Corporate governance is to improve confidence

New Delhi, Mar 29 (UNI) The key focus of corporate governance codes is to promote an organisational culture that encourages ethical conduct and compliance with the law, Company Affairs Ministry Secretary Anurag Goel said.

Addressing an inaugural session of the National Seminar on Corporate Compliance Management organised by the Institute of Company Secretary (ICSI) here today, Mr Goel said those managing the compliance programme are required to exhibit a commitment to compliance with ethics and the law.

He said the most important aspect of compliance management is the creation of a compliance conscious environment at every level of the company and the education and training of employees to avoid engaging in any activities that might rise legal compliance concerns recognising the need to respond immediately if a potential compliance problem is detected, companies should encourage their employees to report questionable activities to their supervisors or the relevant departments.

Mr Goel said the basic purpose of installing an enterprise risk and compliance management programmr should be to improve confidence in operational and financial integrity, maintain accurate and timely flow of information that enhances visibility, measurement, management and sharing of risk, measure risks not only at the system level but as seen from the business process and business-unit level, as well as from the organisation's wide view of risk management.

He said it also aims to provide consistency in terminology, measurement, compliance and risk tolerance and quantify and justify risk decisions to support accurate response and decision making.

He said in the recent times, there has been a paradigm shift in the approach of economies towards the corporate governance, compliance and business ethics. It is a shift that continues to be driven by demanding performance expectations, increasing stakeholder demands and growing public scrutiny.

Mr Goel said the regulatory compliance landscape has experienced dramatic changes in recent years.

He said as regulations have grown in number, scope and complexity the penalties for non-compliance have expanded to include hefty fines, with corporate compliance continuing to be top on the minds, he added.

UNI