adherence to the law and going beyond it in areas such as
air quality, water quality. Also included is the conservation of scare resources
and the disposal of solid waste.

4) Production or Service Contribution: Concerned with the impact of the

company’s product or service on society. This includes consumerism, product
quality, packaging, advertising, warranty provisions and product safety.

In India, the companies in general and the public sector undertakings in particular
should make disclosure of information for the use of people outside the enterprise,
which include:

i) financial institutions and creditors (who are interested in financial position, fund-
flow and debt-paying capacity of the enterprise);
ii) shareholders, academic institutions and consultants (who are interested in
quantitative and qualitative information regarding proper utilization of resources
transferred to the concern);
iii) the government (for knowing about financial and statistical information for
planning and operating of those enterprises and initiating and administering
financial and economic polices and programmes at state and national levels
55
Public Enterprise: iv) trade unions, political leaders (require information for broad labour policy
Accountability and decisions, for etc); and
Governance
v) environments (who need information regarding air and water pollution ecological
imbalances, depletion of resources and conservation of energy).
Disclosure of information should be thus financial and non-financial.

Financial Information

This includes the disclosure of financial position of the firm, the form of balance
sheet, profit and loss accounts, special accounts, audit reports. Such information is
mainly disclosed in quantitative form, such as income and expenditure of the
company, sources and uses of funds, details about assets and liabilities, working
capital, new capital investment, outstanding distribution of earnings, interest taxes
paid, liquidity position and incentives. Financial information reveals the true position of
a company regarding its liquidity and bankruptcy.

Non-Financial Information

This includes information relating to social performance, human resources, marketing

activities, business environment, production etc. Such information may be disclosed in
quantitative and qualitative terms, but the disclosure of information is to influence
profitability in the long run and to build the company’s image.

Information on social performance generally includes various activities regarding

employee welfare, community work and involvement, social cultural programmes,
role of company in solving social problems of the area, programmes dealing with
training and developing human resources etc. Social programmes are specified in
annual reports.

Information on human resources includes expenditure on recruitment, selection,

training and development of employees, facilities for self-development in organization,
special provision for development of hard-core unemployed persons, sponsoring
executives for delivering lectures in universities, educational institutions and for
foreign training. Such information is disclosed in the Directors’ Report and the
Chairman’s speech.

Information on marketing includes sales figures product-wise and plant-wise, cash

and credit sales, pricing and impact of competition on pricing, product innovations and
development, quality of product advertising and promotional efforts for distribution of
the products, selling commission traveling expenditure of marketing personnel, etc.
Such information is disclosed in the Directors report. Chairman’s statement or in
advertisements etc.

Environment information includes information about the political, economic, socio-

cultural and technological environment, especially on such items as inflation,
unemployment, impact of changes on taxes, changes in legal requirements of business
activities, contribution and participation in company in community development,
technological development, pollution control measures, use of indigenous materials
and efforts at conservation of natural and human resources. The disclosure of
information finds place in the annual reports and chairman’s speech.

56
 Corporate Governance
9.7 SOCIAL AUDIT IN INDIA and Corporate Social
Responsibility

In India, the TISCO has been the first company to set up a Social Audit Committee
for conducting social audit of its work under the chairmanship of Justice S.P. Kotwal,
and Prof. Rajini Kothari and Prof. P.G. Mavalankar as members. This committee
was entrusted with the task of “examining and reporting whether, and the extent to
which, the TISCO has fulfilled the objectives contained in Clause 3A of its Articles of
Association regarding its social and moral responsibilities to the consumers,
employees, shareholders, and the local community”. The Committee opined, “On an
examination of all aspects, the company has fulfilled its obligations to all concerned.”

Started with TISCO the social audit has picked up. UTI, the premier financial
institution has also planned for a social audit. In the report for 1993-94, the chairman
of UTI has declared that “to address the question as to what extent this unique
organization has been able to fulfill its responsibilities vis-à-vis its various publics and
society at large. And independent social audit committee of five eminent citizens has
been setup”.

9.8 BENEFITS OF SOCIAL AUDIT

The benefits of social audit are as follows:

1. Social audit enables the company to take close look at itself and understand
how far the company has lived up to its social objectives.

2. Related to the first benefit is the fact that social audit encourages greater
concern for social performance throughout the organization.

3. Social audit provides data for comparing effectiveness of the different types of
programmes.

4. Social audit provides cost data on social programmes so that management can
relate the data to budgets, available resources, company objectives, and
projected benefits of programmes.

5. Social audit provides information for effective response to external claimants

that make demands on the organization. News know what a business is doing
in areas of their special interest, and a business needs to respond as effectively
as possible. The social audit shows a business where it is vulnerable to public
pressure and where its strengths lie.

Activities

a) What activities of the organization in which you are working (or with which you
have been associated) fall, in your view, in the area of social audit?

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57
Public Enterprise: b) Discuss the social reporting done by your organization.
Accountability and
Governance
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9.9 SUMMARY

In recent times corporate governance and corporate social responsibility have

become the talk of the day. In almost all business organizations, this concept is now
being used formally. This has gained a wide recognition as it is important for the
economic health of the organization and the welfare of the society at large. Since
early 90s recommendations of different committees have been taken into
consideration to understand the practical approach to the concept of corporate
governance.

Social responsibility in business or more popularly known as corporate social

responsibility means that the organization has to work in tune with the public interect.
This comprises of areas like social audit. This becomes a monitoring tool for the
public enterprises so as to enhance the efficiency of these enterprises.

9.10 SELFASSESSMENT QUESTIONS

1. Define Corporate Governance?

2. Discuss the obligations of public enterprises?
3. How Corporate Governance is relevant in today’s context? Explain?
4. Why Social Responsibility is important for the business?
5. What are your recommendations of social responsibility?
6. Explore one successful enterprise of your choice, which is society oriented?
7. Bring out the features and benefits of social audits?

58
 Corporate Governance
9.11 REFERENCES and Corporate Social
Responsibility

www.bharatpetroleum.com

The Hindu business line, (1997).

Corporate Governance. (October, 1997). The New Paradigm, Chartered Secretary

October.

The Freedom to be Giants. (July 1997). in Leash, The Economic Times.

Reddy, B. Rathan. (1999). Essentials of Business Environment. Institute of Public

Enterprise.

Mishra, R.K. (2002). Restructuring of State Level Public Enterprise. Institute of

Public Enterprise.

Mishra, R. K. & Reddy, Venugopal. (1995). Public Enterprises towards a White

Paper.

Corporate Governance Putting Investors First: Scott C. Newquist with Max B.

Russel, Jaico books. www.jaicobooks.com

‘Corporate Governance and PSU’. Dec. 19, (1996) The Economic Times..

Committee on Financial Systems. (1998). (Narasimham Committee-part II).

9.12 FURTHER READINGS

Corporate Governance. October, 1997. The New Paradigm, Chartered Secretary.

Reddy B. Rathan. (1999). Essentials of Business Environment,

Institute of Public Enterprise.

Mishra, R. K. (2002). Restructuring of State Level Public Enterprise, 2002

Institute of Public Enterprise.

Mishra, R. K.& Venugopal Y. (1995). Public Enterprises towards a White Paper.

59