Indian Firms Have a Long Way to Go in Transparency, Governance

Indian companies have a long way to go in terms of improving transparency and governance although there has been a cultural shift towards it, believe officials at global risk and intelligence firm, Kroll and Duff & Phelps.

Insider trading

“Like any economy which is growing quickly, there is always work to be done. There are still ways to go for India,” said Carl Jenkins, Managing Director and Global Leader (Governance, Risk, Investigations and Disputes Practice), Duff & Phelps, adding that many countries, including the United Kingdom, are still working on issues like insider trading and conflicts in their corporate structures.

However, Tom Everett-Heath, Global Head of Business Intelligence and Investigations at Kroll, a division of Duff & Phelps, said that too much reliance on regulatory oversight for enforcement of transparency and ethical behaviour is often not very effective, and there has to be a cultural shift towards such practices.

“I think there has been great progress in India in improving transparency, and developments have been positive in recent times,” he said in an interaction with Business Line.

There comments come at a time when many Indian companies, including several banks and even NBFCs like IL&FS, have witnessed various crises relating to governance.

Jenkins noted that the regulatory oversight infrastructure in the US, such as the US Securities and Exchange Commission, initiated in the 1930s, provide protection to the common people who routinely invest in stocks.

“It was the result of ensuring that the small investor does not get hurt,” he said.

Earlier this year, Duff & Phelps acquired Kroll, and also strengthened its presence in South Asia by opening a new office in Mumbai.

This article was published on The Hindu Business Line on 19 October 2018.