Corporate Governance is an integrated framework whereby people formally organise themselves for a defined purpose, and they apply critical processes consistently to achieve predicted performance for sustainable development.
It is well accepted world over that Corporate Governance is critical for making competitive enterprises, improving industrial performance, creating jobs and sustainable development. Corporate Governance has thus become the most debated topic in last two decades.
There are different perceptions and beliefs around the world about corporate governance and in all this corporate governance has become a rhetoric only.
Much debated principles of corporate governance like "independent directors", "audit committees", "control on related party transactions", "nomination committee" and "investor protection" cannot ensure corporate sustainability and hence corporate governance has remained far from reality.
Sudden fall of Lehman Brothers in USA and Satyam Computer Services & Kingfisher Airlines in India has proved that traditional principles do not hold good.
Now the economic boundaries are vanishing and human fingers have become mightier than the bullet, sword and pen. The competition is now not restricted to attracting customers, but it is more intense in attracting talent and financiers, without which companies can not stand at all.
The power of information is now on fingertips of PEOPLE who can now evaluate corporate PERFORMANCE on hundreds of parameters. In just few taps on smartphones people change their investment portfolio, their jobs and buy the best product available anywhere in the world.
It is also critical that companies must have well defined PROCESS to consistently achieve predicted results year after year.
Corporate strategies and management practices are taken as given, and business ethics has become a competitive success factor. Good people associate with the companies which have a well defined PURPOSE in the form of vision and stakeholder policies and sincere efforts are put to fulfil those commitments in long run.
In changing paradigm, 4Ps (People, Purpose, Process and Performance) have become critical for corporate sustainability.
Recognising the criticality of the theme, Life Development Foundation has redefined corporate governance and developed a comprehensive Corporate Governance System Standard based on 4Ps (People, Purpose, Process and Performance) after an extensive research on world greatest organisations, large Indian corporates, statutory bodies, public sector undertakings, trusts, societies, partnership firms, sole proprietorships and associations.
This standard is not restricted to publicly traded companies but can be easily implemented in all forms of organisations regardless of type, size and legal status.
An organisation can become competitive and improve its performance dramatically by implementing this standard.
When an organisation performs well everyone associated with the organisation grows. Investors get good dividends and capital appreciation, employees get salary hikes, lenders and suppliers get timely payment, customers get good products at lower prices, society gets improved quality of life and government gets increased taxes which in turn are invested into socio-economic development and security.
Hence, increased competitiveness and industrial performance has a cascading effect ensuring organisation sustainability.