Audit committees must insist on minimum standards on CG : CII summit

Mumbai, Sep 29 (UNI) Addressing the second Corporate Governance Summit organised by the Confederation of Indian Industry (CII) here today, Y H Malegam, Chairman, Emeritus, S B Billimoria&Co, said that audit committees need to be aggressive and insist on a minimum level of standards for internal audit. This, he said, was essential for their effective functioning.

Elaborating on 'Corporate Governance and Internal Audit,' Mr.

Malegam also highlighted key issues, such as whether internal audit should be done in-house or outsourced and whether committee members should report to the Chairman of the Audit Committee or the CEO, adding that there were strong arguments in favour of both options.

''Ultimately, one has to be pragmatic and see what is best for the organization,'' he advised.

Y M Deosthalee, Chief Financial Officer, Larsen&Toubro Limited, spoke on the need for an 'Effective Audit Committee,' stressing that it was very important for members to be up to date and detailed on new standards. Only then could they effectively comment on financial statements, he said. ''All audit committee members also need to have the experience to understand and interpret financial statements,'' Mr Deosthalee underlined, adding that having International experience was also a plus with companies increasingly going global and setting up joint ventures and manufacturing facilities abroad.

He also said that a mechanism needs to be developed to evaluate audit committees.

Raising the issue of whether audit committees are 'Adding Value Across the Board', Deepak Ghaisas, CEO, India Operations&CFO, i-flex Solutions Limited, said that for this to happen, audit committee communications with the Board needed to be open and candid. ''There should be no fear. Audit committees should ask questions and these must be candidly communicated to the Board,'' he said.

Bharat Doshi, Executive Director, Finance&Corporate Affairs, Mahindra&Mahindra Ltd, highlighted one of the key problems faced in implementing corporate governance, namely finding qualified, professional Independent Directors.

Speaking on 'Independent Directors: The Conscience of the Company,' S Mahalingam, Chief Financial Officer, Tata Consultancy Services, said that Independent Directors need to dig deeper as their role has become much more complex.

Shailesh Haribhakti, CEO, Haribhakti Group presented a perspective 'Independent Director_Industry Experience.' Rajendra P Chitale, Managing Partner, M P Chitale&Co highlighted the need for 'Building and Leveraging an Effective Board of Directors.' The plenary session on 'Is Governance Delivering Value For Your Organization?' was chaired by Adi Godrej, Chairman, The Godrej Group. Suresh C Senapaty, Executive Vice President, Finance, Wipro Ltd, made a presentation on 'Corporate Governance&Brand Value: Deriving Tangible Value from Intangible Asset' while Nimesh Kampani, Chairman, JM Morgan Stanley Private Ltd, underlined the scope for 'Corporate Governance: Improving Competitiveness&Access to Capital in Global Markets.' R Gopalakrishnan, Executive Director, Tata Sons Ltd, explained the Board's Role in 'Corporate Governance meets Business Strategy.' UNI KKD WD SKB1907