Talk on dark side of corporate governance

In the fast paced business integrating with the global economy a corporate governance is reflected in not just good environment, eminent board of directors, financial stability but also in constant improvement in quality of goods and services and consumer satisfaction. The rare insight was shared by Robin Banerjee, Managing Director of Caprihans India Ltd who is a Chartered Accountant, Cost and Management Accountant, Company Secretary, and has a master’s degree in commerce. He drew upon the experience of working in key positions with several large multinational corporations in over 20 countries. He focused on the questions of “Were you ever exposed to corporate fraud? Between what is corporate fraud? What is the dark side? What is good governance?” He went on to explain, “Knowingly or unknowingly, you would have seen or participated in any one of the frauds related to corporations as we live around people who are into corruption. Corporate fraud and the dark side are the same thing. They are another face of a good side which is not directly seen by the public.” He illustrated with an example: Restaurant. Yes, you would have noticed a few restaurants which were open a year before pandemic time would have closed within 6-7 months of time by your next visit. What might be the reason? Isn’t it that the restaurants are usually opened by good chefs, political members, one with good funding? It has fallen not because of finance stability but because of poor management or poor governance or SOP (Stand operating procedure). The restaurants which have existed for several years have kept customer satisfaction as their top priority. “Ethics in Corporate governance, the main ethical focus of a company will be satisfying the needs of the customers. Here there will be no chance for fraud. Many Germans based and French based companies are known for following ethics in the corporate governance. Running business ethically, TATA is known for running business ethically. Author had visited the Taj with his friend for a cup of coffee and a sandwich. After a few minutes of delivering the food to the Author the waiter asks for the review. To that the author said that the coffee tasted good while the sandwich tasted bad. The waiter instantly offered a refund for the author. Taj runs an ethical business. When you talk about corporate governance it is all about not to cheat customers, employees, board of directors and to the law.” He described another example: As and when the demand for honey increased during pandemic times, IARI took samples of honey and tested many of the branded honey. To their surprise 11 out of 14 branded honeys were adulterated. They were all well-known big brands which survived the market for years together. He was asked to use honey by most of the people during pandemic times as it is an immunity booster. Now after knowing this he stopped getting other products related to the same honey brand being a consumer or customer. This is a dark side of good governance. “Sometimes I wonder if the international companies are better as people over there do not compromise on the quality of product than people over here.” McKinsey knowingly funded a pharma company which distributed Opium, which is used in small amounts to treat cancer patients as a pain relief) for more than hundreds of people who died using Opium in huge amounts. The case could not be filed on McKinsey as there was no direct involvement of them in the scam, but was asked to pay a huge amount as a penalty. Three things to be concerned about: “Wilful defaulter, Cyber crime and Cryptocurrency. Wilful defaulter refers to the entrepreneur who is not returning the amount taken by the banks even after confirmation by the court that they had borrowed the amount long back. Cybercrime has increased 300-400% every year. People were into con activities more during pandemic times as they had to face financial crisis. They hack mobiles, bank accounts etc. No system in the world is unhackable.” According to the author the cryptocurrency has limited value. The online talk on the dark side of corporate governance was organized by the Department of MBA, RR campus on January 17, 2022.