National Seminar on Standards for Quality
& Empowerment
Good Governance
Dinesh Agrawal
GM (CSR), NTPC
22 June 2011, New Delhi
Organisational Governance
• Organizational
governance is the set
of processes, customs,
policies, laws and
institutions affecting
the way in which a
organization is
directed, administered
or controlled.
22 June 2011
by Dinesh Agrawal at DRDO, New Delhi
2
Good Governance
• It includes the relationships among the constituents and
the goals for which the organization is governed.
• It is operationalised by the persons having the authority
and responsibility for pursuing the organization’s
objectives, i.e. the purpose for which organization exists.
• It is maximizing value for all stakeholders, transparency in
functioning, and respect and mutual trust amongst all
constituents of organization and stakeholders.
22 June 2011
by Dinesh Agrawal at DRDO, New Delhi
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Constituents
• Owners, members or constituents of the organization like share holder in
case of companies and members of general body in case of societies,
cooperatives etc.
• Board of directors
• Management
• Employees,
• Suppliers, contractors
• customers,
• funding agencies,
• regulators,
• the environment ,
• community
22 June 2011
by Dinesh Agrawal at DRDO, New Delhi
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Principles of Good Governance
• Integrity
• Accountability
• Transparency
• Ethical conduct and values
22 June 2011
by Dinesh Agrawal at DRDO, New Delhi
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Principles of Good Governance
• Integrity - Integrity comprises perceived
consistency of actions, values, methods, measures
and principles.
• Integrity is often seen as the quality of having a
sense of honesty and truthfulness with regard to
the intentions or motives for one's actions.
22 June 2011
by Dinesh Agrawal at DRDO, New Delhi
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Principles of Good Governance
• Accountability – is the state
of being answerable for
decisions and activities to
the organization's governing
bodies, legal authorities and,
more broadly, its
stakeholders.
• Accountability should focus both, on compliance,
with rules and ethical principles, and on achievement
of results.
22 June 2011
by Dinesh Agrawal at DRDO, New Delhi
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Principles of Good Governance
• Transparency - Transparency is a principle of
access to, or disclosure of, appropriate
information.
• It refers to the provision of making available
relevant information to the various stakeholders,
both internal and external to the organization, who
may be affected by, or have an interest in, its
decisions and actions.
22 June 2011
by Dinesh Agrawal at DRDO, New Delhi
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Principles of Good Governance
Ethical conduct and values - The organization’s
stakeholders expect the organization to conduct its
activities in an ethical manner.
22 June 2011
by Dinesh Agrawal at DRDO, New Delhi
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Ethical conduct and values
Ethical conduct and values Not only delineate the minimal standards below which a
persons actions will not be tolerated, but articulate a set
of values that a person should aspire to emulate.
What makes actions right and wrong?
Is it a Virtue or Duty or Rights?
Q: A man in a sinking boat with mother, wife and little
daughter can save only one person. Who will she be?
22 June 2011
by Dinesh Agrawal at DRDO, New Delhi
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Legal Compliance
•
The applicable laws, statutes, regulations
•
The personnel responsible for compliance.
•
Audits that compliance is evaluated and reported to top
management and the board.
•
Due awareness of the legal responsibilities and liabilities to
partners/business associates, suppliers/distributors in the
supply chain, etc. where ever applicable.
22 June 2011
by Dinesh Agrawal at DRDO, New Delhi
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Stakeholder Identification & Engagement
•
Identification of stakeholder
(both internal and external).
•
Identification of needs and
concerns of the stakeholders
•
Stakeholder Engagement Process
–
Setup appropriate channels/ forums/
structures for their engagement
22 June 2011
by Dinesh Agrawal at DRDO, New Delhi
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Stakeholder and their concern
Stakeholder
Classification
Their Concern
Customer
Quality of Product and services including
issues relating to health and safety
Employee
Quality of work environment and
recognition, career progression.
Investors/
Shareholders/
Financers
Return on Investment
Risk Minimization
Supply Chain
such as
suppliers and
distributors
Terms of doing business including financial
and credit limits;
Capacity building;
Fair and transparent process;
22 June 2011
Engagement
Process
by Dinesh Agrawal at DRDO, New Delhi
Information
Sharing
13
Stakeholder and their concern
Stakeholder
Classification
Their Concern
Environment
Protection and conservation in context of
organization’s activities
Government
Financial accounting and compliance to
laws; national image, security
Community
Sustainable development;
Protection against adverse impact;
Compliance to Social mandates
Civil Society
Sustainable development; Respect towards
social, cultural, traditions and practices;
business
associates
Terms of doing business including financial
and credit limits;
Fair and transparent selection process;
22 June 2011
Engagement
Process
by Dinesh Agrawal at DRDO, New Delhi
Information
Sharing
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Responsiveness to stakeholder
•The information given is:
–Relevant
–Complete
–Reliable
–Neutral.
–Understandable
–Accessible
–Equitable
–Timely Response
22 June 2011
by Dinesh Agrawal at DRDO, New Delhi
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Policy, Planning & Strategy
• Organization to define it’s vision, mission and
value statement.
“One day Alice came to a fork in the
road and saw a Cheshire cat in a tree.
Which road do I take? she asked.
Where do you want to go? was his
response. I don't know, Alice
answered. Then, said the cat, it
doesn't matter.”
22 June 2011
by Dinesh Agrawal at DRDO, New Delhi
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Governance structure
•
Define its vision, mission and value statements.
•
The governance structure is defined by a hierarchy
of levels which includes:
» a) Owners/Promoters
» b) Board, and
» c) Management (Strategic/Operational)
» With clarity of roles, responsibility, authority, accountability and
liability at each functional level.
» Effective flow of communication and decisions fully understood
by each functionaries
22 June 2011
by Dinesh Agrawal at DRDO, New Delhi
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Documentation
•
Documentation
–
–
–
–
–
–
Vision, mission and values statement
Code of Conduct for Board, employees, etc.
Roles, Responsibilities, authorities, accountability and
liability of the Board members, management etc.
Terms of reference of Board and other committees
Specific policies (e.g. HR, gender, environment, etc)
Grievance redressal mechanisms for all stakeholders
22 June 2011
by Dinesh Agrawal at DRDO, New Delhi
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Monitoring and Review
• Monitoring and review
– Through Internal & external audits and audit committees
– Committee for reviewing the good governance practices of
the organization to review
» Policy deployment
» Feedback system
– System of identification and reporting of all breaches
– System of checking legal and financial compliances.
– System of checking non-compliance in ethical conduct, etc.
22 June 2011
by Dinesh Agrawal at DRDO, New Delhi
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Reporting & Communication
Reporting
– Establishment of proper
reporting mechanisms.
– System for timely statutory
and regulatory reporting.
Communication
– Channels of communication
with the respective
functionaries for
communicating with the
respective stakeholders.
22 June 2011
by Dinesh Agrawal at DRDO, New Delhi
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Maturity model
•
•
•
•
The issue of governance is progressive and evolving.
It is a journey towards making right decisions considering
the interest of all stakeholders.
It goes much beyond legal compliance.
It even goes ahead of expectations of stakeholders.
Road map based on the concept of capability maturity
model considering 5 levels of maturity guides the journey to
good governance.
22 June 2011
by Dinesh Agrawal at DRDO, New Delhi
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Maturity model
•
Initial Level:
–
•
To some how comply to bare minimum legal requirements. Adhoc
approach with focus on managing the crises.
Basic Level
–
•
Some structure with management controls including planning,
monitoring and control system for ensuring compliance to all legal
requirements.
Defined Level
–
Well defined and written roles and responsibilities for all decision
makers.
22 June 2011
by Dinesh Agrawal at DRDO, New Delhi
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Maturity model
•
Managed Level
–
•
defined vision, mission and goals and have policies for
each stakeholder
Optimized level
–
–
Strive to take care of interest of all stakeholder way
beyond the statutory or legal requirement.
Look towards its long term sustainability.
22 June 2011
by Dinesh Agrawal at DRDO, New Delhi
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Good Governance – Risk Mgmt
22 June 2011
by Dinesh Agrawal at DRDO, New Delhi
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Good Governance – Achieving Goals
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by Dinesh Agrawal at DRDO, New Delhi
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Our Role
• With great power comes
great responsibility
• Not everyone is meant to
make a difference. But for
me, the choice to lead an
ordinary life is no longer an
option.
22 June 2011
by Dinesh Agrawal at DRDO, New Delhi
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Our Role
• I'm trying to free
your mind, Neo.
But I can only show
you the door.
You're the one that
has to walk through
it.
22 June 2011
by Dinesh Agrawal at DRDO, New Delhi
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Thank You