Page 21 - Life Insurance Today July - December 2020

The primary purpose of corporate leadership is to create 6. Effective banking supervision arrangements, with
wealth legally & ethically. This translates to bringing in a particular emphasis on supervisory policies that
high-level satisfaction to five constituencies namely the encourage sound governance and risk management
customers, employee, investors, vendors and our society practices;
at large. It is needed to ensure the predictability, 7. Leadership by example, including the adoption of
sustainability, branding and profitability of revenues. robust governance, accountability and transparency
practices by central government, government
Among the professions, The Institute of Chartered agencies and regulatory bodies.
Accountants of India has emerged as a mature body
regulating the profession of public auditors, and counts Significant Parameters of Corporate
among its achievement the issue of a number of accounting
and auditing standards. It is good for the shareholders Governance:
because it is good for the company on which their future As per the laid down norms the important parameters of
depends. If the quality of corporate governance is good, Corporate Governance are:
decision making process should be transparent, consistent 1) Independent Directors enjoy professional freedom to
with the need to protect the competitive interests of the provide direction to the Company.
company as otherwise shareholders and other stakeholders
2) Level of disclosure in its annual report, management
in the enterprise would lose out.
report on responsibility statement - 217 (2AA) of
Companies Act.
The policies and structures for promoting robust corporate
governance in the life insurance Sector include: 3) Efficient discharge of the Audit committee as per the
1. Well designed and enforced company law, which Section - 292A of Companies Act.
specifies, among other matters, the duties and 4) Effective system of communication with the
obligations of directors, the rights of shareholders and customers, shareholders, employees, vendors,
other stakeholders, government, general public and society - quarterly

2. Disclosure and external audit requirements, results in website etc.
mechanisms for the enforcement of the law, and 5) Risk Management procedures to be adopted.
penalties for non-compliance with the law;
6) Financial disclosures to be properly maintained.
3. Codes of principles developed by professional or
industry associations, setting out desired attributes of Genesis of Corporate Governance:
corporate governance, and associated educational and
In third century, B.C. in the city of Pataliputra, Koutilya
consciousness-raising initiatives;
wrote his celebrated treatise on statecraft - Arthasastra.
4. High quality disclosure requirements for banks and History records Pataliputra, the capital of Mauryan Empire,
other companies, based on robust accounting and
as a city "astonishingly well organized and administered
auditing standards;
according to the best principles of governance."
5. Measures to strengthen market disciplines in the
banking sector, including privatizing government- Writing about the ideal conduct of the king, Koutilya says
owned banks (or at least subjecting them to effective an ideal king is one for whom, "In the happenings and
corporate governance arrangements), removing wellbeing of the subject is the well-being of the king, in the
government guarantees of banks' liabilities, ensuring welfare of the subject, lies the welfare of the king, what is
that deposit insurance and bank failure response desirable and beneficial to the subjects and not his personal
arrangements do not significantly weaken market desires and ambitions is desirable and beneficial to the
disciplines, and promoting a contestable and king." Koutilya further elaborates on the fourfold duty of a
competitive financial sector; king as:

"So many lovers (and singles) are starving for a DEEPER CONNECTION. I believe it is actually our sensuality that is
being starved, for it was intended to satisfy our soul's deepest hunger for love."

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